Don’t buy a bitcoin

Don’t buy a bitcoin. In fact don’t buy any cryptocurrency. They are not really worth anything, at least that is what the financial institutions are telling us. They are not like gold, or any other commodity, that is tangible. You can’t hold a bitcoin in your hand or feel it rattle in your pocket as you walk along. They are just vapour and anyone who has invested in them, for whatever reason, is going to come a cropper one of these days.

In the words of Christine Keeler, ‘they would say that wouldn’t they.’ The banks and other financial institutions, in which I also include national governments, are doing all they can quietly to undermine the alternative to hard and FIAT currencies. It is in their interest as in many ways, cryptocurrencies are beyond their control.

Yet to claim that there is nothing supporting these emerging forms of money is ludicrous. Their claims are obviously meant to make us think that the money we are more used to is more real in that it is underpinned with a pot of gold but this argument falls apart on two counts. Firstly the amount of the precious metal in the world is not sufficient to guarantee the amount of money in circulation. Secondly, and perhaps more importantly, while gold has many useful applications, its value is only a perceived one. People pay a lot of money for gold because it is perceived to be rare and beautiful and, therefore, of value.

In other words, the price of gold is maintained by demand and the value of money is maintained through a system of trust. The price of gold differs from the value of currencies on a daily basis. We give and receive money on the belief that it will retain an equivalent value when we come to use it again, irrespective of whether or not it is tangible or supported by some commodity.

In this way there is no difference with cryptocurrencies which are based entirely on trust. They will retain a value that others perceive them to have. Don’t be fooled into thinking that they are any different from any other form of currency. Apart from the fact that they are outside the control of banks, financial institutions and governments.