I think the answer here is obvious.
In a couple of months, that $150m of Bitcoin trapped in the guy's wallet, will only be worth a thousand bucks or so.
People will care less then.
You may not be aware that if you store your most valuable items (including any bundles of cash) in a safety deposit box, and you *DON'T* leave specific, legally authorised instructions on what happens to the contents in the event of your death...
...Those items too will be lost to perpetuity.
But I think you’re all getting way too distracted by Bitcoin.
It is Blockchain Technology as a whole that you should be focussing on, and the implications the uptake of Blockchain has for the way human beings manage their Economies.
Y’all know that all major currencies are fiat
currencies, having a perceived value, only because the Government that issues it says it has value, and we all agree with that Government.
And that there has been no convertibility between cash and any particular commodity (e.g. gold), since President Nixon unilaterally terminated the Bretton Woods Agreement in 1971.
Because I’ve banged on about that for long enough.
But there is another consequence of using a fiat
currency that I don’t think I’ve discussed before.
When a currency is directly convertible into a fixed commodity, like gold for example, then the total amount of currency in circulation will be limited by the amount of that commodity possessed.
E.g. if you only have £1 billion of gold bullion in your vaults, then you can only have promissory notes (“to pay the bearer on demand…”) up to a total value of £1 billion in circulation.
If you need to get more currency circulating in your economy, then you need to buy or borrow more gold.
But if you don’t have to ever worry about people trying to convert those bits of paper you give them, into something that has actual value…
…You can just keep on increasing the amount of money circulating in your Economy, as you see fit.
Oh… But what about Currency Inflation / Hyper-Inflation, if you print too much money..?
That’s okay. Inflation only becomes a problem when too many people have too much cash.
But provided you can ensure that only a very small fraction of people receive the extra cash you create in the Economy, Inflation won’t be a problem.
It’s only when *EVERYONE* has so much cash they have to cart it around in wheelbarrows, that Inflation is a problem. If it’s just 1% or less of the population that is receiving all the extra cash you are creating, keeping inflation in check isn’t a problem (“Trickle-Down”/”Supply-Side” Economic Theory is a bust).
And what’s the easiest way to ensure that only a very small fraction of people get the new cash you create?Give the power to make new cash to that very small fraction of people.
They’ll create as much new money as they feel they need; and they’ll mostly sit on it, because it actually gets quite difficult to spend money, when you’ve already bought everything you ever desired.
Only problem of course, is for the rest of your Society, because you then get *MASSIVE* and inexorably increasing Wealth Inequality.
Because the money is not tied to any finitely-available commodity.
But the 99% seem content to suffer in silence about that… So nay bother!
When the idea of using Blockchain technology to create currencies based on a distributed ledger
, nobody ever thought about connecting those currencies to anything… Worthwhile.
There *WAS* the idea that the amount of electricity consumed in generating a unit of Blockchain currency represented the implicit or retained value… But it’s easy enough to steal electricity, just as it’s easy enough to hijack processor power from remote computers.
But in terms of “backing” a currency like Bitcoin with anything tangible or convertible, never really came up.
And so what Bitcoin, Ethereum and other animals became, were not actual currencies used for the Exchange of Value, but rather, pseudo-commodities, used for speculative trading (gambling).
And that’s all that Bitcoin & other “Crypto-Currencies” really are: units of account in a Global Gambling Syndicate. And because they are not tied to anything tangible, it is quite straightforward for National Governments with their own fiat
currencies, to keep the Exchange price of such currencies, highly volatile (pour encourager les autres
Meanwhile…Initial Coin Offerings
are starting to replace “Initial Public Offerings” (IPOs). With the block-chain “Token” created by the start-up replacing an initial issue of shares. If the start-up is successful, then the value of the blockchain “Token” goes up, just as a share price goes up when a business performs well.
And critically, the blockchain token *IS* backed by the value retained in the enterprise that issued it.
Banks are creating their own Blockchain currencies.
Initially, these Bank-issued Blockchain “units” will likely be given in the form of “Reward Points”, like Airmiles, or store loyalty points. And when customers have built up sufficient quantities, they can “spend” them on consumer goods, store vouchers, city-breaks &c.
But in time… Bank customers will be encouraged to use their accumulated Blockchain “reward points”, to carry out transactions with other customers of the same bank, using the bank’s Blockchain currency.
The Bank’s Blockchain currency will then be backed not just by the assets of the Bank, but effectively by the combined assets of all its customers as well. And so long as those customers continue to trust the Bank, they will continue to trust the Bank’s currency.
The main reason (best as I can tell) that Venezuela is getting it in the neck from the U.S. today, is that it threatened to issue a Blockchain currency that was backed by its Oil Reserves.
When you buy a Venezuelan Bolicoin, you are actually buying a fractional share of Venezuela’s vast oil wealth. And *THAT* is what you would actually be using as a medium to exchange value: your part ownership of Venezuela’s oil.
Of course, you won’t want to be keeping that oil in your own home, and mailing people sachets of it, when you’ve just bought a second-hand bike from Ebay.
No. You’ll be using a notional representation of that oil, in the form of the Blockchain currency backed by it.
The price of oil fluctuates, of course, just as the price of gold does. So the value of your Venezuelan Bolicoin will fluctuate.
But the good news there is that if energy prices do climb, so will your net worth, and the value of your Venezuelan Bolicoin, so you’ll be able to afford the higher prices.
And if energy prices drop, along with the value of your Bolicoin, well that’s okay too, because you’ll need less money to spend on your own energy needs.
And most importantly of all…
Instead of limitless amounts of money being printed by the Venezuelan Central Bank (or some artificial limit imposed on the maximum amount of Blockchain units that will eventually be made), the amount of money the Venezuelan Government can issue, will be limited by the amount of oil it has.
Which should keep things a bit more stable than they currently are.
And of course, by reverting to a “hard currency”, Venezuela will attract a *LOT* of Foreign Capital.
And that would really upset the Apple Cart.
In summary then:
First human beings used barter to exchange value.
Then they used a tangible commodity like gold or silver.
Then they used coins that were made of those metals ([url= https://en.wikipedia.org/wiki/Methods_o ... debasement
]until everyone started stealing them, melting them down, “clipping” and generally reducing the amount of precious metal actually in the coin…).
Then they used “Promissory Notes” to make transactions more practical.
Then they discarded the connection between a currency and any tangible asset.
Then they came up with a new technology-based currency, that also had no connection with any tangible asset.
And next, they’ll back the new technology-based currencies with tangible assets, in order to set the limit on the amount of currency in circulation, and eliminate the opportunity for currency speculation and predation.
This will in turn destroy the Economic foundations of all National Political entities in the World.
And it will prohibit the kind of currency expansion we have seen since 1971, which has created the increasingly destabilising and totally unsustainable levels of Wealth Inequality in the Human World.
All good then.