BITCOIN - A Fraud and Ponzi in a Disillusioned World - Daniel Mankani
First things first lets understand this "The World is Disillusioned with Social Media Imaginary Lives" Ongoing Economic and Monetary Systems Transformation and there is indeed a whole lot of confusion on how the world tomorrow will evolve.
There are many questions and many responses to this but one thing for sure, its Bitcoin is not money nor its a stored value of an asset, it will never replace currency nor its has any of the attributes of Gold or Currency.
In the midst of all this Bitcoin has emerged as the best performer across various asset classes to which its compared against and now been told it will replace the means of transacting across borders and its value to continue increasing in a case of be it all and end all.
Human Greed knows no bounds especially so if its a subject out of disillusioned minds. In the era of Fake News and Deregulated markets where accountability takes backstage coupled with a over educated under utilized millennium generation, Bitcoin is more of Fraud and a Ponzi and you may call it the revenge of the nerds.
Driven by fear of missing out and with various superior looking scientific yet false justification of "i know its better but I don't know how, this has fueled Bitcoin's Market Valuation and Price.
Its Greed and Fear Combined, Perception of disillusioned minds. A fraud of no other kind and a Ponzi at the same time.
In 2017 alone. Bitcoin meteoric rise has seen its total market value rise to over 100 billion dollars.
Bitcoins 100 Billion Dollar Valuation obtained in a shortest period of time. For any asset to remain as a stored value and become one as a currency, it needs to have three key attributes without which its just another Fraud and a Ponzi at the same time.
It needs to have an UNDERLYING to give its stored value, It needs to have a UTILITY without which there is no demand to hold and lastly it needs to have LIQUIDITY which is non volatile.
Attributes which Bitcoin doesn't have.
Underlying Resource: An underlying resource of some kind is necessary to give any derivative its value against which the derivative is bench marked, US Treasuries and even Fiat Currency for example have an underlying asset class to back them up, Government revenues and Taxes are the underlying for every currency where economic growth and monetary management defines the currency value.
Gold is the perfect hedge in an stagflation environment in which we are currently in and Bitcoin is not gold, It has no underlying of its own to compare with to gold or to a currency and such perception is very much flawed.
It is wrong to say that Bitcoins Energy Consumption gives its underlying. It does not. Just cause someone found out a water front property and build on it an exclusive luxurious home, spending huge sums of money to make it beautiful and comparing its construction costs as input of value and then comparing it to the prices in demand and further speculating that if just a tiny bit of demand comes from there, the prices will escalate to those levels in a fancy of disillusioned minds.
You can't compare an sparsely populated island in the pacific to that of one which has demand and it's no matter on how much money you spend in making it luxurious, its a waste of effort and time.
As the difficulty increases in mining of coins in order to make it a finite resource, more energy is consumed as efficiency drops and it then becomes scarce, this is the mathematical equation behind bitcoins miners and developers illusion, assuming that the input costs are part of the underlying, when its not.
Bitcoin Energy Consumption to determine underlying replacement costs.
Bitcoin uses more electricity than Uraguay, Kyrgyzstan, and Paraguay, yet what is the productivity use or value created out of this?
Gold is a finite resource with utility which makes it of asset of stored value of no other kind.
While it only takes 1.4 barrels of oil equivalent to produce an ounce of gold, it takes 10.1 barrels of oil equivalent to produce one Bitcoin.
Therefore as per the Maths.
Bitcoin-Production-Cost-Bevand-as per May-31-2017. Which today is closer to 1800 per coin generated and rising. Hence, anyone investing in Bitcoins needs to understand the total dynamics behind them and understand which asset if behaving more like a bubble.
Now if we are in agreement on input costs and the underlying just been a waste of valuable energy resources to output a single coin, lets look for the second most important attribute of that of Its value creating UTILITY and you will find there is none except for illegal money laundering, and stashing of hidden wealth from which Bitcoin has benefited enormously from the chaos and collapses of various economies across the world.
In fact Bitcoin founding and origination is mired in Mystery with rumors of the founder himself owning a million coins and we have various reports from a couple of years ago where sites which accepted Bitcoins in its infancy were gifted FREE of COST hundreds and thousands of coins to get its acceptance going..
First things first, If you are investing in either Bitcoin or Gold, it's important to understand which asset is behaving more like a bubble than the other and Bitcoin is clearly a bubble and a Ponzi which needs fake news and FOMO promotions to thrive on.
Bitcoin will starve the banks fake news
Santa Claus is coming early this year.
More Fake News. Do you know Bitcoin is worth a Million and Why.
Its unregulated and largely biased by the few who profit the most out of the high price. Caveat Emptor if you are invested.
Bitcoin needs a constant barrage of fake news and steady stream of new incomers into the scheme to justify high prices, if this is not a ponzi that what is? Its highly fraudulent by the misrepresentations occurring coupled with "Front Running" activities of brokers and exchanges in tandem with such activities.
Bitcoin Fork. If Bitcoin is decentralized, then how come some minor parties, not majority, decided to create a fork and outputted a new coin? Isn't decentralization on the basis that no single parties or minor group of parties members can control or direct outcome without the consent of the many.
In Conclusion, Fools and their money part always fast.
Wealthy borrowers use home loans to bet on bitcoin - stock market
Federal Reserve Bank of Dallas
Globalization and Monetary Policy Institute | Working Paper No. 292
Does Bitcoin Reveal New Information About Exchange
Rates and Financial Integration?* | G. C. Pieters | Trinity University | December 2016
Does Governance Have a Role in Pricing? | Cross-Country Evidence From Bitcoin Markets
Robert Viglione | Department of Finance | Darla Moore School of Business | University of South Carolina | September 2015
Marc Bevand: Electricity consumption of Bitcoin: a market-based and technical analysis)
Jimmy, a friend of mine compelled me to write this article, Jimmy Loves Bitcoin yet Jimmy needs to understand what's front running and in unregulated markets is often leads to fraud and scam.Listen to the audio file below to understand the meaning of front running, it happens a lot in bitcoin where the order fills are not in accordance to price. exchanges and brokers are part of this scam, while people without any background and understanding are been suckered in.
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