This–to me–brilliant and eloquent article from Bloomberg Crypto is called “bitcoin is ridiculous” and you can read the whole thing at this link: bitcoin
Here are some of his observations (for once I have nothing to add):
“The way you monetize vast swaths of humanity is by creating products that people use a lot—perhaps a search engine such as Google or a social network like Facebook. You build big transactional web platforms beneath them that provide amazing things, like search results or news feeds ranked by relevance, and then beneath all that you build marketplaces for advertising—a true moneymaking machine. If you happen to create an honest-to-god marketplace, you can get unbelievably rich.
“In the past, building a market required users, products, all that mess—farmers taking their plump pigs to market. What we have now is a means of spinning up any number of auctions, a method for the mass manufacture of middlemen. This is the destiny of Silicon Valley. And with ICOs and Bitcoin exchanges, we have a marketplace to value marketplaces. What in Galt’s name could be wrong with that? We’ve never (surveys vast tracts of empty Florida homes) had trouble before.
“America understands new abstractions by financializing them. It’s how our culture absorbs information. Taxicabs, spare bedrooms, public education—we see markets everywhere. Bitcoin and the blockchain came prefinancialized, intended as a replacement for central banking. But what if the most important thing the blockchain offers isn’t a replacement for money but a new way to build culture?
“Acquiring Bitcoin is like using an ATM, except instead of government-backed money you get proof that a computer somewhere solved an automated puzzle faster than other computers, and instead of using an ATM card you’re using an auto-generated token that only you have, and instead of connecting to a bank you’re connecting to a decentralized network of computers that collectively maintain and update copies of a massive historical database of transactions—and that also collectively validate transactions, using, well, math, and spit out new Bitcoins from time to time, to reward the puzzle solvers.
“Slow exhale. Almost there. And instead of buying a six-pack from someone behind a counter, you’re transferring some amount of Bitcoin to another anonymous token. Over time, all the transactions that people make get lumped into blocks and validated, and they get a special code that takes into account all the codes in the blocks that came before, and thus you have it: a blockchain. According to Bitcoin.org, the Bitcoin blockchain is about 145 gigabytes, though it will be bigger by the time you read this. You can download the whole thing, the entire portrait of the Bitcoin economy, onto a USB drive.
“That all of this adds up to money is ridiculous, and we should probably mock it more than we do. Consider Bitcoin a grand middle finger. It’s a prank, almost a parody of the global financial system, that turned into a bubble. “You plutocrats of Davos may think you control the global money supply,” the pranksters seem to say. “But humans will make an economy out of anything. Even this!” To be frank, central banking never really ground my gears; it’s just another one of those vast enterprises that we cower beneath, like network TV or religion. But I can see how it would piss people off. Bits gonna coin.
“Bubbles are melancholy things—swirls of lies and optimism used to hide a million unrealized yearnings. Bitcoin will crash because of course it will. Bubbles burst. The real estate and athletics management people go home, and the believers remain, meeting up, planning new markets. It could take years, it could take a decade, but the blockchain freaks have a world in their heads, and they won’t rest until it’s real. That the rest of us live here, too, is the least of their concerns. Some of the things they’ll do will be magical, community-building, economically thrilling. Others may keep us up at night.
“Still, I can’t help but look on in envy. Not for the believers’ possible wealth, because that will elude most. (Even in a distributed money platform, wealth has a way of finding only a few pockets.) I’m jealous that they’ll experience it all: the crash, the rejection, and then the slow rebuild as they learn the difference between toys and tools. They get to participate in the screaming edge of culture.”