-- Posted Monday, 15 April 2013 | | Disqus
By Vincent Bressler
This is not an article about what Bitcoin is, you can find that information all over the place. There are long, technical arguments about whether Bitcoin will scale, whether it can be hacked and so on. While these articles are interesting diversions. But they miss the point.
The defining characteristic of our time is that real, tangible property has been disconnected from "wealth". This has been accomplished through complexity, via computers. The mortgage fiasco is a good example.
Traditional methods for tracking mortgage obligations on paper with strict rules for title transfer were subverted by first loading the entire system into computers then bundling, rehypothicating, fraudulently multiplying, etc. Banks were loaded up with mortgage bonds whose connection to real property could not be untangled. When these banks went under, their assets were stripped by other banks and the bad bonds were swept under the rug where they still rot.
I'd like to give this disconnect a name, financial subversion. Ponzi schemes are one form of financial subversion, and they have been around for a long time. However, with the advent of computer technology, the pervasiveness of financial subversion has grown far beyond all previous experience.
The value proposition of Bitcoin is that there can never been more than twenty one million of them, and that they can be anonymously and conveniently passed between different owners. There is nothing wrong with that proposition, in fact it can be viewed as something that is tangible. The problem with Bitcoin is that in order to realize the value proposition, one must make use of an inherently complex system. Bitcoin's peer-peer network is both fundamental and also a disconnect between tangible property and "wealth". As Bitcoin becomes more valuable, the incentive to subvert Bitcoin's peer-peer network will grow.
We are approaching a time when the public will realize that any form of "wealth" that can fall victim to financial subversion is not wealth at all. When that time arrives, Bitcoin is going to look like a silly idea.
Vincent Bressler
vincent@missionctrl.com
-- Posted Monday, 15 April 2013 | Digg This Article
| Source: GoldSeek.com
