Californian Democrat Congressman: Bitcoin Needs a Carbon Tax

my take on crypto shifted a lot since I first begun to understand money and learned my simplistic view was inaccurate. I learned that in the 1890’s property in Australia had skyrocketed to being ‘worth’ million of pounds (pre-decimal, actual pound values).. until it crashed.
When the banking system crashed and wiped out families, businesses and even government, laws were passed to prevent it happening again – the essence of it was that banks were printing ‘money’ far in excess of the wealth they actually held. They justified it same as they do now “if we lend a million dollars to someone to buy a house then we hold a million in assets , ergo (circular logic) the wealth is preserved by a million dollar house”. The Currency act was passed here to prevent banks ‘inventing money’ and printing paper money. No one could print money any more except the government. Everything got better then in the 1930’s the banks did it again, extending credit far beyond the banks wealth capacity. Crash..
The law was changed again to prevent this pump and run scam. In the 1980’s Paul Keating’s labor government deregulated the banks and now armed with fictional electronic cash, they once again flooded Australia’s economy with fake money – but they haven’t broken any laws.. they didn’t print a thing!
there’s 32 billion in actual printed cash according to treasury, yet there’s 2 trillion in ‘money’ in circulation.
Isacc Newton, clever bloke, set gold as a money standard for a very good reason (and he hunted down and had counterfeiters and forgers executed for the same reason) – money is a preservation of wealth, of time, of labor – of your LIFE. tampering with the value of money destroys economies and lives and industry.
He chose gold because of it’s scarcity. You want more sure you can mine it, but the energy required is what stabilizes it’s value – if wages are high, extracting it becomes uneconomical , if wages are low, mining it becomes viable – it self buffers against rampant mining as the wealth extracted from the mine distributes through the population and renders mining uneconomical.
but the core of it was the money you earned and held preserved it’s value- and it was YOURS. you carried the value in metal in gold, silver or copper in your pocket (unless you were so wealthy you had to entrust it to a bank)
His system saw inflation running at 0.1% per decade. Inflation by the way is actually *devaluation* of moneys capacity to hold it’s value. Now think – in an ever increasing population shouldn’t money do better than just hold it’s value, shouldn’t it become more scarce, driving wages, costs and prices down as scarcity increases? Yes – but that’s where the bloody banks step in pumping fake money into society – that’s where inflation comes from.. their effectively counterfeit fake dollars dilutes the real money – eroding it’s value as a commodity.
Bitcoin is actually a perfect money in a way. It is owned by no country so just like gold, it’s got value everywhere and that value isn’t determined by who’s portrait lies on a sheet of paper issued by a government. It is finite – 21 million is all that can exist. as it’s adopted and as populations increase it becomes scarcer – it’s infinitely divisible (gold copper silver had problems with that, unless like Indonesia you started also minting aluminium coins)
and yes sure, we’re not there yet – ‘mining’ the final ones of the 21,000,000 will be very energy intensive. But hey, Australia’s government only holds 300 million in gold reserves.. when I last calculated that means there’s only 18 grams per person .. that is NOT a lot of wealth backing our country! If we had to mine our way out of debt you could be sure a massive amount of energy would be put ti use extracting as many ounces as we could.
But assume bitcoin takes off , the banks don’t get to invent new ones into existence to dilute the stuff, so wide adoption would mean prices would drop, wages would drop, as whole bitcoin values go higher and higher all the time. And yes sure, the folk who got in first *and who sat on it* would have the bulk of the wealth.. for a time, but that’s no more a ponzi scheme than buying land and developing it is. Or buying a car and then 50 years on discovering it has become rare. Let me put it this way.. if I had 100 pounds in shilling 1945 coins pre-decimal and I didn’t hand them over when we decimalized, I theoretically would have been $200 worse off then. If I now converted those sterling silver coins to current-period value money I’d have over $7000 as a result. Ponzi scheme? no, I would have just been gambling my silver preserved my wealth better than bits of paper. My loss then, my gain now.
As to bitcoin’s long term value? well share market speculation is driving ‘values’ around like a drunk pig at the moment, much as it does precious metals. I mean come on.. silver has been in such short supply of late that there were month-long waiting lists to buy 1kg bars from our local mint.. industry demands masses of the stuff for electronics and barely any is ever recovered. And yet the price was still a mere $20 an ounce? no- once again fake ‘silver’ in the form of shares was manipulating it’s real value down (Memoirs of Popular Delusions discusses banks roles in crashing economies by flooding them with fake value paper while quietly shipping all the silver out of the country).
Me? I bought one physical bitcoin for a whole $18 many years back. It was all I was prepared to gamble. and being the believer that one should own one’s own wealth I selected to have a physical one I could stuff under a mattress or bury or carry – anything other than letting a bloody bank hold it !