Bitcoin: The Illusion of Money 2022

Bitcoin: The Illusion of Money 2022

Bitcoin is more accepted than ever, but that doesn’t mean it has stopped being a scam.

Bitcoin: The Illusion of Money
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Bitcoin is victorious in its popularity. More and more companies around the world including AT&T, Microsoft, Visa, PayPal are accepting bitcoin payments and even small businesses are starting to use cryptocurrency. According to a study conducted by HSB, a third of small and medium-sized businesses in the United States accept cryptocurrency as payment. For cryptocurrency investors, this is clearly great news. For me, this is another proof that they do not sow stupidity, they are born themselves.

I’m sorry, but I have to say this: Bitcoin is just a scam – it was one from the start, and always will be. Bitcoin is a decentralized digital currency that can be bought, sold and exchanged directly through blockchain-powered ledgers, rather than relying on an intermediary like a fiat bank. Proof of encryption is used instead of trusting the government. As with fiat money, at the end of the day, the value of the cryptocurrency is in the eyes of its owners.

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So what’s wrong with that? As Robert McCauley, a senior researcher at Boston University’s Center for Global Development Policy recently explained, comparing bitcoin to a Ponzi scheme is very impressive for a Ponzi scheme.

True, unlike Ponzi or Bernie Madoff, “Bitcoin is not bought as a profitable asset, but because it is believed to be self-perpetuating, and it is.” In other words, no one is promising you the return in exchange for owning bitcoin, and their value comes from selling bitcoin to others. But what happens on the day when no one buys bitcoins at any price?

Well, there is no minimum value. Bitcoin can become worthless overnight.

As McCauley explains, the final Bitcoin game will not be like Madoff, but instead will look like a “pump and drop scheme” rather than a Ponzi scheme. In a pump-and-dump system, traders acquire essentially worthless shares, talk about them, and possibly trade them with each other at high prices before dumping them on those who indulged in gossip and price action. Like a pump and dump scheme, Bitcoin uses an intense thirst for capital gains. Buyers can’t stand seeing friends get richer overnight: they suffer from an intense fear of missing out (FOMO).”

Does this sound familiar? Probably yes if you are investing in cryptocurrency. The value of Bitcoin depends entirely on the hype around it and the hopes of the people. Without this circumstance, it is of no value.

The cryptocurrency has been hit by several crashes, most recently in November when it plunged to less than half its value. When I write this it rebounds again, but how long will it take? Will it reach an all-time high of $68,991? Who do you know?

What I do know is that, as with any financial fraud, if you show up first and leave early, you will make money. In the case of Bitcoin, if you invested in 2017 or earlier, congratulations, if you exit or exit soon, you will be making “real” money. after 2017? Not much.

It was never meant to be. Satoshi Nakamoto, the mysterious inventor of bitcoin, described it as a vehicle for everyday transactions and a way to bypass traditional banking infrastructure after the 2007-08 financial crash.

This is not how it turned out. Today, while you can pay with bitcoin to buy, its real use involves a high risk, high reward investment gamble.

If that’s all, I wouldn’t mind. People are betting on the Super Bowl, horses and poker, so why not bet on crypto?

I don’t like bitcoin because it allows cybercrime. Without bitcoin and other cryptocurrencies, there would be fewer ransomware. They made it possible to hide huge ransoms in public books with ridiculous names. It is enough to mix payments around bitcoin wallets, and there is almost no chance of catching scammers.

Additionally, a lot of malware today is bitcoin mining software. Cryptojacking has become a hot new malware today.

So I think there is another way to make money with bitcoin: become a criminal.

Bitcoin is as energy hungry as anything else on Earth. Bitcoin mining consumes approximately 91 TWh of electricity annually. That’s more than Argentina, a country of 45 million, uses in a year. Bitcoin’s energy consumption is increasing every day.

This is partly because the fantasy of successfully mining Bitcoin at home has not been true for years. To successfully mine Bitcoin Proof of Work (PoW), high-powered graphics processors (GPUs) are not enough. You need application-specific integrated circuit computers (ASICs). These are expensive configurations with hundreds to tens of thousands of dedicated computers running 24 hours a day, 7 days a week. It is very clear that a recent study found that 0.1% of Bitcoin miners control half of the entire mining capacity. Remember what I said earlier about the only people who really make money – are they the first in the business?

At the same time, mining rigs have raised GPU prices, which has caused problems in the market such as shortages of Playstation stores and other game consoles missing thanks to all the high-powered CPUs that cryptocurrency miners are buying.

Finally, as my friend David Gewirtz points out, you may lose your last shirt with your bitcoins. In the long run, I expect virtually everyone who plays cryptocurrency (except for the aforementioned traders to break into this game from the start) virtually everyone who plays cryptocurrency.

I know this is not a popular opinion, but seriously folks, take a deep breath if you are already into cryptocurrency and think about what I said. It may save you a lot of real money.

Source: Computerworld.com

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