Bitcoin is now worth what it always was – that being as much as people were willing to believe it was worth. They now believe it is essentially worthless, which it became the moment people ceased to believe it was worth something.
In spite of all that “mining.”
This latter will probably go down in history as one of the greatest scams ever. It pulled the wool over more people than the Harum Skarum over a “virus” with an infection fatality rate for most people that wasn’t even a whole number.
It worked a lot like the way a “virus” that didn’t kill almost everyone was made to appear as if it would by nonstop sound-the-alarms about “the cases! the cases!” – which was a successful attempt to conflate people testing “positive” on tests designed to give a “positive” result to bananas with people getting sick – and sick enough to require medical intervention. These were very few – but “the cases! the cases!” were very high.
It terrified people because most people are not medical people and did not appreciate that “the cases! the cases!” were largely not medical cases; i.e., people under a doctor’s care.
Similarly, this “mining” business.
People hear that word and tend to think of digging valuable materials out of the ground. Things like coal – and gold and silver. Stuff that is worth something, objectively. Because all of those things are useful and tangible things, in and of themselves. They are also – as regards precious metals – limited things. There is only so much gold (and silver) and it’s not much. This fact serves to both increase the value of precious metals and stabilize their value as more (and so, a diminishment in their value) cannot simply be conjured out of thin air. 
It is not for nothing that the people – to this day, no one knows precisely who they are – behind Bitcoin used precisely that word to gull people into believing something of value – something real – was being “mined.”
Some said – some still say – that numbers are being “mined” and that this creates value . . . somehow. No one has been able to explain how, exactly. And that should have been the clue that Bitcoin was – is – shady. A confidence game. It works so long as enough people continue to have confidence in it. Those who got in early can get rich – and many did. Those who were smart got out early – before the masses who got in late got suspicious and lost confidence. 
We should all be suspicious of currency the value of which is solely dependent upon faith. This includes the currency we’re all obliged to use as money – i.e., the “notes” issued by the “federal” Reserve, the cartel of private banks that has controlled the nation’s currency since real money was effectively outlawed by the government controlled by the private banking cartels. (For more about this, The Creature From Jekyll Island remains the definitive text; if it were required reading in schools, this country might awaken from its fiat-currency stupor and demand real money be the only coin of the realm.)
Money has value in and of itself, a function of the precious metal it is based upon – or which it literally is, in the case of silver and gold coins. Paper can be money, too – provided it is merely a bank note representing gold and silver and can be exchanged at will for the face value thereof. Such paper money has its own uses and conveniences, being easier to carry than gold and silver coins. But the important thing is that it is money – so long as it is money rather than just paper. 
Worse, of course, is not even paper – which is what Bitcoin was. And what it presaged. It is almost certainly not a coincidence that Bitcoin (and what is styled “crypto” generally) appeared at just the same moment in time that the banking cartels are pushing to get rid of paper money in favor of . . . digital money. Just like “crypto” money.
So easy to use, they say! And so easy to control and track, they don’t say.
Don’t fall for it. As disreputable as paper “notes” untied to anything of real value may be, digitized currency is far worse. The only thing that will be “mined” is our liberty – via absolute and total control over the currency. Not just its value but also its use.
Don’t fall for it. If we do everything falls.
. . .
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The only real difference between crypto & fiat is the number of faithful (advantage dollar)
Neither meets the definition of money, so how can one be good & one be bad?
There is no govt printing press for crypto (advantage bitcoin).
The only reason the dollar is somewhat stable is it is still the reserve currency. If not, we may be wishing for bitcoin instead of Venezuelan Bolivars – which is coming at some point, esp if BRICS does come out with a gold backed currency.
Diversify
Actually Dan, there’s one major difference I can see. When banks decide to go to “negatve interest” people take their paper out of banks and put it safes at home. It’s happened many times in many places. If they decide to do that with digital money there will be no recourse. They just take as much as they want, and there won’t be a damned thing anyone can do about it.
ALL Crapto/crypto is a PONZI scheme.
Just electronic one’s and zeros, no inherent value or usefulness.
Gold or precious metals are money.
Everything else, fiat currency, crypto, paper holdings are substitutes.
Seems there’s always some vaporware trying to reel in the suckers as the next big thing. I do worry about the so-called CBDC “digital currency” that will track every aspect of your finances. On the other hand govco is so incompetent the IRS is still working on tax returns from 2020. Sounds like it’s going to be a hacker’s paradise.
Everyone loves to talk about the finite nature of bitcoin. There will only ever be so many then that’s it. OK but in reality everyone and their brother made their own variant of bitcoin. This not only led to a lot of confusion, it watered down the original concept.
Worse, it allowed for the creation of exchanges. But these systems weren’t set up like the NYSE, they were promoting themselves as alternative banks. And like all banks they realized that depositors didn’t withdraw their funds after transactions, so they started loaning them out on margin. And now it looks like there were several Ponzi schemes, the most recent involving large donations to the Democratic Party.
Now that the price of the miners has collapsed, a few people who have access to cheap electricity have started to use them as supplemental heaters. If the current price of natural gas continues, I might join them since I still have a lot of solar production credit from over the summer. Heat the house for free and maybe make a few coins.
Sounds like some no coiner remorse going on here. As with anything, timing and cost basis is everything. Crypto is just another speculation, Ive won some and lost some in crypto. At this point Im hoping for an epic blow off top. If I lose, it wont be painful as it (Crypto) is a tiny fraction of what I risk in their casino.
People who have nothing to spare should stay away from casinos. The only true solid investment at this point, IMO are learned skills, IRL physical relationships, and income producing assets. All the rest is based on the greater fool theory. Realestate, stocks, bonds, even PMs, and yes Crypto are purely speculative now. With the demographic A-bomb that is about to explode, (thanks death jab) Everything at this point looks deflationary to me.
I’ve been buying PMs most of my adult life as a hedge against whatever, The manipulation used against gold and silver the past thirty years is staggering. Stocks as well which I hold in IRAs. I researched and based my choices on all the fundamentals and metrics I could find. They should be performing well, but hello PPT and Wall street Casino Royale. I think Buffet said it best, to paraphrase, ‘The market can remain irrationally exhuberant longer than the average person can remain solvent.’
So heres to solvency in 2023, and hoping everyone here has put aside what they need for the coming storm. No one is coming to save you, the dollar is dust, and we better prepare for a more sustainable future while its easy. The world may be about to get a lesson in what the meaning of paper in fire is. Just waiting for the spark, hoping to stay warm huddling near the embers.
Norman,
“Crypto is just another speculation”
Speculation, as in gambling. Lady luck be with you.
Hi John,
Lady Luck and I have always been on good terms. I think the key is having all the essential bases covered. After that there’s not a lot of downside to speculating with a small amount to chase returns.
In the late 70’s when inflation was going thru the roof, there was Ponzi schemes running rampant. These scammers (which turned into everyone including my friend’s mother) would run the scheme by the new bottom entries paid half the fee to the second levels and half to the one person on top level. Then you had to recruit newbees to move up the pyramid. No one ever made top level except the person[s] running the scam who never paid in. These were so prevalent that even at my high school these were being run. Until people lost then they realized they got duped.
Inflation is like the virus, caused panic and people reacted out of fear of losing value of their money, so “get rich quick” was the vaccine. Unfortunately regarding the vaccine vs the bitcoin, you may lose some of your personal human effort stored as dollars with crypto however with the vaccine you will pay with your health and life.
Hi Hans,
I remember those schemes, it was called “the golden circle” and they were everywhere around here. I was really disappointed in a couple of friends who should have known better tried to get me involved and then shunned me when I refused. Another winnowing of “friends” like the ones that went away over the covid nonsense; their loss and no burden for me.
Hi Mike,
Yep, same with me in that I had a very close friend pushing me really really hard “you gotta get in now” which turned out bad for him (I think he lost a couple hundred at least). Fortunately, these scams were somewhat low dollar down to the high school level which were as low as $50 at the time in lieu of the $500 or $1000 which the adults were playing. You’d think $50 would be the best tuition a young person could pay to learn one of life’s lessons very early.
What was that movie in the 60’s: The Flim Flam Man with George C Scott: Master of backstabbing, corkscrewing and double dealing.
Hans,
“the high school level which were as low as $50 at the time”
Education is never free, and seldom cheap.
After you have accumulated 100,000,000 Satoshi, you will have one Bitcoin.
16000/100,000,000=0.00016 dollars for one Satoshi.
You could sell one million Satoshi for 160 dollars. Price Bitcoin at the 1,000,000 Satoshi level at 160 USD, Satoshi-MM will increase in value just from gullibility, factors in anyhow.
You will be stuck in e-mud going nowhere. The grid goes through the wringer, all gone. And… it’s gone. You will have nothing.
Read this over at Climate Depot:
“If electoral democracy is inadequate to the task of addressing climate change, and the task is the most urgent one humanity faces, then other kinds of politics are urgently needed. The most radical alternative of all would be to consider moving beyond democracy altogether. The authoritarian Chinese system has some advantages when it comes to addressing climate change: One-party rule means freedom from electoral cycles and less need for public consultation. Technocratic solutions that put power in the hands of unelected experts could take key decisions out of the hands of voters.” – David Runicman, Professor of Politics at Cambridge University
The professor is a nut, another feckless human hater.
You will not be able to vote, you will be told what you can do and that’ll be it. In other words, you don’t count, you will be on a need to know basis only.
Individual rights will be abandoned, you’ll be a serf.
Screw your rights. Shut up, Ahnold. Shut up Ahnold.
What’s startling to me is how so few insiders — who were economically educated & in the know regarding cryptos — have come out publicly and spoken the hard truth regarding crypto currencies. For me it’s mind boggling and once again indicates how utterly corrupt society has become.
It’s as if the subject was so complicated and so impossibly difficult to study, analyze, or assess that no one could possibly figure it out. The standard response was, “And doggone it you plebeians could never understand it anyway so quit asking, just trust me, and go get some and you’ll do just fine.” Of course this line of expert reasoning was pure b_llsh_t. Yet there were so many of these so-called experts that filled the airways to convince everyone they needed bitcoin. Gee, do you suppose they might have a vested interest in it?
The idea behind Bitcoin was sound, but like practically everything else in the modern marketplace it has become yet another something-for-nothing scheme. Crypto currencies have devolved from a simple attempt to fulfill a market desire to another Ponzi scam. Those who got in first enjoyed the profits and naturally the latecomers got sheared.
Simply stated the value of a Bitcoin isn’t the bitcoin itself – how anyone could think it is is just nuts — it’s the system of supposed easy & cheap money transfer that has value. And that’s it! To think at one time the system had a total value over a trillions dollars to be able to just transfer money? So now tell me, what’s wrong with that picture?
Dave,
There are some things about it that I find intriguing.
Fixed amount of bitcoins, making the scheme some sort of digital analogue to gold. Cool idea.
Encrypted peer-to-peer transactions ledgers (this is essentially what blockchain is) intended to guarantee that only the 2 people involved in the transfer, get to make the transfer. This is supposed to make bitcoin-to-bitcoin transfers impossible to tax. Also, a cool idea. This also makes it difficult / impossible to counterfeit, because each bitcoin (or piece thereof) has a unique history that is tracked, so it’s effectively impossible to counterfeit. Also (kind of) cool.
Here are the fatal problems:
No real privacy
Depends on too many external factors: The power grid (which is less stable every day), access to devices, knowing how to use the devices, remembering passwords. Lose any single piece, you lose access to your bitcoins and are completely locked out of the ecosystem.
You know what else works well as gold? Gold. Much simpler, much easier to use, much more robust. You can dig a hole somewhere, and bury it, then come back later & it’ll still be there (unless someone else found it & dug it up for you). It exists independently of you & everyone else. It’s eminently recyclable. It has value as money because people use it that way, but it also has value for a lot of other things you can do with it / use it for. It’s also private, and anonymous. It can be tracked or not tracked, as you see fit–either you write up a receipt, or you don’t. It’s hard to counterfeit, and counterfeiting is usually pretty detectable using simple tests. And when everyone gets tired of it and moves on (which has yet to happen), the piles of yellow metal will still be there waiting for the fad to kick back up again.
From September 15, 2014, to November 9, 2020, the price of one Bitcoin was LOWER than the current price ($16,815), except for a very brief period in December 2017
The price was under $1,000 from September 15, 2014 until December 2016
SOURCE OF DATA:
https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD&.tsrc=fin-srch
I only tend to invest in tangible items and not made up “coins”. BTW Eric, it seems your investment in laying hens has really paid off with eggs going at $5 or more a dozen at the grocery store!
Would you like to buy my 25% share of the Brooklyn Bridge?
That’s very tangible and no one could steal it.
Here’s a humorous post up at Armstrong Economics….
https://www.armstrongeconomics.com/humor/the-next-bitcoin/
Great points about Bitcoin – or any crypto currency.
I understand that the number of bitcoins is limited by the number of solutions to a very complex mathematical equation. So I get that the total number of bitcoins is limited by the number of solutions to this equation.
We are told this is why Bitcoin is “better” than Fiat currency – because it is limited. It can’t be printed infinitely like Federal Reserve notes can.
Great – so the number of Bitcoins that can ever be generated is limited to “X” bitcoins.
The flipside to that “benefit” is that there is a theoretically infinite number of competing cryptocurrencies that can be dreamed up.
The big question that I’ve never gotten a straight answer to is: What give one cryptocurrency value over any other? Or per Eric’s point: What gives one any intrinsic value at all?
I understand that blockchain technology has some very real upsides. And “anonymity” is definitely NOT one of them – despite cryptos being marketed that way at the beginning.
What I don’t get is how solutions to an equation nobody cared about 15 years ago is now considered “Money.”
At the height of COVID hysteria, people were told that paper money was contaminated with the
‘Rona and therefore DANGEROUS. We were also told that there was a shortage of coins and therefore we had to use plastic (debit/ credit cards) for everyday purchases.
Early on in this mass hysteria over the ‘Rona, NONE of what we were told about it or the various responses to it made any sense until I started watching or reading alternative media outlets and discovered that a group of self-proclaimed “World improvers” were trying to shove something down the masses’ throats which they called “The Great Reset”. I have to wonder if “The official narratives” about paper money and coin shortages in 2020 were just a ruse to get people clamoring for digital currency, which is something else they’ve been pushing.
‘There is only so much gold (and silver) and it’s not much.’ — eric
This is equally true of Bitcoin, limited by its distributed algorithm to 21 million.
Neither gold nor Bitcoin can be valued objectively, since neither offer a yield that can be compared to prevailing interest rates. Yet both offer utility as a store of value and a means of exchange.
One must distinguish between Bitcoin itself and dishonest custodians like Sam Bankster-Fried. Gold can be stolen by dishonest custodians too.
Cryptocurrencies will survive and thrive, though for now crpytos probably are headed lower along with stocks, to which they are correlated. Cryptos aren’t my cup of tea — I’m strictly a long/short GICS sector, yield curve, and gold/copper trader — but they serve a purpose.
Hi Jim,
How can anything be limited by an algorithm when it is possible to just change the algorithm?
Eric,
Good question. The Bitcoin blockchain is distributed among thousands of users. A fraudulent attempt by one user to modify it would be immediately detected by everyone else, and rejected.
To hijack Bitcoin, you would need to conspire with more than 50% of its blockchain subscribers. This kind of ’51 percent’ takeover has been discussed in the literature. But it hasn’t happened yet, to my knowledge.
Meanwhile, gold has busted out from a six-month downtrend against copper, as the new year begins. Me like! 🙂
https://ibb.co/VYfJ9k1
I’ve worked with the underlying cryptography technologies used by these “digital currencies” for decades. They go way the hell back — people think it’s some new technology or something. Go lookup RSA, DES, MD5, RC4, or even any of the newer elliptical curve technologies (e.g., ECDSA, ECDCH, etc). You’ll see that some of the underlying technology is now so old that it’s been “deprecated” and no longer used (e.g., DES, 3DES, MD5, RC4, etc).
All of this “mining” business and the related stories are all jargon-rich, slight-of-hand, exaggerations that are intended to import confidence and the never-too-old to play card of “you’re too simple to understand this” trip. Just trust the experts, silly simpletons.
It’s much the same with AI. Granted it has come a long way since I studied the “blocks world” discussed in early Stanford Press books on the subject. However, real/actual AI has very hard limitations which there is nothing beyond similar slight-of-hand currently in play.
For AI, they’ve largely taken very basic pattern matching — which is by no means “AI” — and, along with a rabbit in a hat, tell people that it is essentially machines with consciousness. It’s not. It’s not even close. It’s mostly high-speed pattern matching which is granted very sophisticated but HAL 9000 it absolutely is not. And is not going to be any time soon.
People don’t want to listen about it. Surely an old fart like me just doesn’t understand. There must be “magic” in those bitcoins and those robots. The experts wouldn’t lie.
I never understood the imaginary “value” of Bitcoin. Even with fiat currency, there has to be some tangible asset that it relates to, however perversely. I never saw that tangible asset in Bitcoin, or any of the lesser cryptos. Unless it was unicorn farts and fairy pixie dust. Apparently, exactly like fiat currency, it is wholly dependent upon public confidence to function. A thing that can disappear tomorrow. Or in cryptos case, today. Fiat currency, still to come.