So let's talk about another quintessentially American activity. Over-spending. Did you go to a store on Friday? Physical or otherwise? Are you planning to spend some money at any web retailers tomorrow? The term "Black Friday," of course, comes from the fact that so many retailers make enough of their yearly profits on the day after Thanksgiving that it is the day that puts them "in the black" for the year. Holiday shopping, bargain-hunting for ourselves, and such. We're weird. I don't go to stores. I hate stores. I'll admit to buying a few things that I had been waiting to go on sale from a carefully curated list, but if even I shop on Black Friday and Cyber-Monday, it's a thing. What did I get? Not tellin'.
Now, here's the question. If you went to a store on Friday, did any of them turn you away for lack of bitcoin? Did any of them say, we don't accept dollars here? For any of the stores you plan to visit on-line tomorrow, are they going to demand payment in bitcoin, and decline your transactions otherwise?
No.
Because bitcoin is still bullshit.
I had some fun with this a while back, and wrote a series called "Bitcoin is bullshit." Here's the wrap-up post, which gives you the executive summary. It also has the links to every individual post, if you want to read the whole series, and haven't. Bitcoin is still bullshit.
First, what has happened to bitcoin since that wrap-up post? I wrote that back in January. Wanna see what market prices are for bitcoin now? CNBC now lists cryptocurrency market prices. Why? Because people want to know. Hell, even I want to know, just to point and laugh at the idiots buying bitcoin. Short version: bitcoin has been crashing. Hard. It fell below $4,000. This after a peak of near $20,000.
Bitcoin is stupid, in a way that is perfectly suited to a post between Black Friday and Cyber-Monday. You can't do anything with it except sell it to other people who hope to sell it to other people who... You can't fucking buy anything with it except the credulity of fools who let themselves get taken in with pyramid schemes like bitcoin. And that's my point for the morning. Bitcoin crashed hard leading up to Black Friday/Cyber-Monday in a perfect display of consumer principles because it is a currency that you can't use to buy anything, and as I argued in the very first post in the series, even when the price of bitcoin was rising, that very rise made it useless as currency because nobody who held bitcoin would be acting rationally by spending it. A currency needs to have stable value to be useful as currency. Bitcoin is not, never was, and may never be stable. That makes it useless as currency, and since it cannot have any other use, it is completely useless. There are arguments to be made about the potential uses of blockchain for purposes other than cryptocurrency, but bitcoin itself? Useless.
Observe-- are you using it? Do you expect to use it? Would a store accept it as payment when it lost a quarter of its value over the last week? Keep in mind that the last question is about a phenomenon that happens semi-regularly with this idiotic thing that has no reason for existing.
And that brings me to my next point. Inflation. Bitcoin-bugs pose their cryptocurrency as a solution to inflation, but losing 25% of its value in a week? That's called inflation, folks! A fuckload of it! The price of goods, in bitcoin, just went way up. You know how people whined about the Fed when they increased the money supply and inflation and blah, fucking, blah? Hyper-inflation was right around the corner, right? Bitcoin can't inflate because the supply is constrained and yadda-yadda-yadda. This is the kind of crap you get from bitcoin-bugs. In a little place I like to call "reality," though, bitcoin is experiencing a shit-ton of inflation. Because bitcoin is bullshit. The US dollar? Stable. Why? Monetary policy. Oh, and our Dipshit in Chief is pissed at Steve Mnuchin for pushing Jerome Powell, but appointing Powell is about the only sane thing Trump has ever done as President. OK, he should have reappointed Yellen, but at least he didn't appoint Taylor, or some wack-job. Point being, monetary policy works. Bitcoin doesn't. Otherwise, bitcoin wouldn't lose a quarter of its value in a week. That's more inflation than I want in my currency, thank you very much.
This ain't hard, folks. You get paid in dollars because your employer gets paid in dollars. In order to pay for anything in bitcoin, you would have to pay transaction costs to convert your dollars to bitcoin, and there is no reason for you to do that if the merchant accepts dollars, as all merchants must do if they pay their taxes, because they have to pay their taxes in dollars. The government doesn't, and never will accept tax payments in anything other than dollars. So, they're going to take dollars for whatever you buy, making a conversion to bitcoin a stupid, pointless and costly conversion for all involved. So it is, and so it always shall be, unless the state collapses anyway, in which case we're just fucked regardless of any debates over cryptocurrency. Countries where people use currencies other than that issued by their own government are basically failed states. In The Diamond Age, Neal Stephenson wrote from the perspective of 1995, and posited that the development of the internet would conceal financial transactions from tax collectors, and thereby bring about the fall of nation-states. Not quite. Instead, the necessity of preserving nation-states will prevent the rise of cryptocurrencies because the government can and will continue to audit banks and other financial records.
Or, you could go convert a bunch of your dollars to bitcoin and try to spend them tomorrow on those Cyber-Monday sales. Good luck with that, Homer.