Mass Adoption as a Ponzi Scheme
Friday July 1, 2016
Bill Maher recently proclaimed in his show’s segment, New Rules, that millennials have romanticized socialism. In this rare instance, Maher directly criticized the entitlement mentality that has supposedly infected this generation of youth. I had to check the program title, since for a second I thought I was watching Bill O’Reilly.
Millennials don’t remember a threatening Soviet Union or any Soviet Union. The only time they’ve ever had to crouch under a desk was to go down on their teacher. So the new generation is ready for socialism. Problem is, they may be ready for a little too much socialism.
Almost 2/3rds of Sanders’ voters want free college and free universal health coverage for no more than an extra thousand dollars in taxes…even though that’s not really socialism. That’s Santa-ism.
[Millenials have gotten] too used to getting shit for free.
“I was told we’d all be rich!”
A generation currently exists where the majority truly believe that they are entitled to nice things. This terrifying plague has reached Bitcoin, albeit in a new form. The entitled consumers attempting to hijack Bitcoin have been pushing the political agenda of mass adoption – a highly consumerist mind set onto the populace.
The consumer has been programmed into believing they are the driving force in an economy, when in reality they are dependent on their machines for their very survival. The average consumer is unable to survive in the wilderness. Even those who wish to revolt and return to nature usually end up succumbing to the elements. They will ravage and consume all the resources of a given land, with little to no contribution in return. Consumer mass adoption necessarily means endorsing and reinforcing this mentality. Bitcoin, by its fundamental nature does not reward something for nothing. Everything takes hard work.
Roger Ver has become desperate in inducing mass adoption. In fact he said:
If scaling bitcoin quickly means there is a risk of [Bitcoin] becoming Paypal 2.0, I think that risk is worth taking.
The words of a true misguided idealist – one who refuses to believe there are people who will rob you at gunpoint, or acknowledges the reality that VC capital tends to fuel stupidity in Bitcoin, and has been consistently harmful to so-called Bitcoin businesses.
Roger Ver would rather entice young millennials to follow him with false promises of unrealistic idealism, than inspire them to contribute actual productivity to the economy. Everyone who has blindly followed a scammer, regardless of intent, is inevitably slaughtered by the wood chipper. Unlike in previous times where casualties were limited by a smaller population, Roger Ver’s misguided vision of mass adoption will lead to nothing less than a massacre.
I got involved in Bitcoin because I want to see [the underbanked use it].
Regulators throughout the world have implemented capital controls on nearly every fiat to BTC interface, by requiring KYC (Know Your Customer) and citing anti-money laundering and anti-terrorism initiatives as the rationale. The way people procure Bitcoin through these interfaces is by linking a regulated bank account – an inherent Catch-22 for the underbanked. Regulators have placed their guard at the gates of these exchanges, and are already attempting to prevent “undesirables” from even using Bitcoin.
The alternative unregulated approach is being attacked. The notorious Bitlicense which has become law in New York prevents peers from legally exchanging Bitcoin for fiat currency, which has led to an alarming increase in violent criminal activity revolving around cash exchanges for Bitcoin. Leaving the Web of Trust as the only remaining safe bastion to exchange Bitcoins for fiat without announcing it to the state. Does Roger Ver expect the underbanked to become registered state conforming citizens in order to “correctly” acquire Bitcoin?
Bitcoin’s financial infrastructure cannot support mass adoption in its current form without causing a lot of unnecessary chaos. Lets say 1 million people wanted to buy $1,000 worth of BTC:
;;calc 1000 * 1000000
;;market buy –fiat 1000000000
Bitfinex | This order would exceed the size of the order book. You would buy 28828.869 bitcoins for a total of 76314538.6219 USD and take the price to 16543000.0000. | Data vintage: 0.0049 seconds
There isn’t enough liquidity in the market to support direct mass adoption yet without creating an immediate bubble. A bubble caused by so-called mania buying as described on Trilema during the Mt. Gox “we are a victim of our own success” bubble caused in the spring of 2013:
The situation in the market was becoming macroeconomically concerning, in the following sense : major holders were done selling, the vast majority of trading action consisting of trades among newcomers brought in by the recent significant press exposure. These people had little if any understanding of Bitcoin and not much inherent interest in it other than “it’s the new hot thing to make money online better get in at ground floor” sort of bullcrap. Having fiddy thousand such lemmings trading with themselves on ever-increasing nominal prices is practically a game of musical chairs, and in any case no different from the numerous “bitcoin gem” type Ponzis that have sprung up recently. Apparently this sort of nonsense is somehow very familiar and very comfortable to the clueless consumer mind.
Bitcoin should be valued based on its economic productivity, even if that just means people storing wealth for later use (thus truly having faith in the future). The mass adoption crowd doesn’t realize they are consequence of over consumption – quality has been sacrificed for quantity as an acceptable loss. Fortunately, Bitcoin will never see Facebook-like mass adoption, instead it is like a tree that takes millennia to mature.