A brother-in-law goes beyond a mere relationship of kinship. In Spain, being a brother-in-law is a topic to define the guy who, knowing nothing, knows everything and is willing to demonstrate it in all Christmas dinners.
About Bitcoin all the brothers-in-law speak, as if the rest of the world did not notice so obvious cosmic truths. Even I, you see, I talk about Bitcoin and I even have a blog that, things of life, you are reading right now. I could also be your brother-in-law.
But since we are here, let's exercise.
What's wrong with Bitcoin?
It seems obvious that it is going to shit and this is great to start a good discussion that we can derive towards the great conspiranoic metaphysical truths.
In principle, Bitcoin looks like a perfect coin: decentralized, secure, fast. It is true that it has some "problems" such as some capacity to congest its own network, transaction fees higher than what we expected when we celebrated its first years, numerous competitors born in the shadow of its code ... but none of that could prevent it from becoming a reserve of value, a valuable and covetable asset.
The idea that sustains it, the Blockchain, is one of the greatest creations of the 21st century and, of course, many things are being built around it.
But Bitcoin, above all, has two problems:
1.- It democratizes the use of money, which implies the loss of the monopoly of money by the elites that have always held it.
2.- The Blockchain is an idea too good not to be exploited for the benefit of those who have always exploited the Earth's resources.
These two problems are very serious. Above all, allowing people to use money as something that is not controlled by a centralized and powerful entity is something that none of the centralized and powerful entities that in history have issued money can allow.
You will observe, therefore, that we are witnessing a moment in which all are prohibitions and regulations around Bitcoin and the cryptocurrency court that Bitcoin has raised.
It would be enough if China prohibited the exchange of cryptocurrencies. Oh, wait, it has happened! so that the market collapses. But it is not only China but many other countries that are very important in terms of market volume. Everyone wants to control what can not be controlled. Or can it be controlled?
Is it possible to regulate or prohibit Bitcoin?
Honestly, it's not easy. Can you regulate or prohibit the free exchange of digital files? Well, as you know, until now it has not been achieved effectively and that's why, from time to time, you download from who knows where a movie.
Therefore, legally established businesses that can be used to exchange cryptocurrencies can be controlled or prohibited. That can happen and is happening although the world is wide and there are countries where to establish a business of this type without many regulations. Let's leave aside the imminent appearance of decentralized cryptocurrency exchange services because when almost everything is very well regulated they will break the deck again.
But you can not regulate Bitcoin itself. No one can stop me from sending you some satoshis or a few Bitcoin. It is not possible to stop the flow of cryptocurrencies from one place to another. It is clear that if momentarily some prohibitions take place, the volume of Bitcoin exchanges that define its price based on supply and demand will be substantially cut. And, probably, that is what is happening.
Is the bubble deflating?
You have not understood me well. Bitcoin is a scarce currency. Unlike the seventeenth century tulips, Bitcoin is not something that can be produced in a massive and infinite way. There will only be 21 million for centuries, as you know (actually less since many are lost forever). There is not really a bubble beyond that, at a given moment, there is a lot of demand and in another the demand goes down or many people want to sell compulsively or many people who bought and sold can not because Exchanges are banned in their country. But there will never be an excess of Bitcoin. Memorize it because this is the key to a good discussion of brother-in-law.
Is Bitcoin a purely speculative value?
Largely yes and that is one of its weak aspects. Nobody can quietly use a coin that at one time is worth $ 19,000 and shortly after 7,000. Maybe the problem is the capitalist mentality that splashes everything. Bitcoin could be a good currency if it were not for the desire for quick enrichment of those who see in everything (be it a digital asset or a rice plantation) an opportunity to get rich quickly. Think about it, if people only bought Bitcoin to save or for their commercial transactions, its price would probably be quite stable although with their natural tendency to increase in value compared to fiat currencies (which are not scarce and are constantly or arbitrarily minted according to decisions centralized).
But there are other paths
It requires a certain courage and capacity for action to escape the speculative current. Bitcoin has not achieved it but as it is still a scarce value, I am totally sure (word of brother-in-law) that will inevitably surprise us once again climbing to high peaks never before reached.
Now, let's leave aside the hypnotic current of the markets and think if a currency (physical or virtual) could be used with a value decided by such a community. Suppose, a town lost in a mountain that, suddenly, finds a certain amount of rare stones, some kind of beautiful and brilliant opal. There are not many but in the town they decide to share them equally and use them as money. Would it work?
The thing is simple: let's say that an opal equals one hour of work. From there, you do the rest of equivalences. In exchange for a certain amount of food I give you an Opal with which you can then pay for an hour of work from another neighbor who is a blacksmith and makes you the blade of a knife you need.
[At this time, any brother-in-law is already drunk and begins to surprise the audience with spectacularly utopian theories. The others begin to get a little fed up]
Wait, wait ... do not go, fuck. Maybe my previous example sounds a bit like ... wait. Let me continue just a little more.
What if a cryptocurrency was used by a large community with a value decided by the community itself?
-Another glass of wine?
-Come on!
Okay, have caught me, yes, I'm talking about FairCoin again. But do not tell me it's not worth it. It's one of the most fascinating socio-economic experiments in history, seriously ... I'm not drunk.
See the elements:
A decentralized electronic currency, secure, fast, scarce and, unlike Bitcoin: ecological and with insignificant transaction fees.
A community that uses it in real economic transactions.
The people of this community care very little that in the speculative markets it is paid more or less for their currency. They simply use it, with a value regarding the Euro decided by the whole community on those things that anti-system people do and that they call assemblies.
Would it work? Would we break the last chains of slavery that are the ones made with "legal" currencies? Could a currency like this be regulated or prohibited?
-Okay, now I am drunk. Merry Christmas!
-Merry Christmas, brother-in-law!. You are very unbearable but we love you ... despite all]