Saturday, February 27, 2021
Cryptocurrency is fantasy money.
Yes, I know that all money is fantasy money.
But money is based on a belief system and that's why we put pictures of our national heroes on the money. So we have an image to believe in. And that's why we put 'In God We Trust' on our US currency. Because God is one of the earliest superheroes.
So when I say that it's fantasy money. I mean that it's like trading Picassos. Regular people don't buy and sell Picassos. Nobody goes to the store with a Picasso to buy a loaf of bread: "Go ahead and slice off $4 worth of Picasso. But not the nose."
Currency is used to pay debts: corporate debt, personal debt, and national debt.
It's fantasy money because its value fluctuates wildly based on the whims of collectors. And you cannot have a national currency that behaves that way.
If I pay my workers every Friday and then my currency fluctuates 200% over the weekend before they cash their checks, either I'm going out of business or my workers will starve. I need a stable currency. That's why if you invest in cryptocurrencies because you think you will get rich, then that currency can never be a standard for paying off debt.
You need something stable that we can use to pay bills. And then you can pay those bills and we all know that the money we used has basically the same value across all of those payments. Otherwise people will hoard that currency or they will dump that currency. Because no one knows what it's going to do from one minute to the next.
And then your fantasy world collapses.