You've all probably heard the stories on Bitcoin's value. Stories that portray Bitcoin not only as valuable, but precious. Stories by which buying bitcoins is one of the smartest things you can do. Well, all of that is just cheap propaganda. A bait to lure you to buy something worthless.
Bitcoins cannot be eaten or drunk. They cannot be seen like artwork or heard like music. They cannot be used to operate computers and execute specific tasks like computer software. They cannot be driven like a car or worn like jewelry. In short, bitcoins have no intrinsic value. When you buy them, you only get a short record, e.g. '5.1234 BTC'.
If someone issued a record and offered it to the public, they must redeem it. The record has to have redemption value. Casino chips, fiat currencies, shares, or gift cards are examples of such records. When you hold them, all you can see are numbers and letters written on some digital, plastic or paper media. There is nothing intrinsically valuable to consume or utilize. That's why their issuers must redeem them for something.
Casinos redeem their chips for cash. Banks redeem their currencies for debt servicing and liens release. Namely, the units of fiat currencies are issued as debt owed to banks - individuals and companies owe it to commercial banks based on loans, while governments owe it to central banks based on bonds. That's why the banks redeem deposits and banknotes for reducing or closing that debt and releasing liens on the property that secures it. Corporations, if they decide to end their business operations, redeem their shares for funds from liquidated assets. Finally, retailers redeem their gift cards for goods or services.
On the other hand, Satoshi Nakamoto, as the issuer of bitcoins, does not redeem them. He issues them through the protocol he wrote, but never redeems from anyone. If you invested electricity to make his system work and got bitcoins for it, Nakamoto won't redeem them even for a dime. Everyone who holds bitcoins knows this. They know that bitcoins have neither redemption nor intrinsic value. They know that bitcoins are worthless. That is why they are forced to get rid of them. Sell them to someone else. And to do this successfully, they need to publicly promote Bitcoin as valuable. They need to compare it to gold, diamonds or artwork. They must say it is the superior version of fiat currencies or money in general. That it can save us from greedy banks. That it is revolutionary like the Internet. That it is scarce. That it solves corruption or financial and economic problems. That it can lift poor countries out of poverty. They need to sugarcoat Bitcoin.
All these stories are of course ridiculous. They would be such even if bitcoins were units of equity, like shares or units of debt, like fiat currencies. But bitcoins are the units of the number 21 million. Nakamoto came up with it in his imagination and assignes its units to online addresses with the protocol he wrote. The whole thing is essentially an online game that uses numbers to simulate bank deposits and stores them in a decentralized database.
Numbers, whether they are stored centrally or decentrally, don't have magical powers. They cannot solve corruption, play the role of artwork or precious metals, lift countries out of poverty, save us from banks, or be scarce. They cannot be money if they are non-redeemable because there's nothing to compare with the value of goods and services. Those who make up or repeat such stories know very well they are ridiculous. But they do it out of necessity. They bought something worthless and want to get rid of it at as high a price as possible. They want as many participants as possible to enter the scheme, so that wide demand secures them good selling prices. That is what the stories on Bitcoin's value are all about.
Submitted December 18, 2023 at 01:50AM by Eaxecx https://ift.tt/V2okgLx
