Crypto-just say no!- why crypto has no value

When I lived in Bend Oregon in the early 80’s a woman talked to me about how I could make some money. She was involved with a company that sold products containing bee pollen. The “members” purchased trays with something that attracted bees and made them pollinate in the tray. Then they would collect the pollen, carefully scraping a glass slide, put it in a vial and send it in. A week later they had their check!

The more they collected and the more people they recruited the more they made. A few months later I ran into her, and she told me the whole thing had shut down. It turns out the company was just throwing away the bee pollen when they got it. It was just a device to make people think they were selling a legitimate product. It was just a classic Ponzi scheme paying out the money from the sale of trays to people as income. As you might suspect, the products contained no bee pollen.

Crypto sounds a lot like that. They make an object that has no intrinsic value. they could sell you a toilet plunger and run the scam on toilet plungers being scarce and desirable with all kinds of unknown attributes. Except people wouldn’t buy the toilet plungers. So they make it extremely complicated and take great pains to make it un-understandable for 99% of the people of who I am still one as well as just about everyone who buys crypto. Why is Bitcoin valueless? This coin which has no utility, no valuable materials in the coin, and no value or appreciation from anything other than the next person being willing to pay you more for your crypto than you did. Then you make a “profit.” This is called the “greater fool theory,” by people in the investment world, usually referring to gold.

Let’s say they shut down the stock exchanges. What would happen? You can sell your shares back to the company or another investor as you have ownership in a company. If gold dealers shut down you could negotiate to sell it to jewelry makers or individuals. If Bitcoin exchanges shut down, who would want it? No one. No one is pumping them up to buy a fake asset and there is no liquidity and no hype. This is the part that reminds me of bee pollen. All the activity around Bitcoin is to make it sound valuable. I have had this discussion with many crypto pod people and they all say the same thing. I ask, “what value does it have?” “It has value due to demand!” To that I say “Bingo. Why is there demand?” “Because people think it will go up!” You can’t win a circular argument with a cult member, so I stop.

Bitcoin is created by “miners” who grind away on calculations trying to solve them for days, then someone else may solve it before them and the grinding continues, eating up the electricity of a small town for a year to produce one Bitcoin. When they solve it they get a huge payout, about 6 Bitcoin. That is currently worth about $160,000. So this whole thing is like the bee pollen. Make people think they are doing something of value. They are not. Their work does nothing but create more Bitcoin for people to buy. The solved calculations have no value to society, math or science.

Almost nothing is purchased with Crypto

I said that Bitcoin had no utility, meaning it is not used for anything. But what about people using it to buy and sell goods and services? This has essentially never happened. It has been a myth since day one, part of the story. The two biggest retailers, Walmart and Amazon do not accept it. China does not take it or let people use it. Governments don’t take it. There are a few purchases here and there. The top 10 retailers, Walmart, Amazon, Costco, Kroger, Home Depot, Target, CVS, Walgreens, Lowes and Albertsons, account for 1.66 trillion in sales. None of them accept Crypto. The next 90 in the top 100 do 900 billion in sales. The top 100 accounts for about 80% of all retail in the US. In the top 100 companies I could not find one that took crypto. You cannot google “What retailers don’t accept crypto.” 99% of all retail in the US would be a good guess.

Bitcoin tries to make it sound like they are growing in “transactions,” which number about 280,000 per day! The “transactions” are to pay for fees on exchanges and a multitude of other costs related to crypto. Remember, while Bitcoin and Ethereum are by far the biggest, there are 22,000 plus other crypto tokens to buy. There are 1,000’s of different fees involved in this mess.

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900 gambling sites have sprung up taking only crypto. And when you win, you win more crypto. The odds are bad and the payouts are generally low. They are also not regulated. Like all Casinos, you can’t win. You only lose over time. They are popular, because a lot of people who buy Bitcoin want to use it for something. So they buy more crypto or pay fees or gamble. Those are the uses that they claim millions of transactions per day from. There are also online stores who sell overpriced goods and take only crypto. See Crypto Emporium.

“Experts” advise people to keep their coins in a “digital wallet,” not the exchanges

This can be used to buy things, like more crypto mainly. Another big reason people don’t purchase with crypto is the incredible amount of risk and hassle you have holding your own crypto in a digital wallet. If you lose the wallet, it is gone. There are key codes you need to save or remember. They are over 100 digits long. You may be able to retrieve it with these codes. It is not something you can casually do in the kitchen while making dinner. Perhaps the biggest reason no one uses it may be that every time you buy anything from a candy bar to boat, you create a taxable event, and you must track those yourself.

If you own $10,000 in Bitcoin and spend it 10 times over a month, those 10 transactions will be done with the Bitcoin having a different value each time. When you buy a thing, anything, you will have a loss or a gain relative to your cost basis in the Bitcoin. No one talks about this. For this reason alone it will never be popular for buying day to day items.

See you soon,