The invention of the “Bitcoin” has captured the imagination of the world. This has happened because the world today enjoys a system of instantaneous world-wide communication, accessible to almost anyone.
Never before has there been a financial speculation of this magnitude, because never before has the world has such a wide and instantaneous access to information.
There are several factors which assist in the acceptance of “Bitcoin” and which are hardly noticed.
1. Its name, “Bitcon” elegantly and simply combines the concept of “Bits”, units of digital information used by the world’s system of information, with the term “Coin”. The image of “Bitcoin” is deceptive, for we are presented with images of non-existent coins which are totally imaginary, shown to us as supposedly gold “coins”, which bear a capital “B” altered to suggest a Dollar, with the “B” crossed with two vertical lines. This is a veiled deception calculated to give the aspect of authenticity to the concept of the “Bitcoin” as a monetary unit. When the “Bitcoin” was launched, the world was simply told that it was money, and no substantiation for this claim was ever provided.
2. Adapting their “spiel” to a world-audience with the critical judgment of a twelve-year-old, promoters tell us that the “Bitcoin” is “mined” - another deceptive image, that attempts to equate “Bitcon” with gold coins, whose existence derives from the labor of authentic mining. And we are told that this operation of “mining” the “Bitcoin” is carried out by “miners”, to further enhance the appearance of physical reality to what are digits on computers, and there is an attempt to justify the value of these digits supposedly “mined” by “miners” by referring to the hard work that is involved in this “mining”, whose prize is to obtain a new “Bitcoin” recently “mined”; and we are informed that this “mining work” requires a large investment in computers and electricity. All of this is mentioned to take advantage of the mistaken idea which prevails amongst the masses, that the high cost and arduous work involved in the creation of a good insure its high value. A completely false notion, of course. So the ceaseless promotion of the “Bitcoin” is based on the presentation of false images.
The “Bitcon” embodies a radical defect: it will always be in one of two conditions in the marketplace:
1. There will be a majority that wishes to purchase the “Bitcoin”, against a minority who wishes to sell it, or
2. There will a majority who wish to sell the “Bitcoin”, against a minority who wish to purchase it.
It will be impossible for “Bitcoin” to achieve a condition of parity between buyers and sellers, as is the case in the market for all goods bought and sold in the world: in the world of commerce, purchasers wish to buy low, but when they begin to buy, the sellers hold on to their goods, to get the best price. And contrary-wise, when those who have merchandise wish to sell high, they come up against those who wish to dispose of their holdings, who lower the price offered to the sellers. In the case of all goods, there is a fluctuating balance between bid price and offered price, which originates in the use given to each good in the world-universe of goods.
In the case of the “Bitcoin”, its spectacular rise in value has emerged because it is an object of a world-wide speculation; the public, anxious to obtain huge profits quickly, is pushing its price skyward. There is at present a strong majority of buyers and a small minority of sellers. Its spectacular price is quite disconnected from the universe of goods which serve humanity.
The lack of stability in the value of “Bitcoin” is part of its essence: like a coin tossed in the air, it must fall on one of two sides, “Heads” or “Tails”. It will never achieve stability between buyers and sellers, like any other merchandise, because like a tossed coin, it cannot fall on its edge. There will always be either a majority who wishes to buy, as is the case at present, or there will be a majority who wish to sell. “Heads” or “Tails”. “Tertium non datur”- there is no middle ground.
There can be no “middle ground” for “Bitcoin”, because the only reason that “Bitcoin” is soaring in value, is because its value is soaring. And conversely, at some point it will be collapsing in value, simply because it is collapsing in value. The public has no real “organic” reason to own “Bitcoin”, based on its utility in the world of goods: when “Bitcoin” begins to fall, there will be no buyers to stop its fall, because at no point will there be buyers who will say to themselves, “At this price, I have a use for “Bitcoin".
Therefore, after the apparently unstoppable rise in value of the “Bitcoin”, there will inevitably come a moment when this rise will turn into a sudden and swift fall: this will happen when the sellers become the majority and want to realize their enormous profits: they will suddenly find there are no takers and the value of “Bitcon” will collapse.
The stability of prices in the world of goods (the prices of copper, iron, oil, aluminum, wheat, etc.) derives from the use the world gives to goods. “Bitcoin” and its imitations are not goods, they are simply digits that move outside the purview of official controls of the transfer of property of quantities of money - their only real service.