The r0ach report 37: Eldritch horrors await those who put their faith in imaginary, paper assets

in bitcoin •  2 years ago  (edited)

Someone named "TheRealSat0shi" posted on the bitcoin forum in a discussion I was having about metals with:

"Metals have stood the test of time as a store of value for thousands of years, I don't see them disappearing , though no longer useful as currency."

He sounds like a true bitcoin shill, so with absolutely no evidence whatsoever, we will give him the benefit of the doubt that he is in fact the real Satoshi. There is only one problem, bitcoin is nothing more than a glorified paper asset in the end.

For example, if someone were to purchase a Canadian dollar, you're entering an informal contract and receiving an IOU or credit of that nation. Whether your imaginary coupon is honored or not is entirely up to the performance of that counterparty entity. With bitcoin, you're entering the exact same informal contract, except instead of signing up in an informal contract against a counterparty entity, you have signed up for a contract with...no valid counterparty at all!

These words are not to be confused with counterparty risk vs no counterparty risk. You STILL have huge counterparty risk and have done absolutely nothing to remove it, you have only deleted the counterparty of the informal legal agreement. Many aspects of monetary functions are not really economics and are just law, and in this case, you have entered an objectively worse informal legal contract.

What exactly is the draw supposed to be in entering an informal contract with 'nobody'? Supposedly the aggregate of all 'users' were supposed to be your counterparty; in other words, instead of a legal contract, a faith based religion. Even if you buy into religion, this religion only works if bitcoin wasn't designed to centralize and had a functioning Nash equilbrium, but it fails in both cases. You are then not entering into a religion, but back to an obfuscated, informal legal agreement with two or three centralized, rent seeking miners who continuously issue the currency - a powerless, stateless oligarchy instead of a real state.

These emperor with no clothes miners are actually doing the exact same function as the state: trying to take a cut out of every transaction like the normal monetary mafia that controls it. The state doesn't like fly by night pump and dumps trying to take over it's extortion function, and regulatory arbitrage is impossible when bitcoin is designed to centralize, so the state then either crushes bitcoin or co-opts it and turns it into their cashless society slavery system.

On a long enough timeline, for you to not lose all your money, you actually have to pray the state co-opts it! When all is said and done, physical commodity money like silver or gold is the only thing that is not an IOU or credit, removes counter party risk, and actually functions as a hedge against the state. Which is why:

What eldritch horrors await those who put their faith in imaginary, paper assets.

Image source: mashable.com

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