[NOTE: Re-published with the written consent of the author] A Critical Thinker’s Exposition of Bitcoin
by JS Kim, Smart Knowledge U:
As it stands right now, in August of 2017, I believe that the topic of cryptocurrencies is one that I can use to explore the realm of critical thinking that I stress throughout allSKWealthAcademy courses, as well as the topic of cognitive dissonance, which I explore in depth in a single course. In this case, I am going to explore a minority opinion that exists against a majority consensus in the realm of Bitcoin, as exploring an opinion that opposes the accepted narrative requires careful exposition to defend. Before doing so, let me provide a quick update regarding the status of SKWealthAcademy. Right now, the stumbling block in having even a soft launch of several of our SKWealthAcademy courses is an efficient distribution system, so we are working out the details of the best possible distribution system that will also efficiently connect all of our members in a global community. I have contacted several different companies regarding this development and once we can settle on a satisfactory solution, then I will finally launch my SKWealthAcademy. I have spent the last 10 years developing all the coursework for SKWealthAcademy, so delaying its launch by a few months to find an adequate solution to this obstacle makes the most sense to us. Now back to the topic at hand.
The topic of cryptocurrencies is an ideal topic to illuminate critical thinking and cognitive dissonance because it is one that is often overrun with cult-like emotions, in which many cryptocurrency owners and advocates are not only unwilling to consider the possibility that cryptocurrencies may be used to provide a much more damning financial control mechanism of humanity than even fiat currencies, but also are often compelled to attack those that propose this very realistic probability with attacks rooted in emotion, but devoid of facts. If you make it to the end of this article, you will actually discover that I believe that a cryptocurrency, but only one that fulfills all the qualities of sound money, can liberate humanity and that I furthermore am a big fan of the untapped, yet undeveloped applications of blockchain technologies. In addition, I also believe that BTC prices could move even higher from this point. Of course, they could also crash. But the point is no one knows where the price is headed and some falsely extrapolate that just because I have some valid criticisms of the group-think mentality that often surrounds BTC, that I necessarily must believe that prices will crash. Whether prices rise or crash from this point forward depends on how Central Bankers’ plans fit into the unknowns of the BTC universe at the present time. However, that does not negate the current problems I still have with the current state of cryptocurrencies, as the cryptocurrency I advocate must possess very specific parameters, as I will reveal. To me, critical thinking is not just about being able to construct a logical, fact-based argument to prove one’s point, but it is also about being smart enough to understand when positions are indefensible due to a lack of supporting evidence. In this investigation of BTC, I myself do not have the answers to the questions I am broaching, so I am willing to state that I definitively do not know the answers, and can only offer my thoughts and speculations. However, in the cryptocurrency world, specifically in regard to Bitcoin, I have encountered many Bitcoin owners that emotionally defend what I find to be indefensible positions with declarations of zero doubt about their declarations, despite no concrete evidence or proof of their allegations.
Before I continue, let me stress that I am not referring to all Bitcoin advocates. I have met a few Bitcoin advocates that have conveyed to me that they will convert BTC into physical gold after very large spikes in price for the very reasons I am raising in this article. On the other side of the spectrum, there are BTC advocates that state they will never ever sell BTC because they agree with John McAfee’s proclamation that BTC will rise to $500,000 by 2020. However, the majority of BTC advocates I’ve spoken to, which number in the dozens of people, embrace beliefs about BTC that they defend as facts even though I find many faults with the claims that these beliefs are indeed facts.
Is Bitcoin Definitively an Invention Outside the Realm of Central Banking?
Many Bitcoin advocates provide some iteration of the same response when I raise the possibility with them that Central Bankers could possibly be behind the origins of Bitcoin as a ploy to spread acceptance and adoption of a 100% digital currency worldwide. In response to this possibility, almost all BTC advocates to whom I’ve spoken immediately deny that this scenario is even possible with cult-like fervor, stating that because the creation of BTCs is a decentralized process, it is impossible for Central Bankers to have created BTC. What I found odd was that nearly every single Bitcoin owner provided some type of variation of this same answer, as if they had all been programmed to provide the exact same response if questioned by anyone about Bitcoin possibly being a tool of Central Bankers. Normally, when people overwhelmingly give the same objection to a possibility, and not a varied range of objections, this objection is being programmed into the populace, much as there is a very large group of people that refuse to view gold as money because they believe it is a “barbarous relic.”
I also found it interesting that almost every single Bitcoin owner who I questioned about this topic also provided some iteration of the exact same answer to further probing questions I posed. For example, if I asked a Bitcoin owner why they believe that Bitcoin was an invention to fight the current Central Banking fiat currency system, most replied that its decentralized creation meant that no central organization or entity could control the flow of Bitcoin in the global economy. Decentralized, open source creation meant it was the people’s money, I was informed. On the surface that explanation sounds great. A central organization that has a monopolistic control on currency creation and flow in a nation is a central tenet of Communism, and if decentralized creation indeed meant decentralized control, then this would at least be a start for the creation of “free” money. However, I also found it interesting that over the years, this narrative became much louder and stronger the more the price of BTC rose. Again, if you are reading this article, you may very well have been an early adopter of BTC that decided to buy BTC because you believed its origins were anti-Central Banking from the start, but regarding my experiences with some of the same BTC owners over time, which I realize is a very tiny sample size, I never heard them mention the anti-banking narrative as a reason to buy BTC until the price started going parabolic, which led me to conclude that they were repeating a narrative they had been told instead of this narrative being one which they had formulated on their own from the start.
To be equally fair, I am also not raising the questions in this article because I heard other people raise them, but I have had these same questions, which I have been unable to definitively answer, for many years. In fact, I first proposed that the end game of Central Bankers would be to push the entire world on to a 100% digital currency platform more than 15 years ago in a screenplay I wrote called “Vipers and Thieves”, several years before BTC was even invented (a Creative Artists Agency executive based in Los Angeles that read my screenplay in 2005 in which I discussed this concept can confirm this). Though he didn’t read my screenplay until 12 years ago, I had completed writing it 15 years ago, and this was my vision for where Central Banking was heading way back then, as my screenplay was set in the future in the year 2020. Then, after BTC was invented, I wrote another article online, reiterating my belief that the end game for the global banking cartel was to ban all cash and coins and to eventually push the entire global economy onto a 100% digital currency platform. In any event, when many BTC advocates told me that control of BTC’s price was totally decentralized, this concept, of course, interested me, and I read several white papers about the invention of cryptocurrencies to further understand exactly how they worked. If BTC operated under total decentralized control, then indeed, this currency would offer a far superior system than a centrally controlled currency. However, just like the insistence of early BTC adopters that BTC users would always remain 100% anonymous turned out to be untrue, I was likewise disappointed by my findings when I investigated claims that decentralized creation of BTC meant decentralized control.
Is Control of Bitcoin Definitely Decentralized?
After researching this topic, here is what I discovered about Bitcoin’s decentralized control allegations. There is no evidence that proves this allegation to be false and no evidence that proves this allegation to be true. Therefore, this belief is not a fact but it is mere speculation. Nearly all, but not all Bitcoin owners, acknowledge my argument that the anonymity of its inventor, Satoshi Nakamoto, likely a conglomerate of people and not a single person, is problematic for the following reason. Without any verified proof of Satoshi’s identity, one cannot know whether Satoshi is someone with close ties to Central and commercial banking, or someone completely independent from the influence of the same bankers that have subjected us to their immoral fiat currency system. Some Bitcoin owners vehemently insist Satoshi’s anonymity proves that Bitcoin is an anti-banking invention, because they insist Satoshi remains anonymous for his own safety, and if his identity were known, that he/they would be murdered, or at a minimum, jailed. And this reason for Satoshi’s anonymity is offered up as “proof” that BTC is anti-banking. However, this explanation is mere speculation and speculation can never serve as “proof” of one’s thesis. No one knows why Satoshi has remained anonymous, and that is a fact.
In any event, let’s return to the argument that I’ve heard from nearly every single Bitcoin advocate that Bitcon’s decentralized creation process equates to decentralized control. Again, the fact that I’ve heard so many Bitcoin advocates make a claim that is entirely unprovable at the current time, leads me to believe that false narratives around Bitcoin are being created to encourage widespread adoption of it. A quick look at the gold market would quickly dispel the notion that decentralized creation/production equates to decentralized control. Production of gold is decentralized throughout the world, but yet, for decades, Central Bankers centralized control of gold’s fiat currency price through their executed dumps of billions of paper gold and paper silver in London and New York futures markets. But let’s return to why this equation is unprovable for BTC as well. My research uncovered that during the first year of Bitcoin mining in 2009, 1.5 million BTCs were created, of which BTC’s inventor, Satoshi Nakamoto is alleged to possess up to 1 million of these 1.5 million of BTCs. As of June 2017, 16.4M of the total limitation of 21M BTCs had been mined. If Satoshi indeed owned 6% of the total BTC supply, this amount would be the equivalent of several billions dollars in US fiat currency valuation as of August 2017.
With control of 6% of all BTC supply, Satoshi could likely significantly move the price of BTC up and down by himself during thinly traded market times, and by colluding with a few other large BTC holders, this possibility would become a certainty. Furthermore, as far as anything publicly reported on the internet, though I haven’t confirmed this myself (and someone can correct me if this next statement is wrong), but there isn’t any evidence from tracking BTC transaction records, that anyone has cashed out several hundred million or a billion of BTC at this point, even if such large transactions had to occur across multiple BTC wallets. If I were Satoshi, and Satoshi’s identity were a single person, wouldn’t it make sense to at least cash out of several hundred million or even one billion dollars at this point with such a massive parabolic rise in price, and let my other several billion dollars in BTC ride at this point? The fact that there is no evidence to massive withdrawals at this point, for someone that likely owns several billion dollars in BTC today, also supports my contention that Satoshi is not a single individual, but likely an institution.
Some people inquire why nobody knows the exact amount of BTCs owned by Satoshi or the largest amount of BTCs held by a single individual, but the answer is simple. The identity of BTC wallet holders remains unknown from the general public, and Satoshi is alleged to possess his BTCs across several wallets. Though one of the prime benefits of using BTC that was marketed to users of BTC was complete anonymity, by now this myth has been completely debunked, as not every part of the BTC transaction chain, in the manner in which most people buy and sell BTCs, is anonymous. Consequently, there are vulnerabilities at certain points in the transaction chain that governments can exploit to pin an identity to most BTC owners and can do so quite easily. Because most BTC users, in the way they conduct BTC transactions, expose their identity to anyone with a vested interest in identifying them, alphabet agencies probably have a good read on the possible identity of Satoshi Nakamoto, if they themselves are not part of his identity. However, to the non-hacker, and non-alphabet agency employee, most BTC users will still remain anonymous to the general public. Thus, there is no way to prove if there is a small group of people controlling most BTC flow, or not, as the largest owners of BTC could be the same person or part of the same institution.
If a small group of people control a significant portion of all existing BTCs, and work together to control its price, then by definition, its price is under central control, and it does not matter at all if its creation is “open source” and “decentralized”, which are two terms I constantly hear as the reasons that control of BTC cannot possibly be centralized. Though I certainly have not provided a single piece of evidence that control of BTC is centralized in the hands of a few people or a single institution, the lack of this evidence does not disprove this possibility either. Nor does the anonymity of Satoshi Nakomoto serve as proof that BTC control is decentralized, though I have also heard this claim as well. What we do know, beyond a shadow of a doubt, is that the answer to this question remains an unknown. This much is a fact.
Is Bitcoin an Anti-Banking Industry Currency?
Finally, let’s look at the last argument that I’ve often heard from BTC advocates regarding their belief that BTC is a currency whose purpose is to liberate humanity and that it is anti-New World Order, anti-establishment and anti-Central Banker. This argument is built on the following faulty thesis. Since the blockchain software on which BTC runs exists on the internet, governments and bankers can never stop BTC from trading unless they ban the internet, which will never happen. We only need to extrapolate this argument to gold to reveal the faults of this argument. Though no one really knows the private gold holdings of citizens around the world, as there is no public ledger of private gold transactions at the retail level, the World Gold Council has estimated Indian citizens cumulatively hold between 18 to 20,000 tonnes of gold (of course I don’t find the World Gold Council’s numbers to be credible as it is not a credible organization, but this is an argument for another day). According to “official” numbers, Japan is often reported as having the largest retail demand for gold and may be the number one country in the world in terms of private gold ownership. If so, then citizens of Japan and India would comprise the largest subset of private gold holders in the world, even cumulatively owning perhaps more than the PBOC (People’s Bank of China), which is believed at the current time to own at least 20,000 tonnes of gold. Despite “official” gold reserve numbers placing the United States on top of the State gold holdings list at 8,133 tonnes of gold, anyone that has performed any critical research into these “official” gold reserve holdings can poke enough holes in Central Bankers’ reporting procedures to cast serious doubts as to the legitimacy of these reported numbers.
In any event, the black market of smuggled gold in both Japan and India has been so large in recent years, that again, the unknown data of this market makes it next to impossible to compile accurate numbers regarding the cumulative private holdings of gold in these countries, and all numbers are estimates based upon speculation. However, if the argument that it is impossible for governments to stop BTC use without declaring use of the internet illegal were viable, then this same argument should apply to physical gold use as well. Because there is no possible way in which governments can stop people from the act of using their private physical gold reserves to buy and sell goods in private unreported transactions, then there should be no feasible way for governments to stop a movement towards the widespread use of gold as sound money in the economy. But yet governments have done so, and we must then come to an understanding of how they have accomplished this. To explain how governments and bankers have prevented the use of sound money like gold from gaining systemic acceptance and use by the citizens they control in their nation States, they merely only had to pass regulations to prevent gold not from being traded or owned, but from being accepted as money in their State run and planned economies. In every nation in the world that has a Central Bank operating within it (which is nearly every nation in the entire world), Central Bankers have made the use of any currency they do not 100% control illegal. Thus, they only had to make the use of gold illegal as payment for goods and services to kill its use in the economy without ever having to kill the ability of anyone to freely own and trade gold.
Governments and bankers cannot stop people in their countries from buying gold, and even when they attempted to kill retail purchases in India by increasing gold import taxes a whopping tenfold in just 19 months, from a negligible 1% in January 2012 to a ridiculous 10% by August of 2013, people still found a solution around this regulatory attempt to prevent retail ownership of gold. When these regulations were enforced, gold smuggling to circumvent this tax soared in India, and citizens still continued to trade crumbling rupees for gold. Thus, I understand the argument that governments and bankers cannot stop people from buying and trading BTC, because similarly, they cannot stop people from buying and trading physical gold. However, to prevent gold’s use as money in their economy, Central Bankers simply only had to declare gold as illegal to use as payment for goods and services to ensure that they maintained an iron fist of control over their currency monopoly in every nation in the world. By declaring gold illegal as a payment source, bankers still cannot actually prevent a private party from accepting physical gold as payment for goods and another private party from using physical gold to pay a merchant. In fact, doing so in India didn’t work and Indian citizens still used gold as payment in the economy.
To prevent this from happening, PM Narendra Modi, had to take cash off the streets of India by declaring the 1000 and 500 rupee note illegal at the end of 2016 in order to get this cash to return to Indian banks, and then engage in a plot to convert what had been a nearly pure cash based economy in India a year ago into a digital currency based economy. Before Modi’s ban, 98% of India’s economy ran on cash-based transactions, but Modi’s ban on 1000 and 500 rupee notes banned 86.4% of the total cash in India at the time (Source: the Reserve Bank of India). This deviously caused an immediate surge in the adoption of BTC use in India in November of 2016 as Modi imposed a cash liquidity crisis overnight on India. Furthermore, even though a Mastercard report in 2015 named India as one of the countries least ready in the entire world to adopt digital cash, after the Modi cash ban, $80 billion of cash was removed from the streets in just 6 months, and the RBI and PM Modi continue to push India into the fastest transition ever from a nearly 100% cash based economy into a purely digital currency based economy. The single fact that bankers and the elite like Bill Gates are pushing a false narrative that 100% digital currency will help the poor get out of poverty is enough to make me distrust any 100% digital currency that is not backed by anything. However, Bill Gates also stated in 2015 that BTC is not the solution, so this statement is either a reverse psychology ploy, or an affirmation that while Central Bankers definitely want to ban cash and coins all over the world, they are not behind the development of BTC, but are only using its success to gain acceptance of the idea of a 100% digital currency world.
However, given the very high distrust Indians have for bankers, though the RBI and Modi are pushing very hard to transition India into a 100% digital currency economy, I still have massive doubts as to whether this scheme can ultimately succeed. I suppose that bankers want use India as a testing ground to prove that if they can transition/force the ultimate skeptics of modern day banking, Indian citizens, into a 100% digital currency economy, then they can replicate this achievement in any nation State in the world. Remember, this is not my first warning to Indian citizens to view all government-sponsored programs sold to them as being for their benefit with heavy suspicion, as I warned Indian citizens of Modi’s wolf-in-sheep’s clothing plan to forever confiscate their physical gold holdings one year prior to his rupee ban, in this article here. Of course, it was the very failure of Modi’s plan to confiscate Indian citizens’ massive private gold holdings that led him to then enact the harshly punitive-on-the-poor rupee ban just one year later in November of 2016.
The fact that no Central Bank in the history of the world has ever allowed a competitive form of currency to exist in the economy that posed a threat to their fiat currency monopoly alone should be extremely worrisome to those that believe that BTC is an invention independent of Central Banking. Again, this is not proof that Central Bankers have a hand in the creation of BTC at all, but it is a fact that BTC is the first currency in the history of the world that Central Bankers have not only allowed to co-exist with their monopolistic fiat currencies, but have also aggressively encouraged people to adopt on a more widespread basis through their minion global commercial banks like Goldman Sachs. For those that point to the period of time known as Bretton Woods and state that gold was allowed to exist as an alternate currency during this time, these people have only adopted the banker promoted view that Bretton Woods was a “gold standard” and do not understand how the Bretton Woods system operated at all.
I find it extremely odd that more BTC advocates do not even consider the possibility, just the mere possibility, that Central Bankers could be behind the creation of BTC and its growing acceptance among global citizens, especially since I predicted today’s popularity of cryptocurrencies more than 15-years ago in my screenplay, Viper and Thieves. In fact, in my screenplay, State officials rejoiced and declared the adoption of 100% digital currency that backed my hypothetical National Electronic Monetary Act (NEMA) as the greatest advancement in US history since the Industrial Revolution and declared that the people’s acceptance of 100% digital currency would create an unprecedented economic boom for everyone, even the poor. This is exactly how bankers and politicians are promoting digital currency to people everywhere around the world today, 15-years later. However, the reality is that transition to 100% digital currency would compound economic hardships for the great majority of those that live in poverty, a conclusion backed by former Indian PM Manmohan Singh for the exact reasons I outlined in my 2012 critique of this end game. Singh called Modi’s ban outrageous “legalized plunder” that “caus[ed] grievous injury to the honest Indian who earn[ed] his/her wages in cash and a mere rap on the knuckles to the dishonest black money hoarder”, and one that thrust grave, undeserved and unnecessary hardships upon the poor.
To add fuel to the speculative fire, I find it very curious as to why Goldman Sachs is so hell-bent on promoting BTC, even predicting that BTC would recover to $4,000 at the exact time it fell to the $1,830 level just four weeks ago. Then, when BTC recovered all of its losses in no time at all after their prediction of a $4,000 price and cleared the $3,000 level, this inspired Goldman Sachs’s Sheba Jafari to increase her BTC forecast from $4,000 to $4.800. Given that Goldman Sachs bankers are known for releasing notoriously poor and wrong, but very public forecasts, year after year after year, I find it extremely curious that their BTC predictions have been spot on (see this article titled “Goldman Capitulates: Closes out 5 of its Top 6 Trades for 2016 [By February] at a Loss” , including a recommendation to short gold at the start of 2016 as a top trade idea, after which gold promptly rose 30% in the first six months of the year). It’s not that I think Goldman Sachs bankers are dumb and that is the reason why year after year, most of their top recommended trades spectacularly fail. To the contrary, I believe that they know exactly what they are doing, and very publicly release such doomed “top trades” in an attempt to dishonestly fleece the very naïve segment of their clients that they derisively refer to as “muppets”. In fact, this theory has been confirmed in past years, as various entities discovered that Goldman Sachs bankers historically made “fortunes” by betting against their clients’ positions. So again, I ask, “Why have Goldman Sachs bankers gone against their modus operandus with public forecasts and why have their forecasts about BTC’s price movements been the only publicly made forecasts in recent years that have been spot on?”