Hard Fork in Bitcoin Tomorrow, August 1st, 2017…
Get up to speed on this whole crypto thing to see through the fog of facts, myths, and downright propaganda…
Guest post by Half Dollar
The title, section headings, etc, are metaphors and not to be taken literally. Bitcoin Fanboys cannot successfully recover from the following arguments so be careful when they go lose it: There may be some kicking and screaming on their part.
So by now we have seen that everybody including most precious metals analysts have had a little too much of the Bitcoin Kool-aide. Now understand I’m about to give you some valid counterbalance, call it Bitcoin constructive criticism, but whatever you call it, don’t call it Haterade. I like Bitcoin as much as the next guy, and the next guy likes it a whole lot of “meh”. Keep an open mind while you read this, because many big names have come out swinging either for or against Bitcoin, so if anybody is confused about Bitcoin or just doesn’t understand it, after reading this article you too will be able to pierce through the noise and shred any Bitcoin Fanboy to pieces,
It seems as though the Bitcoin Fanboys have spoken so loudly, and argued so full of logic, that there could be no flaw in the mighty blockchain. Right? I mean, one Bitcoin costs more than an ounce of gold, whatever that means, and the trading volume in Bitcoin is now louder than the volume on the GLD. I get it. For a while I traded Beanie Babies on the NY Sock Puppet Exchange, so I get it when something goes hot. I also get that Bitcoin Fanboys are the most defensive and it’s-not-me-it’s-you because you just don’t get it people around . Like, do you even QR Code your Bitcoin wallet bro?
(Pictured Above: 3-Time World Hot Dog Eating Contest Champion Satoshi Nakamoto shows his excitement when learning that he can now order and pay for his hot dogs with Apple Pay. According to Nakamoto, “A bit of hot dog got stuck in my tooth, which I chipped while scraping off the bit with a coin, but now, I won’t have to worry about an infected turned blue-tooth, the bits, or coins anymore!”. As of the time of this writing, it is unclear if Mr. Nakamoto was able to pick up Apple as a sponsor.)
Bitcoin has some very serious flaws which may want to be considered, so before you go sellin’ your stack and buying at the top of a parabolic move, how bout comin’ down to earth for a little training, Rocky IV style. It’s not going to be pretty, and it’s not going to be fun, but the paper tiger can go down if you know where to attack. Presented in no particular order:
1: Headshot to the “Bitcoin is Money”
If you don’t feel like putting up any fight, sometimes Bitcoin Fanboys can be taken out like zombies. By now we are all keen to what money is, and what money is not. Gold and silver are money. Bitcoin is not money. Bitcoin lacks some of the qualities needed to be money. At best, Bitcoin is a nice currency, perhaps even better than all the others. Why is Bitcoin not money? Because money must have certain properties, and one of them is that it be a stable store of value over long periods of time. Sure, this looks like a nice trade if you got in on the left side of the chart, but if you didn’t, does this look like a store of value worthy of being called money:
That doesn’t look like stability to me. How can daily fluctuations in excess of $300 be considered stable? Imagine a farmer selling bushels of corn. He sold some bushels one day for $1,800, had to buy his seed for the next harvest at $2,100, and at the next harvest the farmer could only sell his bushels of corn next season for $1,300, how does the farmer make up for that huge loss? On volume?
Gold, on the other hand, has 5000 years behind it. Silver even longer. People all over the world recognize that gold and silver are money, and they are willing to buy and sell their good and services for precious metals wherever, whenever.
Furthermore, Article 1, Section 10 of the United States Constitution specifically states “gold and silver Coin a Tender”. Now, get ready for the typical Bitcoin Fanboy counter-attack of “But there was no internet when the Constitution was written!”. Uh, OK. That seems legit on the surface, but in all reality, the point is moot. Just because a currency is in the form of a paper bill, like a freshly printed Benjamin, a personalized check from a big Wall Street bank, or perhaps even a debit card whizzing out there in cyberspace, or now even the mighty block-chain itself, that does not mean those forms of currency cannot be backed by real physical gold or silver. Yes technology advances, but the more things change, the more they stay the same. Something someone also said about if it’s not broke it doesn’t have enough features? Bitcoin sure does have features.
2: 1000 Cuts
Bitcoin Fanboys are always falling back on their whole “Bitcoin is decentralized” argument. Well, technically speaking, no duh. Currency in someone’s pocket is always literally decentralized? In all actuality, Bitcoin is heavily centralized. In fact, the centralization of Bitcoin is one of the supporting pillars in the Cult of Bitcoin, even though they call it the exact opposite of what it is, or in this case, what it is not. Just like Orwell wrote in the oft-quoted novel, 1984, we all understood what is meant by the Party slogans of “War is Peace”, “Freedom is Slavery”, and “Ignorance is Strength”. Too bad there was no block-chain when he was writing his dystopian novel, or perhaps he would have put “Bitcoin is Decentralized” as the Party’s fourth slogan. People who say that Bitcoin is ideal because it is decentralized do not understand that it is the exact opposite that is of decentralized.
We can start with a few fundamental ways that Bitcoin is more heavily centralized than we are often asked to believe. First and foremost Many people just turn on their phones and expect them to be connected. You see, from the decentralization argument, ask yourself how many places accept, exchange, trade, and transact for their businesses in and with Bitcoin? Oh yeah, a handful. Yes Bitcoin is the hottest thing out there since stuffed-crust pizza, but in the grand scheme of financial and market things, it is a Windows Phone getting crushed by the competition. There are not 8,000,000,000 people all using Bitcoin, and each individually verifying the ledger, rather, there are like 10,000,000 people trading Bitcoin in a few places like Coinbase or Bitfinex. The latter of which was hacked in 2016, and forced members to take a 30% haircut to on their crypto to “share” and cover the losses. Decentralized currency? OK. Centralized losses? Oh yeah.
Further decentralized claims that just don’t pass the sniff test have to do with ease of use, convenience, and inability to be tracked. Well, we all should know, especially our community, that anything can be tracked with enough time, resources, and attention, so we won’t go there. Luckily, most people are not at the top of the list for scrutiny yet, though technology could quickly solve the “privacy” benefits the Bitcoin Fanboys cheer so often about, and it would be a safe bet that governments of the world are actively trying eliminate any privacy and actively trying to scale up tracking to real-time tracking, on-demand data queries and other extractive digital forensic techniques that the average person is not privy to.
So let’s finish the decentralized theme of 1000 cuts with a word on ease of use and convenience. Ever been in a Wal-mart with a full cart, the ice-cream melting and the computer payment system is down? You see, Bitcoin requires electricity (fail), and no, random people and strangers are not meeting up Craigslist style exchanging physical virtual-bitcoin addresses printed on little pieces of paper in back alleys or in the back Starbucks. The “My Bitcoin is offline” is all hype and no substance. Good luck with your offline USB wallet falling out of your pocket and into a lake or the ocean, cause circuit boards don’t like water, and good luck with the “offline” wallet that accidentally gets washed in the back pocket of a pair of jeans that also had some Kleenex. Offline works about as well as a pen with no ink trying to write on a wet 3×5” index card.
In addition to the 1000 cuts already mentioned, Bitcoin requires connection to internet (fail), connection to the exchange server, (fail), access to ledger (fail), and since it takes two to tango, the person on the sending or receiving end also must have electricity, a medium of storing the Bitcoin, properly configured wallet, connected to the internet, connected to the specific servers or exchanges to conduct the transaction, and also have access to the ledger. If it indeed takes two to tango, points of failure are therefore multiplied by two, and soon it is clear that Bitcoin has very, very serious flaws with the decentralization theme and how that relates to the issues discussed in this paragraph.
Bitcoin can be taken down sniper style, Assassin’s Creed style, and even with the nuclear option (Internet Kill Switch). Bitcoin is big and slow and requires tons of CPU processing power, fast, beefy ram, and commercial grade graphics cards, not like the one some Youtuber runs on his Minecraft rig, but rather, think Hollywood Visual Digital Effects caliber graphics cards. These are very, very high-end rigs, so high-end that it is really only companies with serious money or investors who can afford them, and then afford the electricity to run them 24/7, not just to mine the Bitcoins (no way a $299 3-year old back-to-school bundle laptop with a printer and USB flash drive could do anything bitcoin intensive. It would be like hand-painting bar codes on the products for an entire grocery store. That just won’t happen. It is also resource intensive to compile and maintain the ledger. This is not even like bringing a knife to a gunfight. It is more like being blindfolded, hands tied behind the back, and throwing water balloons in a gunfight. Some of the assumptions needed for Bitcoin Fanboys to state their case are downright hyperbole, which is fitting, seeing as how the move has been parabolic.
If you think that Deprivation sounds a lot like “Shred a Bitcoin Fanboy Lite, that could be a very costly mistake. Bitcoin Fanboys pride themselves on being able to conduct whatever it is they conduct, anytime, day or night. They talk about reliability, and indeed, reliability is a real legitimate network term. In fact, the more reliable the network (or server, or website) the more expensive. Bitcoin Fanboys would have you believe their crypto is crankin’ out five-9 up-time. That would be impressive. That would be the ability to be connected to all those servers 99.999% of the time.
The problem is they are just plain wrong and too stubborn to acknowledge it at best, or cognitively dissonant at second best. First there was this email:
About the only thing I’ve seen with five-9 anything is this 2017 .99999 Gold Canadian Elk. I’m sure there are more, but this is about currency, not money, so back to the topic.
If it was not bad enough to freeze Bitcoin activity for four hours, well, things have since then taken a turn for the worse. I grabbed this screenshot from an email from Coinbase, and now, All Bitcoin activity will be frozen for the entirety of August 1st:
Well, technically speaking, the freeze goes into effect on the July 31, 2017, just before midnight, but this is about up-time, and one minute isn’t going to make or break when we have as many minutes of downtime scheduled as we do. I mean, does it really matter or not if the freezing of bitcoin activity is for 1440 or 1441 minutes? The bottom line is that the up-time everybody likes to pitch just took a serious hit. Anybody with a Coinbase account wanting to engage in Bitcoin activity Monday night before midnight and all day Tuesday, well, no amount of coats and scarves are gonna take the chill out of this freeze. More than just winter is coming. An ice age cometh.
5.1: Identity Crisis Part I: The Capital “B”
(Moving on to a less than all-out assault)
Proper nouns use capital letters. Those are names of people, names of countries, or names of brands. Dollars? Don’t be fooled. There are US dollars, Australian dollars, and Zimbabwean dollars, so, “dollar” is spelled with a lowercase “d” . There are also Argentine pesos, Cuban pesos, and Mexican pesos, But what is Bitcoin? There is no such thing as US Bitcoin, Australian Bitcoin or Zimbabwean Bitcoin, It’s just Bitcoin. Bitcoin is a product, kind of like Pokemon, and I mean no disrespect to Pokemon, because Pokemon are all defined with names, specific qualities, and other distinct features that properly distinguish one Pokemon from another. But what is exactly one Bitcoin? Sure, we know that Bitcoin is an answer to a math problem, but that’s like saying “b” is a letter in the alphabet. Sooner or later we know that. At best, Bitcoin could be defined as an operating system, like Ubuntu Linux, Mac OS X, Android 6.0, and Leap Frog. Yes, the computers for babies. There is an operating system there. There are literally 1000’s of computer operating systems, just like there can be thousands upon thousands of cryptocurrencies, and they all share one common feature: Sooner rather than later operating systems become obsolete. I mean, I haven’t seen anybody walking around using a Motorola Razr lately, but I could be wrong. As far as my own experience has shown me, products are not money unless you are in prison or at war, suffice to say I was in the latter. Products are not money. Products are are fads.
5.2: Identity Crisis Part II: Bitcoin Is a Cross-dresser
If Bitcoin were money, why do they need to make it look like something eerily similar to, well, just see for yourself:
Oops, I’m sorry. That was the wrong coin. That was the precursor and inspiration for the coins in Subway Surfers.
What I meant to share is this:
But according to all the Bitcoin Fanboys, Bitcoin is money all on its own. Oh really? Then why are they trying so hard to make bitcoin look like gold?
And to all the Subway Surfer out there with mad Surfcoin, sure, the power-ups are cool and all for my kids, but your Surfcoin usage options are extremely and severely limited. Just try cashing them out for real money.
6: Another Quick Tactical Strike to “Durability”
You hear it all the time. “It doesn’t matter if the Internet goes out because I printed out my Bitcoins on a QR Code, and I can even trade them offline just in case the Internet kill switch is flicked. Earlier I discussed a scenario where a Bitcoin wallet address might get accidentally washed in the back pocket of a pair of jeans. Good luck decrypting Tide Ultra and an extra rinse cycle. But wait, there’s more. Ever keep a store receipt for an item with a 1-year guarantee, Look for an old one if you have it, because there is a good chance that even before the year is up, the ink on the paper cannot be seen. How can you prove a blank piece of paper is really your bitcoin address with with .00000137 Bitcoin if the ink on the paper had faded so badly that it just looked like paper with nothing printed on it?
There are so many ways Bitcoin is not durable that they have really been mentioned throughout this article. Remember, a couple of the qualities for something to be money is durability, and Bitcoin does not make the grade in the durability department.
7: Understand the Bitcoin Fanboy’s Active Distraction Techniques
We are all told the Bitcoin is the block-chain. No. Bitcoin is not the block-chain, but rather, Bitcoin just uses a network-based data verification protocol generically referred to as “the block-chain” by people who actually understand network data protocols. Remember when the World Wide Web was considered the Internet, only to find out that it was just one protocol using the Internet? To say that Bitcoin is the blockchain is to say that Ford is the car. Ford is a car that serves the purpose of transportation, among many different types of cars and means of transportation, and as such, Bitcoin is a digital fiat (by fellow Bitcoin Fanboys) currency that uses the block-chain to transact, and it is only one of the many different ways to transact.
Lots of things can use the block-chain, and those things don’t even have to be tech related, although Bitcoin Fanboys are heavy on the marketing hype, but short on real-world block chain usage. Think about how many times a group of college students go out to eat, or out to the club, and they split the bill. When the bill arrives, each person verifies what they owe, they pay their part, and (hopefully) give a tip (the cost beyond the food, drinks and entertainment consumed). That’s the block-chain folks. It is me, you, and our three other friends splitting a tab up five ways, and making sure everything zeros out. It is as simple as that. So the next time you find yourself under a hypnotic “Bitcoin is the blockchain” trance, you know immediately how to snap out of it.
8: Government Sanctioned Capital Punishment!
This is a bitter pill for our community to swallow. The United States Government confiscated The People’s gold in 1933. Just a reminder:
Smart people decided the Executive Order was illegal, unethical, or immoral, and those people didn’t comply. A coat of black paint over those gold coins that got glued as decorative “buttons” to a suitcase often times passed by even the most prying of eyes. So did a nice spot in the backyard for burying a jar of gold coins. The uglier the discreet storage the better. Not saying to dunk your gold in cans of black paint, just that the people did what they needed to do in the face of an arguably unconstitutional government executive order.
Silver was taken out of our coins by the end of 1964. They even got copper too. They left nothing to spare and nothing to chance. Anybody who thinks Bitcoin is beyond the control of government is smoking something that usually requires a prescription. When determined enough, when irate enough, and when underfunded enough, governments find their way to change the rules. There could be a time when they move to take out Bitcoin, or try to tax it so heavily they effectively shut it down. Call me a pessimist on historical indicators for future actions sure, but things that the government and the elite, deep state, and all those other groups don’t like, always eventually become a target. It is only a matter of time. With a slow creeping police state and the ability to already freeze real bank “accounts” on a whim, while selective targeting is the course of action today, look for round-ups of people and equipment next, then broad-based targeting of Bitcoin exchanges, wallets, and networks.
Perhaps for now the small Cryptosphere serves the government for some other purpose we do not know about. That is up to the reader to decide what the government is thinking or doing. I will say this one final thought, and that is Bitcoin Fanboys, you have now met your match:
Any misrepresentations, errors, or omissions in any of the data in this article on the part of the writer/editor is happenstance, and you should consult an attorney, a dietitian and a financial adviser before engaging in the consumption of hot dogs, cryptocurrency, or any other activity discussed in this article. This article is just one person’s opinion, and is not indicative of opinions of any other person or any other company. Writer/editor is neither an attorney, a dietitian, or financial adviser, and the writer/editor may or may not be active in cryptocurrency and/or food sports.