Gordon goes all philosophical... or economical... or both.
It's Crypto-politico with Crypto Gordon Freeman!
The topic you see above is an important one, and the inspiration for this post comes from a really smart reply someone posted on one of my other editorials.
The comment from user "Waldee", to summarize, was this: What if the same thing happens in crypto as what's already happened in the fiat world, where the wealthiest 5% own 90% of everything valuable in crypto, and the ideals of crypto making things better, offering some form of freedom, doesn't work because once again the top 1% of the top 1% own everything here too?
It's a fantastic point and a fantastic question, and I agree that it should be a primary concern for us all.
I wrote them a long reply, ending by acknowledging that I really want to make it the center for this new post.
First of all, let's look at the facts; not all crypto is equal. There are absolutely flight-by-night scams. There are start-ups that absolutely just want to go after investor money, pump and dump. There are legitimate crypto projects that don't plan to grab and run, but in the end are really just about getting a huge pay day as well, and within a certain range, there is nothing wrong with creating a token project where the sole purpose is to make a ton of money and make investors happy. And then, there are projects that we all want to speculate on (meaning we wanna get that huge 5000x gains) but they serve a real, technological or even moral, sometimes economic purpose. There are utility tokens, commodities, stablecoins, and probably a lot of unregistered securities.
So, my first observation, and question as such, is that in the early days, we wanted to simply be left alone to take the risk. Even if we knew that things taking place in crypto might deserve to be treated with exactly the same rules as public offerings or securities, we liked that they were being treated like their own separate category in the wild west of crypto. Leave us alone, we'll take our chances. But we can now see the growth in the sector is too great for the governments of the world not to address them at this stage. So, my disclaimer for you as we enter into this unknown territory, is that you do need to treat everything like a risk. It is a risk; a huge risk! There are absolutely no guarantees. Every single project at the top of the coin and token list offer some good reasons to be concerned that the governments will cause us trouble, or the actual people behind the scenes are less stable than Tether- lol... see what I did there?
If we accept the premise that there is something of value in crypto, that not all coins are treated equally, and that even the very best or most popular projects are a huge risk, then we can move forward to ask ourselves whether we can afford to, or should be attempting to take such risks. I think even the more mature crypto-citizens will say that they have decided to plant their feet here even after addressing all of the 'real world' options.
Investing in real estate is absolutely one huge bubble that only has a certain time before it bursts. There is too much dirty money in lending and manipulation of markets to think that uncontrollable rising prices are a value-thing, and not a sign of extreme inflation already taking place. As Michael Saylor has rightly pointed out, the trouble with real estate is that all it takes is a period of manipulated unrest and your property is high risk purely due to where it is located. Typically, property central to city center in progressive political counties are the highest priced, but these are regions that we see staged, manipulated events like 2020 where everyone is moving away. You can't pick up your $3M real estate investment and move it somewhere safe. But, you can withdraw your Bitcoin to a private wallet and hold it while you travel anywhere 'safe' in the world.
I do believe that gold is a good store of value, but we should not make the mistake of expecting that to translate to a big pay day. Gold has seen similar prices over decades, so no one is necessarily getting rich by storing value in it. The problem is you can't really travel with your gold if you needed to, and the governments of the world tend to ban ownership or confiscate private ownership in times exactly like these. Again, digital gold is starting to look really good, but only if there is something truly tangible of value underlying.
So, there are two important sides to this incredibly important topic. One is this: will the governments allow something to exist? The second is how to interpret what they actually will allow people to do.
Government: are they really looking to ban Bitcoin?
This goes for any coin that uses Proof of Work, but in general the big ole scary climate change monster is creeping up behind you, so you better not open your closet at night or look under your bed, because climate change might get you. Yeah, the climate changes. All governments are going to have to pledge going carbon-neutral, and all industries are getting caught in the carbon credit tax; it's a little disgusting, and kids the world over are brainwashed by this leftist b.s. (which is why every one of my posts get 2 thumbs down from the two Commie idiots that don't like me. So be it! May you find Jesus). Much like everything centered via U.N. NGO's, if they truly wished to conquer it, they would have done so by now. Hunger, water justice, social injustice; there is a greater need to own the discussion and find new ways to tax us all, than ever the desire to actually solve the problem. But, the left and the politically unaware will fall for it, because 'they' are masters at convincing weak-minded people that the boogeyman is coming to get them. Gordon pauses to look over his shoulder and make sure Greta isn't sneaking up behind me to rise up and shout "HOW DARE YOU, GORDON, HOW DARE YOU!!!!"
The truth is the same with crypto. We're here from the government, and we're here to help; Reagan mentioned as the scariest words a person might ever hear. Gensler with the SEC wants to protect us from unregistered securities. In doing so, he will be hand-picking winners and losers in the market that already exist, yet have never registered. If the goal was to protect us, there's an easy way to provide extremely clear 'clarity', and let's say just charge a $500 late-registration penalty, and that is that. But the real goal is to wreak havoc on the market and scare money into the hands of the wealthy.
The drop of Bitcoin, and thus the rest of the market from $69K to $35K and counting has only arrived after Gary's leveraged ETF futures started liquidating essentially every Friday. He approved a futures ETF because he used to be the head of the futures trading commission for goodness sake. There is nothing predictable about futures, and you either win or lose; it is gambling, unless you know exactly what is going to happen.
ESG; the green initiative. Bitcoin's going to use more energy than all of the electricity on planet earth by the year 2020. What? Isn't that true? The global government said it was true. It must be true. In truth, Bitcoin uses 0.6% of the world's energy, and more than half of it is green, renewable energy, and from that, nearly half is naturally generated energy that was otherwise going wasted. The better argument is that because of the steep challenge in computation required by mining Bitcoin, it provides the perfect incentive for mining companies to find cheap energy, to help that location optimize energy use, and to make use of wasteful energy processes. The need for good, powerful electricity is an incentive to help the industry make cheap, constantly available energy sources, and it isn't a philosophy; it is reality.
So, if they lie about futures being a great way to trade Bitcoin without owning Bitcoin, and they lie that it creates pollution and waste and uses all the world's energy and there are people freezing in New York because Bitcoin stole their blankets, then you must ask yourself "why?"!!!
What will governments actually allow people to own?
The good news is that I believe there is a method to their madness. Governments count on the average person remaining relatively dumb as a doorknob. Their plan is to scare most people away from the good, scarce assets, changing up the narrative, warning about shadowy super-coders typing their way into your bedrooms at night, then explaining how the same technology can free poor people in impoverished nations. The more they warn about risky investments, the more one should investigate the impact and who owns it. The very people who are attempting to acquire more, are trying to keep you from having the real thing. If you trade derivatives, you are gambling on the opportunity to guess at the spot price. If you trade contracts, you are agreeing to a principle that you will purchase an imaginary item that represents the future price of an asset. If you trade any form of futures, whether you long the price to go up or short the price to go down, you are betting on the very thing none of us can guess, because we don't have the money and political power to make the price dance as we wish.
There is a reason that governments want more and more to 'protect us' by allowing us, gracing us with the privilege to gamble on the price of assets, while not owning any of the underlying asset. This is more true with Bitcoin and Litecoin than many other projects, because they are scarce and protected by a vigilant network that relies on energy. That is a long discussion, but I am not purely anti-Proof of Stake, I just think that it is not solving the actual issues people believe it is.
My instinct is telling me that the reason the government entities do not want you to own digital gold and silver, is because they want it all, and they can't really take it from you. Even if every country finally builds up a set of KYC/AML rules and scares wallet creators to dox their anonymous users, they cannot prevent an entire world movement from mining Bitcoin without pulling the plug on the internet, banning all creation of powerful GPU's, and shooting a couple of satellites out of the atmosphere. They surely could do all of these things, but they recognize the greater value is to simply acquire as much of the asset as possible.
The true mad geniuses in the government have crunched the numbers on scarcity, and they know who the future winners are going to be. The Amazons, Googles, Apples, Microsofts, Facebooks of the world are going to end up being very strong members of the Bitcoin, Ether, NFT and metaverse space. Whether I think much of it is bizarre and illogical, it is where the future is going.
So, even though the governments do not want what is best for us, the fact that they are using scare tactics and bad economics to cause financial ruin and prevent the masses from owning scarce digital products, you have to look at their actions, and at the end of the day, the real attack is on wealth and anonymity. They don't want you doing as you wish in the privacy of your lives (not just at home, but anywhere you go, you deserve a sense of self-sovereignty), and they do not want you finding a path to independent wealth.
In the U.S., this has become the very opposite of what our foundational government established. We had people who knew the oppression of the European kingdom structure, and they wanted to escape it. Sadly, today's oppressive governments do not want you knowing all of those volumes of documents about freedom from oppression, but rather to demonize the European settler. Just keep it simple, and remember, they fought with their own lives to ESCAPE oppression, living under extremely harsh conditions, in order to have a chance at tough freedom, over easy bondage.
Today, there is a rush towards global Communism and it is obvious, but it takes waking up out of the Matrix to see it. I had to travel through the dishonesty of the government to work my way around to the initial concern; since government itself will be seeking to acquire Bitcoin and other top assets, we now understand their incentive to scare the average person away, while allowing only certain forms of access to the price; keep interest enough to pump the value back up as needed, but just enough fear to cause massive liquidations. It sucks, but it is reality.
Now, realize that the top whales of the world are bankers and also these maniacal globalists like Musk, Gates and gang. Love them, hate them, this is not where I pose that debate. They have become so wealthy because they learned years ago, that the only way to become more than just a billionaire, is to shift focus from the private sector, meaning you and me are the customer, to the public sector with governments as their customer. Incentives, subsidies, unstoppable contracts; there is a reason Bill Gates stated years ago that he was going heavier into vaccines because of the layer of protection from law suits and it is the most profitable investment he's ever had. People believe he is just a humanitarian, because it is his non-profit handling all of that newly found wealth. But, that is the loop that ALL of the top 1% of 1% use to protect their wealth, and part of the tax resistance in their structure. Remember, rules for thee, not for me. The government wants to tax you more, and more thoroughly, but they somehow always have a way of owing nothing themselves. The rules we all fear, they are not founded in morals; they are simply in place to fuel the corrupt.
So, I want to be a whale some day. I wish to be independently wealthy. I will seek out some legal loopholes to help protect my desire to earn a lot and keep a lot, and in turn it will offer me the freedom to give it away to actually SOLVE some of these world problems. It is going to happen I promise! Not all whales are bad bankers and crooked globalists, but the most public examples exist and we all know them by name. Among the silent, anonymous whales are early miners, those who have set up exchanges, who have done incredibly well in early trades, and then it trickles down to millionaires who strongly believe in the scarcity of their assets and are willing to gamble on things like NFTs and the viability of Ether, Litecoin and Bitcoin.
That intelligent question as to whether the same thing is simply going to happen in crypto as we see in the regular world of finance and wealth, and the answer is yes, but also; we live in an unprecedented time where something entirely new has been created and has now been proving it works for over a decade.
The only way to be certain to lose is to not take a risk.
There are greater risks by simply remaining 100% fiat in our work and in our earnings, than the risk of what may fail in crypto. If the powers that be are able to crush our opportunities in crypto, then I promise you the reality is that no one anywhere else has any better ideas than what we're doing here. I've assessed everything from interest earning accounts to CDs, government bonds to mutual funds. Nothing is guaranteed, and everything is absolutely unfairly heavily taxed, both when you earn and when you save, both when you profit and when you re-invest, both when you want to cash out and when you want to pass it on. We the citizens of the world absolutely need to rise up and be a terrifying force to be reckoned with, but it isn't going to happen. Over-taxation at some point, can only be dealt with by starving the greed at the center of it, and that is why 'they' are so desperate to treat us all like money launderers, while they do the exact thing they accuse the peasants of doing. Trying to earn and hold on to independent wealth is a God-given human right; all the rest of the stuff is fluff.
We may all end up being wrong and losing our fiat in the hopes of earning crypto that is of lasting value. I believe it is the right risk to take, but never pretend the risk is not there. You can count on the fact that if none of us try to mine, try to save and earn crypto, try to HODL through all the noise, then "they" will get it all, and they will make certain that it is absolutely necessary to own, in order to rule the world. If we stay in the fight and earn, buy and store as much of the truly scarce digital assets, we are taking part in the future economy as best we can. Energy use, shadowy coders, launderers and criminals are all just noise. They do not go away if you eliminate crypto, and frankly the last thing they want is to use an immutable public accounting for theft. Kill the crypto and the criminals will do what they have always done; steal fiat and valuables. Nothing will change. Extortion will continue as it always has. Blackmail, laundering, and bankers will be here until the end of time, so it is my opinion that the more they try to scare you away from your stack, while simultaneously trying to create 'safe' on-rails, you should take that as a sign that they want as much of the real asset as they can get, and that seems to be exactly what they are doing.
And on that note, a hopeful Crypto Gordon Freeman, the free man, imaginary Crypto superhero emeritus... for now... out.