What Backs Bitcoin?

First, I want to say that I’m not a fan of the Central Banks.  I would love it if Jamie Dimon and his ilk were hung up from every telephone pole in the nation.

That said, I’m not sure if Bitcoin is the Silver Bullet to kill the behemoth which is the central banking system.

In 2011 I bought Bitcoin for around $71 each.  Fast forward to present day and now everyone knows about Bitcoin and it is featured in the news.

I have used BTC to buy illicit goods from dark markets.  I could use it to buy legal stuff but presently not many vendors sell legal stuff in exchange for BTC.  Furthermore, my debit card handles transactions more efficiently and with more added protections than Bitcoin.  Actually, I’m not sure there are any protections with Bitcoin.  After a while, I realized that personally, Bitcoin is really only good for buying illicit goods or getting through censorship like the debacle with Wikileaks donations.

I am not sure about the intrinsic value of Bitcoin.  Some people would say the network or the math that goes behind processing each transaction.  BTC is using a large amount of electricity.  I am starting to think that the value of Bitcoin is tied to the belief that it will increase in the future.

Some people think that Bitcoin is going to hit $200,000 to $1,000,000 dollars.  Other people like The Dollar Vigilante, the faux-anarchist, believe that is going to result in the end of the Nation State.  My cousin believes that the United States stock market is going to tank to zero and that the only asset worth anything will be Bitcoin.

My point is the value is purely speculative.  I treated this as a gamble and an experiment.  I know that a significant amount of people are investing money they can not afford to lose into this technology.

I am not sure how much Bitcoin is going to be worth in the future.  However, I get really annoyed when I talk to people who “know” the value of Bitcoin in the future.  When they start opening up their mouths it seems like just another pump and dump pyramid scheme that has ever come along.  Talking to these people is like addressing religious fanatics.

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