Bitcoin and Bombs> The War on Bitcoin

Bitcoin is not completely worthless. But those who believe the cryptocurrency is going to usher in some kind of new Utopian era for humanity are either a.) purposely lying or b.) completely stupid.

A new documentary called Magic Money: The Bitcoin Revolution calls the cryptocurrency the “biggest financial revolution the world has ever seen” and claims, “For the first time in history money is no longer controlled by banks or governments, but by the people who use it.”

Neither of these statements is true.

Throughout the 19th century, private companies would issue their own decentralized currencies called scrip. Mining and logging companies in remote areas of the United States sometimes paid their employees in scrip, which was used to purchase goods at a company store. You’ve probably heard the song “Sixteen Tons” by Tennessee Ernie Ford:

I was born one mornin' when the sun didn't shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said "well, a-bless my soul"

You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

Let me reiterate: I do not think Bitcoin is worthless!!

But Bitcoin is not going to win in a fight with the world's central banks. Fact is, Bitcoin has ideals. But governments have bombs.

Bombs > Ideals
Maintaining control over monetary policy is a major priority for every nation on the planet. Countries will go to war over monetary policies. Do you really think an agency like the Federal Reserve is going to give up its monopoly on money without a fight?

Truth is, there are several cognitive biases at play here that make people believe Bitcoin will perform better than it actually will.

First, there’s optimism bias. This is simply when a person believes they are at less risk of experiencing a negative event than others. A good example of this is smoking. Everyone knows smoking can lead to cancer. But many think, “It won’t happen to me.”

The most hardcore Bitcoin fans simply can’t bring themselves to consider all the risks associated with the cryptocurrency. The thinking is: “It’s different this time.”

Then there is what’s known as favorite-longshot bias. In both gambling and economics, favorite-longshot bias is a phenomenon where speculators tend to overvalue long shots and undervalue favorites.

This bias could also be known as the underdog bias. People want the underdog to win. And in this case, Bitcoin is certainly the underdog.

Bitcoin vs. the world’s central banks is a modern-day equivalent of David vs. Goliath. In the myth, David wins. And the story exists because we want David (the underdog) to win. But if this fight were to really take place, Goliath would win every time.

Bitcoin is not completely worthless. But it’s not going to win in a fight against the world’s central banks.

Of course, it's impossible to really know what people are thinking. More often than not, what they say does not truly reflect what they believe. There is no doubt a heavy element of pumping among Bitcoin fans.

You’d be wise to not get sucked up in all the hype.

---

Please follow and Upvote

source:
https://www.energyandcapital.com/articles/bitcoin-and-bombs-the-war-on-crypto