The value of a currency depends upon the value of the armie(s) backing it up. This is what 6,000 years of civilization says.
The crypto currencies were a grotesque sight, denying the value of worth, the teaching of history, the laws of common sense. But there was something cryptic about crypto: why was crypto legal and authorized?
Basically, a currency is a set of tokens given by some state authority which determines and certifies its value. Creating one’s own currency is an attack against the state. Multi-national and multi-state currencies have long existed: but they were backed up by armies working in concert. For example the Thaler, which lasted many centuries for many German states. The Roman Solidus, used for nearly a millennium, was backed up by Roman and then Frankish armies. The validation given by the state and its army enables the use of Fiat Currency: for example the Roman state used coins with nominal value far superior to their real value. China, which had not enough precious metals, had a much bigger gap. With such a gap, an economy can be run on the cheap. The growth of crypto currencies was authorized by the world monetary system, knowing full well criminals were its main beneficiaries. In light of history, this is astounding: in the Frankish empire which ruled Europe for more than a millennium (France and the “Holy” Roman empire were successors), the standard penalty for making fake currency was death by boiling. Alive. Special cages to this effect were well known, there was nothing cryptic about it. However, some will chuckle that the rise of crypto is not surprising, and was a secret in plain sight: kleptocrats let fellow bandits strike coinage!
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Some of cryptic crypto propaganda was reminiscent of the outrageous lies of some politicians who wanted to “stop the steal” (Trump) or liberate those they want to enslave (Putin). For example it was said ad nauseam that crypto eluded government control. However, as every single transaction is recorded in the block chain, it is the exact opposite which is true. Crypto ransom payments were easily tracked down. Traditional finance uses ledgers, and human intermediaries, and those potentially enable to elude tracking. Block chains were presented as the future, but they devour energy. And energy waste is a huge problem at this point (CO2 crisis). Crypto currencies, which pay no interest, were also supposed to increase in value… while being used by ever more people, and being produced in ever larger quantities… All this astounding naivety of the crypto investor is not cryptic: we live in an age of superficial thinking, shallow knowledge, nonsensical fads and celebrity obsession. Crypto became famous like Kim Kardashian: for being famous, and looking good. However Ms Kardashian is real. Crypto is not.
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Conclusion: Bitcoin valuations are crashing. Some claim that China’s crackdown on cryptocurrency is behind the collapse. But this is nothing new. Instead, fundamental questions of legitimacy are re-considered by the markets. Cryptic Cryptos pay no interest, whereas some US gov bonds have a near 10% interest. The real mystery is why something that cryptic was able, through giving money to politicians, to get a place in the public space which should have been illegal.
Patrice Ayme
Patrice Ayme's Thoughts 