Saturday, 16 December 2017

Yelling in the wrong direction, or else all is lost

To paraphrase the Buddha, three things cannot be long hidden: the sun; the moon; and the truth.

If women have been "weaponised" by universities or the media or whatever, it means someone is doing the weaponising. Which means someone wants women to be weapons. Or did you think the person who will eventually replace Harvey Weinstein at the top of Hollywood will be a woman?

Females are clamouring to get into university, while men are leaving it in droves to begin new start-ups and skipping tertiary education almost entirely. Women stick around because they think men had power because of the symbols, like CEO, General or PhD. So, they fight to get symbols, but never for the specific power to be taken seriously without a university education. Power is hard. It takes effort, and not every man can do it well. Maybe women can perform leadership roles better than men. But if that’s true, why do women choose to fight like this? Is it because they thought symbols would give them power, or are they pursuing the symbols because they have the trappings of power?

Some female grads will be hired into CEO roles, fine. No problem with that. But there’s a difference between someone who is a CEO and someone who is being a CEO. And they are not the same people. Some people want to get more power from the job, and some other people want the job to offer them more power. Typically, the former is men and the latter is women. But don’t get hung up on the sex, the point is the mindset. Those in the latter group want an external entity to want to give them more power, but they avoid having any input in deciding their own success and power.

And don't get me started on women wanting to become president or prime minister. The real power has been in lobbying and the civil service for at least the last three decades. What you are seeing is a series of power battles, wrapping themselves in the costume of "civil rights." This isn't equality, this is resource competition. It's always resource competition. All this nonsense is happening because women cannot rely on men to act like... men. The public is exhausted with men who don't deliver on their masculinity. It is exhausted with their general loss of ambition, drive, respectfulness... and purpose. Men are doing this because they seem to have this haunting suspicion that their true worth – the lie that the only worth that matters is "in other people's minds" – is signalled by women's opinions of them. After all, money, jobs – all that is fake.

You hear it all the time. Women run the damn country because of the restraint of men. And they’re not giving men any credit for that fact that we’re not slapping them upside the head. They’ve forgotten that a woman in a position of authority is not a given thing, it’s not natural. The social contract keeps men from doing certain things. Weak men let this happen. Feminism has emasculated men.

Really? A girl did that to you?

If it’s annoying that women can yell today, understand that it’s because men let them yell. The only power women have is the power men let them have. They know this is true, which is why they keep prodding and poking to stop us from remembering. The moment that happens, they'll be back in their kitchens faster than you can say Donald Trump. But the reason men let women have any power is not coming from some drive for equality or interdiction by the law. The reason is always the same: it is a defence against change, against the effort. Men don't believe that women rule the world, they hope and wish this is true. Because then he never has to become a man.

The older I get, the more I see women don't want to lead, they want a leader. Hell, most men don’t want to lead either. If you look down from 30,000ft, everything feminists are doing to "change the system" appears to be a subconscious desire for an actual, working patriarchy. That's why they like the Islamists. To people desperate for a leader and exhausted with a lack of masculinity in the West, Islamists are the uneducated person's cartoon, primitive idea of men. They might kill you, but at least they’re acting like men.

"Well, if the public would stop taking men's money, then we could develop ourselves." But it's not the taking, it's the indecision over how best to spend resources that will kill us. Social welfare is the definition of indecision. It is indeed all about money, but money equals time. And the money you spend on yourself today, or on welfare, is the time you are allowing to be robbed from your future, or, more importantly, someone else's future. But look at it from this angle: welfare programmes wouldn't exist if they failed to make a profit for a whole bunch of well-placed men. Are you one of these well-placed men? If not, look for them. They are hiding in plain sight.

You might say the law is stacked against men. A lot of idiot men say this, actually. Yet who do you think enforces the law? When a woman is beaten up, who does she call? A bigger man. She doesn't call another woman. The moment I lose faith in the law, I'm still a man, but all she is is a girl. Just because a girl is next to it, doesn't mean that thing is about women. Divorce courts are tipped in a females favour, but it has nothing to do with girl power. The system is set up to favour women because the law views women as less capable than men and in need of protection. Women would prefer not to talk about this because the still secretly believe they are inferior to men.

Don't yell at me, I'm just telling you how the system sees you. It has asked men to restrain themselves for the good of the economy, which must always expand, every year, no matter what - that's the point of capitalism - and men have obliged; don't blame the women, they did absolutely nothing. Men wanted women to be in the workplace or in politics. Men opened the doors. When a woman says her CEO title makes her a leader, call her sugar-tits and remind her all of this is about labour costs. The system doesn't care about gender, sexual harassment or skin colour. You are a battery, that's it.

The problem isn't women. The problem isn't welfare or voting either. Men are lying about what their eyes really see. They are viewing the world in symbols, and the system will always have the power to interpret these symbols. Men are not being restrained, they are restraining themselves. In The Matrix, a child explains to Neo it isn't the spoon that bends, but only himself. That impotence men feel isn't coming from outside. Men have to believe society's rules are the limitations - they wish it to be true. Do you see?

Many men hate that they can't walk up to a hot chick, take her home and bang her. Their hatred manifests as misogyny, usually. But the stumbling block isn't the woman's hotness, it's the constant messaging he receives: all this sex, all this power - why not me? Men don't ask why, if everyone they meet is frustrated by the same thing, then how real can that source of messaging be? Instead, they splinter their thoughts into two choices: I am inadequate or the system is against me. Those who don't want to kill themselves choose option B.

It's not the lack of sex that frustrates men, it's the inability to seduce a girl in his way - the toxic measure of his worth as a man is signalled by other people's (women's) opinions of them. Unless the seduction goes exactly according to his plan, it doesn't take. The sex is irrelevant. There are men who sleep with dozens of women who think they can't pick up girls. Each encounter is psychologically buffered by the excuse "she was drunk" or "she was recently dumped" or "she was a slut." Or even "that doesn't count, she loves me," which is why married men feel the same lack.

H.L. Mencken is worth listening to on this because he flips it over:

"The woman who is not pursued sets up the doctrine that pursuit is offensive to her sex, and wants to make it a felony. No genuinely attractive woman has any such desire. She likes masculine admiration, however violently expressed, and is quite able to take care of herself. 
"More, she is well aware that very few men are bold enough to offer it without a plain invitation, and this awareness makes her extremely cynical of all women who complain of being harassed, beset, storied, and seduced. All the more intelligent women that I know, indeed, are unanimous of the opinion that no girl in her right senses has ever been actually seduced since the world began."

The problem isn't that advertising sets up false aspirations, the problem is that men trap themselves in the prison of using a scale for their self-worth based on the opinions of people who don't know them. And so they seethe with rage at the blonde sitting near the bar, or the female CEO. But you are yelling in the wrong direction.

Instead of developing a superego separate from their ego (a god structure) they incorporated their superego into their ego ("everyone has the same morals deep down"). They didn't kill god, they enslaved him. God will rule in your favour each time ("you don't understand, this time is different..."). I sympathise, but this path will be the death of everything you love.

The world these angry men think exists - the one in which everything is controlled by harpies - doesn't exist. And the fact that men think it exists drives women bonkers. It's the same annoyance non-white people feel when a white person says they're not racist but "minorities are stealing all the jobs." It is necessary to a weak man's existential survival that he believes women and minorities are in charge, or else all is lost.

But if the man chooses option A (I am inadequate), then the answer is to become adequate, not to kill yourself. Women aren't dudes. They aren't looking for the same things we are. Discover what women want, and then become that guy. The trick with existential power is that if continue to believe your worth is judged by others, then you won't feel the impact of this next sentence: The problem is you.

Stop lying.

Thursday, 14 December 2017

Paper beats rock, aluminium beats plastic

Of any recycled product anywhere, aluminium recycling is far the greenest. Forty recycled cans save three litres of petrol. It uses less water and energy than all other recycling efforts, and less water and energy than aluminium mining, which is why aluminium companies are desperate for people to recycle aluminium. Recycling aluminium cans is nearly at the level of reuse, which is the greenest possible option.

Coca-Cola has experimented with aluminium bottles to replace some of its bottle plastic as oil before oil dropped relative to aluminium. Plastic is extremely difficult to recycle, and the entirety of the bottle is never recycled – there are always waste products.

Almost all plastic in consumer products comes from oil. And all plastic used for packaging comes from oil. More than 40% of the oil consumed in the US is not fuel or burned, but rather is used for chemicals, the vast majority of which are plastics. To recycle plastic, you need organic solvents (organic chemicals, not organic food). Guess where the solvents come from. That's right, oil. In addition to solvents, you also need heat, and heat comes from burning oil (mostly).

Another way to think of this is: every aluminium atom on the earth is still on the earth, either as a metal or as part of a compound. We don't really use up aluminium. If we all threw them away into a landfill we could potentially mine landfills for aluminium. Paper is basically cellulose. And some insects that will happily chomp on paper. The only problem with paper is the oil-based inks, bleaches and binders.

The plastic from oil gets used up. Oil out of the ground isn't replaced when you toss a plastic bottle. Because chemical reactions often produce heat as a by-product or require heat to start or as a catalyst, there is a net loss.

So other things being equal, choose metal or paper packaging over the plastic. Don't drink water from plastic bottles, carry a refillable aluminium bottle.

Zombies won't eat the status quo

I still think The Walking Dead is the smartest show on television. But it isn’t about zombies, it’s about the survival of traditional conservative moral values during a social breakdown. It’s about today, not the future, which means you're running the wrong way.

Zombie films are war films in which civilians fight an easily defeated invading army. The prospect of zombies is frightening only in their definition: they are undead, which is unsettling to those of us who previously considered death a permanent state of immobility (such as religious people). But they are also slow, stupid, unorganised and as it turns out killable, which makes avoiding or fighting them not especially difficult.

Consider which would be worse: to be stalked by a dozen zombies, or by a dozen hungry tigers? The latter is never the basis of a movie even though it was the basis of human civilization for untold thousands of years.

The function of zombies is to destroy the social order without the chance of it being revived quickly or replaced with a new central authority. There is no cure, and neither the radio nor the TV work. In fact, those two symbols in themselves are code to prove society is finished and civilization depends now on the few survivors. No cure is equivalent to hopelessness, because to modern narcissists doing the work to discover a cure is out of the question. That’s for the experts, and they’re all (un)dead.

The Walking Dead spends most of the time screaming that the survival of civilization means we should cling to remnants of that now-dead society, by maintaining traditional conservative values in the face of their complete obsolescence, as if those values are the sum of civilization.

The zombies (note: they never call them “zombies” in the show) represent that clinging to the past, the unspoken tension between the people who want to settle down, and the bottled rage of those who want to “win it all back.” But beyond that, the zombies are little more than a quick jolt of action to break up the tedium of dialogue about property rights, gender roles, the sanctity of marriage, gun rights and every other conservative talking point.

The Walking Dead reinforces a suspicion I’ve long held: that television can never be countercultural.  It is always slightly right-of-centre, even as that centre flows leftward. It is always safe and predictable, reinforcing the status quo. It is never stridently progressive, never threatening. Film can be countercultural, challenging the status quo. And it can be dangerous.

At no point in the Walking Dead does any character suggest they don’t need to ask for permission to stay with the group because the idea of property ownership died the moment the first call to the police went unanswered. But no one suggests that if society has collapsed, this is a chance to finally build a socialist utopia in which everyone owns everything in common.

If the dead walk the earth, might actually does make right. But no one says anything about this. In such as world, property can be owned if possession can be enforced with direct violence. If Group A has more guns than Group B, Group A automatically owns everything Group B thought it owned. If a group shows up on a farm armed to the teeth and the farmer doesn’t carry a gun, therefore the farmer is trespassing on his farm, not the other way around. Priority is irrelevant.

Likewise, there are more scenes of women performing the classic maternal housekeeper role and men being the hunter-gatherers than I could possibly list. Wouldn’t women be just as frightened and nervous about the lack of a predictable food and medicine that they would seize any opportunity to forage, scrounge or hunt for food or supplies as well? But we don’t see that. Once they set up camp, it is Father Knows Best every time. Women make the food, women hang the laundry, men keep watch, men plan the next move.

Post-apocalyptic stories are typically about how the survivors carry on, about how civilization lasts.  No literary work has addressed this better than Cormac McCarthy’s The Road. But these stories usually show civilization surviving because civilization, at its most basic, is simple: we self-organise to help each other. Everything else on top of that, the rules, the morality, the norms are context-sensitive and unique to the circumstances.

But The Walking Dead confuses civilization with modern society, which in some respects is monstrously uncivilised. Would the homeless be better or worse off after a zombie holocaust? In The Walking Dead, civilisation survives only while the traditional ideas of property rights, gender roles, and family relationships survive, because, for the show’s viewers, those things constitute the entirety of our existence.

We know of no other form of civilisation. But we only have this institutional and moral baggage because of society, which must reinforce these assumptions to capitalise on them for the benefit of the many, even if it is to the detriment of the few. Yet if the few are all that remains, does it make sense to keep carrying that baggage?

If society collapsed, civilisation might be better served by abandoning these ideas. In fact, a scenario like the one depicted in this show – in which the social order collapses but society’s collective knowledge is still retained – might call for an entirely new set of ideas, ones that turn the small population, the vast stores of knowledge, the complete absence of central authority and the consumer society into advantages.

Yes, the dead walk the earth, hungry for the flesh of the living. But look on the bright side, nothing has to change.

Wednesday, 13 December 2017

The obsessive worry

Everything you need to know about how the system sees you is expressed in its purest way in ads. I know this is a very unpopular thing to say, but if you find yourself wanting to be bad because everyone else gets away with it, then the problem isn't everyone else, the problem is you.

The word "fetish" is always followed by "disavowal." Speaking generally and defining fetish as sexually necessary, not merely a strong preference, the problem with fetishes is that they are replacements for the person. They are replacements for the thing-in-itself.

An example is a 40-year-old woman who looks in the mirror and decides that her entire sexuality is in a single special part of her, say, her butt, so she diets to make the butt look good at the expense of bony shoulders and a gaunt face. She's fetishised her butt. The point of fetish-ising is to be able to ignore the rest of reality. Hence the disavowal.

Men sometimes do the same to their spouses, empowering a single body part with all of the sexuality. So looking at the calf or the hip bone doesn't simply remind him of the 20-year-old version of his wife, it becomes the fetish that replaces the long-gone version. This isn't illusion or delusion. He is not imagining what his wife looked like when she was 20. That single body part is enough to generate arousal without needing to become aroused by the rest of her.

Any fetish (specific kind of shoe, or a foot, or a piece of lace) is entirely sufficient to generate arousal. This doesn't make the woman look more sexual, it replaces the woman. The problem is that now neither the 20-year-old version nor the 40-year-old version is necessary.

A common sign of this happening is when a man seems to be completely besotted by his girlfriend, "she turns me on so much." He seems to want her all the time. The woman will take this personally, thinking "wow, he really likes me. He really makes me feel good about myself, my body." What she doesn't see is the huge sexual energy for "her" is really about the fetishised her, not actual her. In such cases, love for a person is separate from lust for a person.

It's not the fetish that's the pathology, but what it means that might be the pathology. A person could have a foot fetish which acts as a coping strategy for a decade of sexual abuse and it’s the fetish that keeps him together and balanced. Is that bad? And what happens if his wife stops playing along with the foot fetish? He will go elsewhere to satisfy it because that's the only way he can discharge the energy.

Objectification, on the other hand, is about becoming a practically inanimate object. When choosing a second-hand coffee table, a customer might request the dimensions, age and a brief description of the object. Same thing with soft-core pornography. Objectification is the process by which a thing is reduced to its utility alone. But describing a thing by its physical characteristics is not objectification.

What makes pornography objectification is that it is used. Using heterosexual porn, the woman or the scene is used to arouse and ultimately sexually gratify the user. It is used to help bridge the gap between the reality (watching something on TV or computer) and the fantasy (having actual sex with an actual human). The woman is objectified because, for the user, she literally has no other facets other than her utility for sexual gratification. And incidentally, straight guys are also objectifying the men in those scenes as well.

However, pornography is almost the sole instance where objectification doesn't lead to frustration and alienation that leads to violence. There is a real physical reaction to pornography experienced by the viewer – it isn't simulated orgasm, it's actual orgasm.

Where objectification becomes a problem is everywhere else. Maxim or the Sports Illustrated Swimsuit Edition are more dangerous than hardcore porn because they are teases, and teasing is accomplished a) in the presence of an asymmetric power dynamic, and b) by revealing to the viewer they are the weaker part of that dynamic. In this way, teasing functions as advertising. You can look at her, but you can't have her. You have stripped of her ordinary humanity and forced her to be a symbol of value.

So, in that context, it isn't surprising some guys want to steal what they can't otherwise get. Hence the phenomenon of rape. But look at the objectification here. Sex, or the girl, is something you get. You get oral sex, or you get to second base, etc. This is the language of acquisition, of commodities. The sex appeal in marketing is nothing less than the fetishisation of women and their primary sexual characteristics. That is objectification. The reduction of sex to yet another resource to exploit.

Where all pornography diverges from reality is in its frame, in the construction of all pornographic sex acts as requiring a viewer. And all pornography turns its viewers into voyeurs. Pornography is sex fetishised, in which the sex act itself is objectified. But pornography, by breaching the line from reality to fantasy doesn’t lead to a frustrated consumer of sex the same way that "sex appeal" in mass media does.

Money is a fetish of value and not actual value. Facebook is a fetish of relationships not actual relationships. The system pivots on this stuff. Ads do not try to sell you a product. The product is irrelevant. If the ad successfully plugs into social fetishes, you will consequently want the product no matter what it is.

At heart, the problem is that women still secretly believe they are inferior to men, and men still have this haunting suspicion that their true worth – “in other people's minds" – is signalled by a women's opinions of them. After all, money, jobs – all that is fake. Hence the need for something to redefine masculinity, to make it real. Which is why both sexes reach for the fetish to replace the lack.

The important point is not that you believe this to be true, the point is that you want this to be true. Stop letting the system tell you who you are.

Sunday, 10 December 2017

Re-framing fake news and Bitcoin madness

Alternative currencies like Bitcoin continue to zoom as confidence in the stability of the global system declines.

Of course, I could be wrong and this daily drumbeat of suicidal rage is simply the new normal. Since I don't see any solid countervailing cultural, sociological and economic forces emerging, this crisis will continue to worsen. My gut tells me there's an existential crisis underway in the West, far deeper and scarier than Trump (he's just a symptom) or Bitcoin. And boy oh boy, is Bitcoin a polarising subject.

Hold onto your hats people, I'm jumping in.


First, it’s slow. The blockchain is nowhere near where it needs to be in regards to transactions. It should be hitting <10 per second. Right now, it completes approximately seven transactions per second. By comparison, Visa does 47,000 transactions per second. And because of this sluggishness, they're already charging extra fees so people can jump to the front of the line. That's not a good precedent to set so early on.

Second, if the price declines so much that mining isn't worth the price of electricity, the entire network could collapse and it's back to the gutter for all the "investors." If you think Bitcoin is a good investment at this point, I have some virtual bridges to sell you.

Third, it is doubtful Bitcoin will replace paper currency, but it could co-exist. It’s a $175 billion asset right now and it will be more difficult to ban when it becomes $1 trillion. It could become a store of value if more participants join and it increases its liquidity. My only concern is people could lose faith in the concept if the price drops severely.

Hopefully, Bitcoin hoarders start to behave like liquidity providers instead of trying to make a quick buck. Because at present almost everyone who is buying and holding Bitcoin is doing so purely because they expect to be able to sell it later at a higher price. That's not good if it's supposed to replace money.


But the big thing for me is the particularly annoying internet subculture.

You know them. They're like the (mostly) guys at a party who start spouting off about "The Fed" and "fractional reserve banking" as if they stayed awake for half the economics 101 lecture. At some point, they drop the word "fiat" when referencing money, like a codeword for other "woke" pseudo-adults.

These Bitcoin types are often conspiracy theorists in every other area of life too. When Bitcoin got to $700, people wondered what was happening (and I kept hearing “Venezuela!!”). Now that it’s at $17,000, these types refuse to even discuss the strangeness. The idea that the US Federal Reserve is out to get you but some unknowable group of dark web hackers is looking out for your best interests seems a little hypocritical to me. It smacks of my team/your team, which I thought the libertarian, digital socialists wanted to fix.

It's even more hypocritical because Bitcoin and offshore bank accounts have a lot in common in terms of the evasion of laws. They're at once concerned about offshore bank accounts being used to evade taxes while defending those very offshore bank accounts because they allow them to store their billions out of the reach of the countries from which they acquired their billions.

It’s also suspicious that the person who founded Bitcoin, ‘Satoshi Nakamoto,’ reportedly has a stash of 1 million inactive bitcoins (worth over $10 billion by today's prices) and that no one knows who that person is, or if it is a group.


Plus, there’s a finite supply of Bitcoins (21 million) and the supply is running out. Currently, about 80% have been mined. What happens when the last one is mined? Does the value go to infinity (= cost of mining new ones) or zero?

It seems unlikely the price will go up forever. There aren’t many fundamentals to drive it up. You can point to the value of gold, but gold actually has uses outside of money (jewellery, electronics, etc) and more importantly, it’s been a store of wealth for ages. It’s imminently tradeable anywhere and at any time.

Everyone knows what gold is and why it has a place in our world of the perceived value of relatively useless non-income producing assets. But 99% of people playing with Bitcoin know nothing about cryptography or the scaling issues. Gold is a fully-informed price. Bitcoin is a just people passing along a buzzword.

Bitcoin is a financial tool and has value only when it’s useful for that purpose. The sign of a bubble is when the ratio of use to speculative appreciation gets out of whack. That ratio certainly varies for different types of goods, but it seems extreme in the case of Bitcoins. So now that Bitcoin is worth $20k, does it still serve the purpose of being a financial tool? Doubtful. And what about all the other cryptocurrencies? A stable long-run value for Bitcoin cannot coexist with an infinitely elastic supply of Bitcoin-like assets, and there are hundreds of these things. Does anything limit the supply of Bitcoin-like assets?

At least gold is the only gold-like substance (silver is a pale imitator). And art is considered a store of value as well because you can display it and accrue prestige. So unless the super-rich start having gaudy displays of Bitcoin (how would this even work?), I don’t see how people will just “agree” that it’s a store of value.

In one sense art collecting is a bit like Bitcoin. In art collecting, you have to ‘mine’ value by attending auctions or shows to buy unknown artists at low prices in the hopes you’ll get a ‘coin’ - which is the equivalent of an artist turning out to be very collectable. Those established ‘coins’ go up in price as people opt to use the specific art as a store of wealth. Maybe Bitcoin is just a type of ‘number art’ where your artwork is a string of digits. The advantage is that Bitcoin has a chain of custody so it’s almost impossible to pass off forgeries.

The principle of gold is that you buy it, you put it in a vault somewhere and when you take it out again, it has roughly the same value as when you put it in. That’s not true in practice, but it’s kind of true, and historically there were very few competitors to gold. Nowadays, gold is less appealing because there are other competitors to being a risk-free long-term value storage. For instance, US Treasuries.


It's also fairly well-known that a large percentage of Bitcoin mining efforts happen within China - between 70-80%, apparently. Has anybody asked if the Chinese are mining the cryptocurrency on government electricity and selling it to each other to inflate the price?

The three largest miners in China make up more than half of the mining power, which leads to the possibility of a Sybil attack. However, that has nothing to do with the price, because the amount of Bitcoin “minted” by miners is pre-determined, and it’s just a matter of which miners get it: Therefore, the ownership of the miners shouldn’t affect the price by itself. But it's still pretty weird.

Bitcoin mining in China
What if Bitcoin’s core “activity” is to convert cheap Chinese coal into US dollars outside of China? That’s not such a good thing to bet on, as a market/asset/whatever. And if the Chinese are doing this much mining, at which point do we consider Bitcoin to be an extension of the Chinese government? Bitcoin looks to be a shadow of the shadow banking in China. I also wonder how much North Korea is involved in all this.

Bitcoin is subject to a 51% attack by the Chinese government when it nationalises/confiscates the mines. This is inevitable. They couldn't “steal” Bitcoin because executing the attack makes Bitcoin worthless. But it can say, “we’re filling a vault with huge amounts of cash. Then we’re going to set the contents on fire to punish the people who put the money in the vault, or cause some general havoc from which we can benefit.”

It certainly has the incentives. Beijing wants to destroy the wealth gained by people who sneaked the coal out of the country? Check. Beijing wants to impose an exogenous financial catastrophe on the rest of the world? Check. Beijing is racing to build quantum computers, which it could use to empty people's e-wallets? Check. And does anyone think Bitcoin will retain its value when the CCCP starts shooting money launderers? After all, it isn't very anonymous.

(It could be Chinese government employees using Bitcoin to move their ill-gotten assets overseas. The anti-corruption purge by President Xi Jinping certainly spooked a lot of people, so if that's part of what's happening, then the clamp-down might not be so inevitable. But that's a big if.)

Throwing people into jail works very well on technological problems. So if Bitcoin’s price is just a reflection of the tight funnel applied to Chinese and Russian millionaires who want to get their money out of their respective countries, when they figure out a different avenue, Bitcoin's price will collapse back to $200.


Then again, cryptocurrencies started at zero and will probably end up with a price greater than zero in the long run. There is no way for the journey from point A to point B to not look a lot like a bubble.

Someday they’ll invent a term to describe this sort of situation. For those interested in history, 'Extraordinary Popular Delusions and the Madness of Crowds’ by Charles Mackay is considered pretty much the definitive historical overview.

Just think how many tulip bulbs or South Sea Company certificates you can buy with just a fraction of a Bitcoin! You can buy even more next week, next month, next year or next decade! Buy Bitcoin now, before the price becomes unaffordable, and you miss out on the biggest opportunity since the Mississippi Company!

One big difference between tulip mania and Bitcoin is how wealthy the uneducated class is in 2017. The West has never been dumber and wealthier. At least in Holland, only a few percent of people even had any wealth, and they tended to be quite educated.

Speaking of educated people, Isaac Newton probably would have bought Bitcoin too, so don't feel dumb. In the spring of 1720, he owned shares in the South Sea Company, the hottest stock in England. Sensing the market was getting out of hand, the physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people.’

Sir Isaac dumped his South Sea shares, pocketing a 100% profit totalling £7,000. But just months later, swept up in the wild enthusiasm of the market, he dipped back in at a much higher price and lost £20,000 (the equivalent of £2,743,000 today). For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.

But tulips aside, I don't think Bitcoin isn’t a bubble. It doesn’t rise to that high of a standard. Assets – things that have value – have value for a reason. A currency has government backing which needs to maintain financial credibility. Homes have usage value. Corporate goodwill promises future earnings growth and dividends. Bitcoin has nothing behind it and only a shadow of value in front of it: the hope that someone else might need an underground currency more than you do and will pay for the privilege.

It’s a currency supported by the needs of marginally and not-so-marginally illegal market participants. Not much else there.


Some people are also pointing out the appaling environmental impact of Bitcoin.

The electricity required to process transactions must constantly grow to offset technology gains in mining. At current rates of electricity consumption, the projection is that mining will consume the entire planet’s electricity supply in five years. Obviously, that’s not gonna happen.

And it's a little unfair anyway. Has anyone done a comparative study of the energy use of Bitcoin versus "traditional" currencies, specifically ones used globally such as the US dollar? The energy consumption of Bitcoin only seems unusually large because it is intrinsically tied to a growing network of physical computers. Plus, it's the "bad guy" in this power play.

While Bitcoin's usage is obvious, we tend not to think about the energy costs of digital currency in general. But traditional currencies are just as much dependent upon the use of computers around the world for record keeping and financial transactions, and also have the added consumption of paper money and coinage - which use exceptional material resources.

Bitcoin, at the present time, does not have a widely used printed mechanism for exchange. I wouldn't be surprised if the global distribution of dollars, both in paper and global financial record-keeping, uses just as much if not more energy as the blockchain.

That's to say nothing about the storage capacity needed. Bitcoin's technology, called “distributed ledger,” is an ever-expanding computer code. This technology is based on a hope that computer technology will keep up with a pace of growth of the distributed ledger.

Unlike ordinary software, where developers can keep it small in case hardware doesn’t advance fast enough, the growth of a distributed ledger is uncontrollable. It balloons with every transaction. It's like a rocket scientist using an unknown material and saying: “Let’s hope it will last.” In fact, Mr Nakamoto wrote in his famous white paper: “storage should not be a problem.” Really? Are you sure about that? We're quickly reaching the limits of microchip miniaturisation, to say the least.


You can make reproductions of paintings easily and inexpensively, but the reproduction will never be the original, even if the difference exists only as an awareness by the owner.

Bitcoin has the legacies of being the first, the crazy history of Satoshi Nakamoto, the stories of the lost hard drives worth millions and the billion dollar pizza. You can clone Bitcoin, but the clone isn’t Bitcoin. Humans are hard-wired storytellers. A centuries-old gold ring owned by a queen is a story worth more than the sum of metal, gems and workmanship. Bitcoin’s story is the lion’s share of its value, and it’s one hell of a story. If you have the means, you can own a piece of that story. That's pretty fun.

Bitcoin seems no different from any other speculative investment, and may well be the premier speculative investment. It is a new asset class that will eventually reach an equilibrium with other stores of wealth. Bullion and the paper cash of reserve currencies seem to be the most appropriate assets to compare it to – scarce, global, fungible, divisible, counterfeit-resistant, etc.

But it's not quite a form of money yet. All money is not alike. A million Zimbabwe dollars are not equivalent to a million US dollars, whereas commodities like gold, copper, and hardwood lumber are fungible. Money seems to derive value from the fact that enough people accept it in trade over time. But that seems kind of superficial and circular, so we have to check the fundamentals: a stable civil order, high productivity, large, liquid market and relative scarcity. What are the underlying fundamentals of Bitcoin?


People say the Bitcoin bubble inevitably will burst. Defenders say, so what, even if there is a correction, the correction will be followed by new highs. Defenders have the better case. Economists tend to focus on classical theories of investing, while the real money is made in speculation. The pending tax bills in the US Congress are a cornucopia of opportunity for this kind of speculative investing.

We are all speculators now. Me? I’m in the tulip market. If the market bursts, at least I can use them to decorate my backyard.