USD and Bitcoin Are Not Alike

There are many significant differences between USD and Bitcoin (used in this context as a placeholder for all cryptocurrencies) which need to be understood. Some of them may seem trivial, menial, nominal, or otherwise unnecessary to distinguish. However, as billions of dollars are now being stolen and lost from within this “industry,” it stands to reason that people have simply forgotten some of the basics.

USD and Bitcoin are both fiat currencies in some respect, but there are very big differences between them that should not be overlooked anymore. When you create a Bitcoin, there is a process of essentially cracking a computer problem which then reveals a serial number that is encrypted. That encrypted number is associated with a user eventually, who can trade or or redeem it for genuine currency. A genuine currency meaning something that is generally accepted in a nation state.

A Fight Between USD and Bitcoin Isn’t Fair

Yes, a nation state. That is the most important difference between USD and Bitcoin. The United States military backs the dollar. Nobody backs cryptocurrencies. In fact, one of the selling points of the “technology” of things like Bitcoin, as it were, is that they are “decentralized.” In other words no central bank controls it – they say. However, when you find out that exchanges and other funds control the cryptocurrencies, you see that they can easily be manipulated. Or stolen.

Central banks has the sole right to produce a money supply, yes. However, that is not a monopoly because they still distribute that money to banks and an entire financial system. That financial system is in need of serious repair, that’s also true. But that doesn’t mean that the underlying currency we trade in had to be “disrupted” as they say. If disrupting the USD were a good idea, it should not be done by what currently is passing itself off as the new way of doing things. Because Bitcoin aims at a true monopoly.

Bitcoin Is Empty & Meaningless

The currency is fabricated via computers, controlled by those who control exchanges and the vast majority of the currency. Then that currency is distributed across many computers – in some of these systems. In order to transact that purely fiat currency, you must go back to the same decentralized place where you got it from. As you now see, it is incredibly easy to hack, manipulate, or defraud in these schemes. If all the money invested into cryptocurrencies were spent on lawsuits suing fraudsters in our actual financial system, we could have corrected the stock market by now.

Typical money is based inherently on the barter system. Minerals of Earth like copper, nickel, and gold are pounded into solid objects. Those things can be used to make items of antiquity, and later in the industrial revolution we realized that mined minerals can be used in the production of technologies. It is of course very difficult to carry $1,000 worth of gold around for any case you might need to trade it, and therefore paper money was created. That paper was redeemable for gold before we eliminated that standard in the 70’s; thanks Nixon…but now we have digitized most of our money.

That is why people think that USD and Bitcoin are so similar, because at this point most USD is digitalized in some fashion. If you were to audit the amount of digital USD against the physical paper money we have across the world, you would definitely find a discrepancy. However, that differential could be corrected – if the world’s most massive audit were to be conducted. That is very unlikely to occur but the point is that it is more theoretically possible to audit paper USD against digital USD than it is to audit digital Bitcoin to…you get the picture.

If the USD were to become obsolete for some reason, we will still have all that paper. Again, this is a silly point, but you could use that paper to make paper mache sculptures. Stock brokers can roll them up and use dollars to snort their drugs. You could play the game Monopoly with actual dollars. But no matter what, the metals that we used to create the underlying value, would still have their value. They could get melted down to make ornaments, bullets, buttons, or other functional things. Bitcoin is worth nothing.

Inflated Server Usage Data Props This Up

What’s even worse for these pathetic cryptocurrency businesses is that they may not even be operating on their own servers. That means when the companies get liquidated, or bankrupted like FTX right now, it means the buyers may be getting nothing but a website domain. If, at the end of the day, a cryptocurrency exchange were to go bankrupt, with all the money gone, it’d be nothing.

That means they would have simply stolen money from people with no interest in paying it back. A sort of economic Jim Jones experiment. If we are going to talk about economics in terms of war from time to time it stands to reason that we should think of a cult business in the same way. In that sense, we shouldn’t necessarily think of Sam Bankman-Fried like Warren Buffett (wait till his other shoe drops) or JP Morgan. We should think of Sam Bankman-Fried like David Koresh, Charles Mason, or the like. A self-absorbed, self-centered, narcissistic, greedy, lying, asshole. Nothing more. Nothing less.

Therein lies another major difference between USD and Bitcoin. We may put Presidents on the money but you do not need to believe in them for the money to have value. The confidence schemes at the center of cryptocurrencies all rely on a cult belief of the founder. In fact, Bitcoin especially is all credited to some phantom on the internet who never revealed themselves. This lore is excellent fodder for nihilistic people who think it’s somehow inherently noble. It’s just an open source Ponzi scheme.

Capitalism vs. Communism – An Economic Breakdown

The difference between USD and Bitcoin, is the fact that USD provides the foundation for a capitalist economy. Bitcoin creates the foundation for a communist economy. If you believe in a truly communist society, Bitcoin and their type of currency is right for you. It won’t work, you will get robbed eventually, and there is nobody to appeal to if things go sideways. The dream will end in suicide, murder, or absolute destitution. On the other side, the capitalist side, the odds are still definitely stacked against you.

There is equal opportunity to rob, steal, cheat, and lie in a capitalist system. But if you get caught, there are a lot more people and systems in place to take you to task. USD and Bitcoin are often compared in terms of security. There were so many lies about Bitcoin that it is “impossible to steal.” But of course that’s not true. In fact, the “decentralized” system makes it easier to steal because you can access capital from so many different places. On the other hand, a bank’s vault requires breaking into.

If we resorted back to cash, it can still absolutely be stolen out of vaults, but that takes a much different kind of daring. You can do a Bitcoin scam from your couch. Cryptocurrencies are “mined” in dirt holes with computers in them. Making financial crime harder is definitely some kind of deterrent.

Obliterating Narratives

The current narrative on Bitcoin type currencies is that Sam Bankman-Fried made mistakes, but that the entire industry is still worth saving. There are a lot of apologists and explainers trying to save themselves the embarrassment of saying that they are just simply wrong. Instead of regrouping and assessing how people got taken so hard, they are acting like this event with FTX has nothing to do with them. That’s another difference between USD and Bitcoin. The USD is not inherently tied to any one venture.

A company that trades in dollars could make oil, televisions, humidifiers, furniture, food, or they could even provide services like legal, accounting, etc. Bitcoin’s production and distribution is inherently tied only to the production and distribution of its own currency. The idea that you could trade it is not relevant. Trade isn’t part of the equation. People refer to this as the “greater fool theory.”

Also, the denomination of USD and Bitcoin are completely different. USD has set denominations. Bitcoin is a single denomination that is valued, and then split into divisible increments. That makes them nearly impossible to budget, allocate, or bank on. The dollar index can shoot up exponentially, and will if our country hits a certain kind of inflation. However, I don’t think you’re likely to see a dollar become worth $22,000 one day, and $18,000 another day, and then be on the verge of not existing the next. Even if dollars are in constant danger, one of the reasons you won’t see this is because of the US military.

Think on your own personal level. If somebody came to rob you of your valued property or currency, it might become incumbent on your to defend that with a firearm. Your own little militia to protect what’s yours. Extrapolate that out to the responsibility for defending the existence of a currency. Regardless of how corrupt our entire political ecosystem is, and will continue to be, all of those soulless creatures from the deep would go to war to defend your dollars. So you can use them to buy food, no matter what. Do you trust Sam Bankman-Fried to go kill for you? No. Of course not. You trust him to steal from you.

Trust Has Been Broken Across The Board, For Generations

I’m not saying that the differences between the USD and Bitcoin are going to inspire you to trust the American government more than Crypto.com. But I am saying that there are big differences between so-called cryptocurrencies and the USD which make the USD forever a better investment. Cryptocurrencies themselves are casino games. They should be put in their place, within state lotteries or other games of chance – with games of chance disclaimers. But neither USD nor Bitcoin will ever be universal currency.

There will never be 1 global currency, for many reasons.

Think Local, Act Local

In fact, if anything, the opposite should be our goal. Rather than universal currency for all people across the board around the world, we should be more interested in localizing currencies at the city level. The cost of living in New York City and San Francisco are more comparable than the cost of living in Static, TN or Jackson, MS. Therefore $1 or 1 BTC or whatever denomination you can think of, should not be thought of as having the same buying power everywhere. That’s something the Sam Bankman-Fried’s of the world don’t know or care about. They are ignorant to these things or assume they won’t matter in some utopian future. But there will always be differences between cost of living around the world.

Some people live more simply, and their culture dictates it. They will not, and should not be forced to adopt anything – capital system or otherwise – to force their way of living to change. Think about subway tokens as a way to localize currency. You pay USD for the ability to ride public transportation. Cities can set their rates for that depending on cost of living, how efficient their system is, and how much demand exists. Could cost 5 cents to take a trolly in a rural suburb, or $5 for a ride in an urban city, or vice versa.

It would probably be a bad idea if every state in America had their own currency, but this kind of negotiation makes more sense than a bunch of individuals making up their own currency with nothing to back it and then thrust that on the market. The main point here is getting back to utility, and recognizing the differences between USD and Bitcoin showcase the reason why cryptocurrencies will always be useless nonsense. In fact, it is basically an open-handed Ponzi scheme. Just say no.