Scam me, baby!

From the pages of the Nakamoto Institute, we can find some of the most accurate forecasts about the world wide adoption of Bitcoin, but these predictions are based on a not entirely true assumption. People do not tend to make rational decisions. The root of this phenomenon is well represented in the mathematical theory of games and how its predictions are disrupted by the action of non-rational players, who often choose to cooperate on a basis of politics or other false morals. The homo œconomicus does not seem to actually exist and so it happens that throughout history we’ve always witnessed a tug of war between leaders and the populace, just as we witness a tug of war between parents and children, ideas and reality… or the psychological cycles of idealization and discontent.

Rational and educated people are guilty of this in their expectations, as happened with John Nash who was well aware of computerized cryptography, currencies and governments in the fifties when he was expelled from RAND suffering with paranoid schizophrenia. As has happened to many tough bitcoiners now, the world fell in on him too soon and too fast; and now he has taken to speaking about the remote possibility that something like the euro could become “ideal asymptotic money” thanks to the intervention – finally – of “benevolent” authorities, as if such a thing could exist. Bitcoin is precisely that ideal money of asymptotic issuing thanks to the fact that it works without authorities! This man has always known what Bitcoin is, but obviously – and unless he is Satoshi – cannot understandably acknowledge the full invalidity of families and governments due to mental health, and tries to adapt his knowledge of nature to a society that ignores and will continue to ignore nature, not least in the implementation of monetary policy.

Thus, in articles such as ‘Speculative Attack’ or ‘Hyperbitcoinization‘ we are told that Bitcoin will destroy national currencies in a natural way thanks to its superiority as a currency and a store of value. But for that, it needs to reach a certain market capitalization and liquidity. Meanwhile the dollar, the de facto global reserve currency, continues on its course knocking down national currencies – as it has been doing for some time now – gaining confidence thanks to its political alliances and its positioning as a top scammer. Right now the rouble plummets due to the dollar’s association with Saudi oil … At any time, the whims of those who hold political power can provide a stamina to their currency the magnitude of which Bitcoin can only dream of. And so Bitcoin will not compete with poor national currencies that are already subordinate and will stagnate, but with a currency – or a global monetary phenomenon – with its same ambitions, which has a great advantage and that is, sadly, linked with tangible commodities such as oil. So I do not see that the Nakamoto Institute analyses consider something as important as this; in a similar way as their vision of crypto-anarchy spanning the world is reduced to an economy consisting of “words and images”. You can not encrypt gasoline.

A country’s choices do not necessarily boil down to this:

“Traders would buy bitcoins in the U.S. and sell them in India to net a $100 gain. They would then sell their Indian Rupees for dollars. This would weaken the Indian Rupee, causing import inflation and losses for foreign investors. The Indian central bank would have to either increase interest rates to break the cycle, impose capital controls, or spend their foreign currency reserves trying to prop up the Rupee’s exchange rate. Only raising interest rates would be a sustainable solution, though it would throw the country into a recession.”

Pierre Rochard (‘Speculative Attack’)


A country can also give up their currency or establish a parity with the dollar, which would neutralize the effect described by Pierre.

This is not to say that the fate of the dollar will not be the same as that of any other fiduciary and abusive currency (to disappear) by pure market natural law; but the conquest will not be as easy or as quick as the wise economists describe. People are not as wise as to choose bitcoin; people are idiots and they like to be scammed, and even when they’ll be forced to buy bitcoins they’ll believe they are being scammed.

I recently heard from someone retired from the military that rather than invest their pensions in Bitcoin, they invest them in altcoins; and not blindly either, but after a doing their maths. This other studious group, like the economic warriors of the US Treasury, don’t see any more than an opportunity to defraud the future gullible, flagging their business as if it were something noble when they know very well that it’s nothing other than more shit from daddy state. But what is it that people love and adore? Flags, precisely.


Scam me baby, one more time!

For each person who wants bitcoins because they believe in its objective future value, there is a herd of people who prefer fiat because they believe in the same old scams. Since when have the people in your environment been characterized by making good economic decisions? They’re characterized by prioritizing the lies of morality: their integration with the herd or their differentiation thereof. People are used to being told what to value, which is something that begins from early infancy when they’re systematically forced to eat when they don’t want to, so that they confuse what they should – or should not – with what they want. And thus, what they aspire to in adulthood is that other higher beings, whom they don’t trust either, continue to spoon feed them – as this is the state of affairs they’re used to and manage best – while also aiming to become “higher beings” for others around them.



“I must confess, I still believe …”

You can not derive an “ought” from an “is”. Where there are people convinced of Bitcoin’s fabulous and imminent triumph and urge you to buy, save and work with a sense of moral duty against the state, there are also people who insist, with even greater force, to further the scam sustained with the efforts of the first and the capital they create.

It’s not a very encouraging outlook for the virtuous, but virtue is for those who deserve it and it’s not meant to be gifted around for blind ideals – if you want to keep it of course – or to provide for scoundrels. It’s not exactly true that saving and working, as Pierre Rochard recommends in this article, is a revolutionary act – if by “revolution” we understand something that really goes against your enemy. It’s not difficult to see, as he himself admits that the objective of central banking is precisely to erode humanity’s capital accumulation. Producing in order to feed parasites is not going to bring us freedom anytime soon, and neither do good prospects come from all those libertarians who think otherwise.

Certainly the positive feedback from buying bitcoins is superior to that of any other currency given its better qualities. But why would the average citizen wish to buy bitcoins to such an extent that the cryptocurrency reaches the coveted turning point in its growth?

Since when do people in a position of more or less political power inexorably betray their fellows in order to seize objectively good assets? Since when did people absolutely prefer what is rationally good to what is morally good?


“Hit me baby, one more time!”


Historical examples

Consider the Civil War case in the US and the so-called “King Cotton“. What this illustrates is that cotton was a precious commodity in 1860, and so were the slaves, therefore the South had real value and was relying on it. On the North side however, the Union was financed by printing United States Notes, i.e., fiat money of poor quality and backed by pure morals and militarism. Europe, and in particular England, were so dependent on the supply from the slave states of the South, that the Confederation believed that they would intervene on their side; but instead they abstained and found political ways to mitigate the damage caused by the lack of supplies. In short, little did economic prospects matter compared to politics and alliances.

Indeed the dollar, a better currency than many American currencies, for example, infiltrates and coexists with relative stability – as does and will do Bitcoin. Some countries like Ecuador have assimilated it, and others like Argentina maintain it clandestinely. And there is no conclusive evidence that this is an unstable cycle, since the globalised market adapts well with its increased productivity and flexibility.

card_moneyIn the New colonies of France, the necessity to pay the soldiers originated card money, which survived for nearly a century even with the simultaneous circulation of better quality coins and silver, despite France’s financial problems. It survived both as a method payment and as a store of value.

The thesis that “good money drives out bad money “(Thiers’ law) was consummated in smaller economic areas prior to globalization, the Internet and digital money; and it also benefits fiat money when it is comparatively “good” – such as in the phenomenon of dollarization. This isn’t a conclusive argument, much less for the short term. In a globalized world what will prevail, is the same relative balance between this law and its opposite (Gresham’s law) according to which bad money continues to flow due to the ubiquity of a certain monetary policy, whether it’s in dollars or any other thing. This is a point to consider when it comes to estimating the longevity of state money in the economy while Bitcoin makes its way, and which also helps one feel better when the price does not seem to raise its head.