## Tuesday, November 21, 2017 ... /////

### Feminism and Bitcoin: two faces of Millennials' emptiness and relative truth

When increasingly ludicrous rewriting of the reality becomes a source of pride and identity for a whole generation

The generation born around 2000 – the Millennials – have been brainwashed by some stunningly stinky extreme left-wing lies at schools and outside schools. The consequences for their thinking have been devastating. Socialism is more popular than capitalism among those. Lots of these people are attracted to mass killers such as Che Guevara. They don't have any respect for freedom, the free market, and democracy.

And so far I only mentioned that old-fashioned, 19th century type of the extreme left-wing ideologies that used to worship the workers. These young folks have been much more contaminated by the postmodern left-wing ideologies – the cultural Marxism. That includes teachings such as feminism, homosexualism, multiculturalism, environmentalism, global warming alarmism, and others. The first goal of all this indoctrination is to make these people doubt the most self-evident facts out there, e.g.:

Most of the civilization has been built by men and, at least in recent 500 years, white men.

Heterosexual contact is more healthy and aligned with Nature's original purpose than alternative sexual orientations.

Carbon dioxide is a gas that is absolutely vital for the current life on Earth.

$\pi$ is a perfect mathematical constant.
And others. After this lobotomy or simultaneously with this lobotomy, the teenagers have been encouraged to believe lots of would-be analogous but "more politically correct" counterparts of these statements such as
The civilization was equally built by all sexes and skin colors and if it wasn't, it's only because the white men are hardcore oppressors who need to be suppressed.

Gays are cooler than straight people, there also exist 28 additional genders, and everyone can choose zer own.

Carbon dioxide is a top villain and we must work hard to remove it from the atmosphere and punish those who emit it.

$\pi$ is just a white male construct and its value actually depends on the degree of oppression by that evil group.
And others. Everyone who verbally prefers the latter statements over the former is demonstrably either a brain-dead, scientifically illiterate moron, or an optimized liar and shameless demagogue who probably spreads these ludicrous lies in order to elevate himself and his ideological and political allies. At any rate, the number of people in these two groups is staggeringly high and it kept on growing.

After this lobotomy, what do the individuals think about science? Here is a two-day-old tweet:

Wow. We learn that there is no science. You would think that Dani Hensley has to love science – her face has been made out of the newest branch of plastics and she successfully underwent the transplantation of a brain from a cow and the cow was genetically modified and suffered from a mad cow disease, too. How could such a person who owes everything to science dislike science? ;-)

I honestly don't know whether the user wrote this tweet seriously or whether it is a social experiment. I believe that I have encountered analogous statements that have belonged to both groups. The face looks artificial – made of plastic materials – so I prefer to bet that it's a social experiment but I am not sure.

OK, the people who have accepted the "education" from the radical cultural Marxists believe that all of science is just "fancy opinions" and people have bought their being scientists for the money, and all of science is just another way of oppression. You must have encountered this lunacy – and both stupid and intelligent analytic talks about it. Now, the main point of this blog post is to say that the Bitcoin cult is just another flavor of this "relative education" which completely strips people from their common sense and from the rudimentary knowledge needed to understand the most basic things about the world, that makes even the most self-evident things look relative, and that encourages the brainwashed youth to replace these self-evident truths by ideologically convenient nonsense.

Let's start with some statements, especially about the value of some new cryptocoins offered to buyers in the so-called ICO, "initial coin offering":
The money obtained from the buyers are a form of robbery because they don't receive anything with any positive intrinsic value for their money and what they obtained is only good for them as long as they will be able to find someone else – a greater fool – who will buy it from them as well, also regardless of the lack of any intrinsic value.

ICO is very different from IPO, Initial Public Offering in which stocks of a newly traded company are sold to many would-be stockholders for the first time, because during IPOs, people buy fractions of companies that actually have an intrinsic value and produce things, like Exxon, McDonald's, Facebook, or Microsoft, while during ICOs, they buy an intrinsically worthless virtual thing that don't produce or guarantee for them anything, such as cryptocoins.
What does the Bitcoin cult – which I present as just another branch of the cultural Marxism – replace these facts with?
The value of all things is completely subjective. So it's completely reasonable for people to decide that all the cryptocoins in a new cryptocurrency are worth the same as the McDonald's company or the whole money supply in France or all villas in California. The latter also fail to have any intrinsic value.

ICOs and IPOs are basically the same thing. Some thing is offered by someone who becomes wealthy at the moment.
What!? By the way, I've heard or read such things many times and most recently, yesterday, I read this stuff from a person who isn't quite a Millennial although he or she is dating them. ;-)

At this moment, when I am typing this sentence, the total value of 16.7 million Bitcoins in circulation is $135 billion. That's a staggering number equal to the currency reserves of Iran (and just a few percent below those of Czechia, the world's #17 country in currency reserves). Those$135 billion are also equal to the total capitalization of McDonald's, the global company, which is 47th in the world by the capitalization. Just think which of these things should be more valuable – Bitcoins or all of McDonald's assets in the whole world? The people who choose the answer "Bitcoins" are sort of lunatics. But the Bitcoin price may keep on growing further so by these current numbers, the Bitcoin capitalization may trump not only McDonald's but also Apple, the #1 company whose capitalization is some $870 billion. The comment "prices and values are decided by humans and their consensus" is obviously correct at some level. When people trade one coin of Bitcoin Cash for some$1,000, it is as consensual as the purchase of iPhone X for the same $1,000 from someone. When it comes to the immediate voluntary character of the transactions, they are the same. However, here I come to the main point: Those of us from the good old world realize that there also exist some objective facts that are independent of what we and the people around us say. The indoctrinated feminist-Bitcoin generation denies such a statement. What they agree to say is their truth and no external facts can change it for them! The principle of this full-blown denial of the truth that transcends someone's subjective statement is the same in the defense of the Bitcoin and in the ludicrous politically correct clichés about "genders", races, and identity politics. Just like the students brainwashed by feminism apparently think that they can change the fact that the civilization is being overwhelmingly created by men – just by constantly repeating statements that directly contradict these basic facts – the Bitcoin defenders believe that they may suppress all the laws of economics, trading, investment, risk management etc. just by repeating their ludicrous statements about the prices and the future of the mankind and stuff like that. The actual difference between the sale of the McDonald's company for$135 billion; and the sale of all Bitcoins for $135 billion is rather obvious. The McDonald's company is composed of buildings, machines, contacts, brand etc. that allow the owner(s) to produce things like hamburger, sell them with profits, and produce profits of$5 (net) or $8 billion (gross) in 2016, for example. On the other hand, the Bitcoin doesn't allow you to produce billions of hamburgers. You may only believe that it's a good idea to buy it for$8,000 if you also believe that you will be able to sell it someone else for a similar or higher price – someone who will have no other reasons than a greater fool, just like you have.

Young people who have redefined the reasonable value of one Bitcoin from $0 to$8,000 – and are ready to redefine it to an arbitrarily higher number in the future – simply love to redefine the reality.

They have been trained – by feminists and other cultural Marxists – that one may erase the reality and facts just by repeating lies i.e. statements that contradict facts and by surrounding yourself with lots of similar sheep who say the same thing (many of those should better be journalists or influencers). They're doing it constantly in the context of social affairs and they're doing it in economics and trading, too. And they may talk to each other and agree that the Bitcoin is fairly valued at $8,000 and should be$196,165 before they "generously" consider to sell their first Satoshi (ten nanoBitcoins, the smallest recognizable fraction).

However, those of us who haven't been sucked into this bubble of insanity still see the reality that is already being hidden from those inside the Bitcoin cult. The reality is that the Bitcoin's intrinsic value is still zero and the Bitcoin may only be sold for those huge amounts because of the existence of the opaque bubble that fools all the people inside and prevents them from seeing the truth.

It's still a fact that a person who collects millions of dollars for another copy of the Bitcoin concept is really a thief. He is giving them nothing of any value and the people only accept it because they have been completely brainwashed and stripped of their common sense, or because they know what they're doing and they rely on the existence of others who have no idea what they're doing and they're only doing things that others told them to do.

There doesn't exist any objective or meritocratic justification of these things. Indeed, people who collect millions for new cryptocoins during ICOs are thieves and China, South Korea, and a growing list of other countries has banned ICOs and indeed starts to treat them as thieves because that's clearly what they are. Just minutes ago, some of these ICO thieves evaporated from the world with the money and lots of the thieves don't evaporate but they still keep the money, anyway. ;-) That's on top of the $31 million hacking theft from a Tether server today. I think it's obvious that everyone who sells a new cryptocurrency that is as unbacked by anything as the Bitcoin is a criminal. Also, every financial institution that is offering Bitcoin-like products to their clients without guaranteeing that the clients are ready to lose everything and they're maximally compatible with risk and volatility should be stripped of their license to do finances because such a financial institution is clearly deceiving the clients. Lots of signatures and confirmations "I am OK with a risk" are needed for clients to buy Asian stock funds etc. so the same must surely be required for the cryptocurrencies that are riskier. There exist tons of reasons why these non-currencies and tokens etc. may completely collapse – lose over 99% of their value within hours, days, or weeks, there's no "canonical" time scale because literally everything is possible. Just look at a catastrophic cryptocurrency such as the (heavily pre-mined, and during the peak, extremely religious) PayCoin. Its capitalization was over$160 million three years ago. It has dropped by 99.9% and today, $100 worth of the PayCoin is traded per day. That evolution was rational and should ultimately imprint itself to every other unbacked cryptocurrency. Is PayCoin a rare exception? Not at all. AuroraCoin was worth over$1 billion in early 2014. It's $6 million now, a 99.5% drop. It still has its faithful promoters who walk in pairs and preach like Jehovah's Witnesses and predict that the AuroraCoin will rise from the ashes. On the other hand, IPOs cannot be banned or demonized because they're a fundamental pillar of capitalism. Almost every new enough company of a certain size undergoes this stage – when the stocks are being offered to the public for the first time. No new industry could expand in a healthy way if the IPOs were banned. Those people who think that ICOs are on par with IPOs: What the hell is wrong with you? Bill Gates and pals – and Mark Zuckerberg and pals – have created and improved products that billions of people and their computers spend hours with every day. They do all sort of real things with Windows and Facebook that are really important for them or the world (I was talking neutrally but I obviously think that Microsoft's products and contributions to the mankind's progress are more valuable than Facebook's). How can you compare it with having your (unreadable) Bitcoin address included in some virtual ledger that has no tangible implications? It's hard to resist the idea that the accumulation of the Bitcoin funds that makes the current huge Bitcoin capitalization possible was largely motivated as a fundraiser among the Bolshevik, anti-capitalist Millennials to show that they may trump a thing – like a global brick and mortar bank which they hate – by a collective contribution that creates something that is clearly worthless. They wanted to show a finger to global corporations. But sorry, comrades, despite the work and expenses by millions of you, you have still just built a pyramid of dull passive money that can't produce and don't produce anything – while McDonald's prepares billions of hamburgers and billions of profit every year. When someone says that the sales of the Bitcoins for those$135 billion are as normal as the sales of the (set of all) McDonald's stocks for $135 billion, he clearly defends the viewpoint that a "new truth agreed by some social consensus" is on par with an actual truth even though it is obviously a lie. And they want to spread a new consensus, a new ideology where everything worthless is very valuable and everything valuable is worthless or evil. A society may evolve in this direction, towards the fictitious truths, but then the whole society deteriorates. Because we're outside this bubble of Bitcoin delusion, we still know that the virtual coins are intrinsically worthless, those who sell them are criminals, the typical buyers are victims of a criminal act, the cryptocurrencies are just an extreme game for gamblers, the changes in the assets are huge every day which is why these "coins" can't be used as the money e.g. to buy a painting, and the only possible long-term outcome is the evaporation of the value from this whole market. We know that the economy can't be built on such things and if whole nations became traders of the Bitcoin, they would starve to death because they produce nothing of value. Only desperate nations could try to use something like that. Zimbabwe is in a crisis (Mugabe has resigned or not depending on whether he has read the correct version of a speech LOL) and Bitcoins were sold for$13,500 because the market really doesn't work there. Well, it's still illegal to use them in that country, too. When you're driven to do business in this framework, you may pay twice as much and you may still be jailed for that. Despite Zimbabwe's using the "future money", their GDP per capita is still 100 times lower than America's.

The person I have mentioned – and other Bitcoin cultists – sometimes also say that people are obsessed with having their money in their hands – avoiding banks etc. Well, that's obviously rubbish. Even though the interest rates are basically zero in Czechia, almost all the big money is kept in banks because people realize it's still safer and more convenient than their houses etc. An overwhelming majority would surely not pay tens of percent just for the "beauty" of avoiding a bank. On top of that, an overwhelming majority of the people surely prefer to live in a way that will probably keep them out of jails; and for similar rational reasons, they generally want the value of their wealth to be guaranteed by as strong players as possible. The claims that it's almost "irresistible" or "mandatory" to work within the Bitcoin framework with all of its bizarre features – and that's why the Bitcoins "must" be so valuable and growing in value – are ludicrously indefensible religious enchantments that totally contradict all the facts. No one in the world is really calculating his income and/or expenses in the Bitcoins because it's not possible to live in such a way at all.

So all these arguments between the sane people and the Bitcoin cultists are examples of the standard conflict between the truth and lies – constantly repeated lies. To sustain the price of the cryptocurrencies or even the growth rate, they need to spread the lies increasingly frantically. It's obvious that the whole society suffers, lots of people are being pushed to quantify the value of things absolutely irrationally. So far the relative importance of the cryptocurrencies within the economy remains very small, perhaps 0.1% at most, but if it continued to grow well above 1%, it could threaten the markets, their efficiency, and so on.

Along with worshiping of things like the Bitcoin that are intrinsically worthless, the Millennials disrespect things that are completely essential. Like capitalism, the free markets, and corporations including the brick and mortar banks. The latter are actually needed for the economy to work. Indeed, Bitcoin is socialism. The youth have never understood how it's possible that they get everything elementary they need to eat, to drive, to communicate on the Internet, to do anything. They just take it for granted. On the other hand, most of the young people are still relatively poor, not having much more than what's needed to survive, and they believe that all the rich people get their cash basically for free, so they want it in this way for themselves, too. To some extent, this whole denial of reality and far left degeneration of the masses is a very likely consequence of people's excessive wealth. They don't understand that if they demolish all banks and precise calculation of prices everywhere and replace them with the Bitcoin non-banks and the Bitcoin amounts whose actual value changes by 10% a day in average, the whole system collapses.

I need to mention Warren Buffett. He's an old-fashioned, fundamental investor who has really earned the money by buying companies that are cheap relatively to their intrinsic value; and by selling them when they are above their intrinsic value. He's an investor who has always looks at the substance – instead of the social fads and "momentum". For this reason, he obviously agrees with your humble correspondent that the Bitcoin is intrinsically worthless, it is a mirage. What is the intrinsic value? Buffett's and friends' definition is the most rational you could think of:
The intrinsic value of a company is the (expectation value of the) total discounted future profits that you may get out of the company throughout its whole future up to its expected liquidation.
It makes perfect sense, doesn't it? In average, the money that you invest to the stock equals the money that you get back in the form of dividends throughout the integrated future (while the future profits have to be discounted) up to the moment when the company stops producing profits and its stock price drops to zero (bust). The definition doesn't have any totally free, phenomenological, completely randomly chosen parameters. Let me discuss the definition in some detail.

You know that the price of a stock P is some multiple of the average dividends per stock, i.e. earnings E, right? The P/E ratio may be around 10 for some stocks. It means that the annual dividends are 10% of the stock price. In some industries, the ratio may be P/E=20 which means that the dividends are 5% of the stock price, OK? Is there some explanation why the ratio is higher in some industries and lower in others?

It has something to do with the sustainability of the business! If the company were guaranteed to produce the same profit for 200 years, its P/E could obviously be higher. It's a goose that constantly lays the golden eggs – so the price of the goose must be at least comparable to the price of the whole long chain of golden eggs you're expected to get from it. On the other hand, if there is a big risk that the company will go bust in 5 years, the P/E could be as low as 5 etc. So the more long-lived the company is, the higher the P/E may be. Also, the faster the expected growth of the earnings E in the future, the higher P/E may be expected (in the latter ratio, it's the recent past "E" that is substituted, and that may be lower than the future ones), and so on. The previous sentence is what could rationally justify the insanely high capitalization of Tesla Motors (which produces 15 times fewer vehicles a year than Škoda Auto, but – insanely enough – is the world's #4 carmaker by capitalization, almost matching the whole Volkswagen Group!). Needless to say, I think that this belief in the spectacular future growth of Tesla is just another religious cult – one that has many things in common with the Bitcoin cult. But at least, there is some substance in Tesla Motors, some cars that make some people wow are being produced and others might be added. While many investments have been criticized as "pure bubbles", it was never the case because there was always at least some substance – even in the tulip bulbs, of course. The Bitcoin is the first archetype of a pure bubble which has no substance whatsoever.

I wrote that Buffett discounts the future profits. When a company earns $1 in the year 2030, it's less cool than if it earns$1 in the year 2018. How much does the attractiveness of $1 in the future (N years from now) decreases with N? It decreases exponentially with N, and the rate per year isn't quite the inflation rate or 9-10 percent as others would arbitrarily pick. Buffett actually uses the standard (long-term i.e. 10-year or 30-year) Treasury rate. It's usually slightly below 3%. So the future profits are almost as important for Buffett as those in the imminent future. This has several consequences. First, by using the low standard discount rate, the future matters a lot. That's why Buffett values stocks in the first place. He realizes that they may be capable of producing profits for decades if not centuries – while others only count the profits in several years in the future. That's why these geese that lay golden eggs must be more valuable for Buffett than most other people think. Second, whether some business is sustainable matters a lot for Buffett. Those people who use a much higher discount rate for these stock valuations effectively ignore the future and the life expectancy of the company. Buffett's focus on the long-term future (implied by the low discount rate) also explains why he is conservative when it comes to the industries and cautious when it comes to some hot new industries: they haven't demonstrated their sustainability yet. Let me say that Buffett and pals really calculate the valuations from the first principles, as I sketched, without any phenomenological rules. A company is something that will generate profits in the future, it will stop at some moment, and you want to know how much profits you will get, and discount them in a way that prefers profits that will appear soon. This Buffett-style calculation of the company's value isn't just a social convention. It is an approximation of some objective truth. Buffett isn't trying to "redefine the truth" as ambitiously as you can get in order to lift his individual ego which is what the feminists, teenagers, Bitcoin cultists, and similar people do all the time (well, they're mostly trying to lift their collective ego of the herd). He is trying to approximate the objective, external truth as accurately as he can. And that's why Buffett is more successful than others. While a big player (or a big herd) may manipulate the reality temporarily, the objective truth ultimately wins! If someone calculates the values of companies according to less perfect way that depends on conventions, beliefs, guesses, and group think, he will see that the deviation of his result from the result of the Buffett-style objective evaluation becomes increasingly more important. At some point, it becomes obvious that he understated or overstated the value of a company. He loses, Buffett benefits. Buffett's fundamental assumptions include the assumption that people will return to rationality rather soon and he just needs to be faster than them. To return to rationality means to realize that there's nothing to be gained from holding the Bitcoin – it's a fad that has to fade away. One can make a profit from the Bitcoin, some people have made a profit (it only makes sense to count the profit that has already been locked because the true "hodlers" will lose everything), and others may make it in the future, but all these profits depend on the assumption that a big – and, ideally, increasing – fraction of the market players behaves irrationally. It's possible that lots of people make profit in this way but it's also clear that if a big majority of traders choose these strategies – basically amplification of human stupidity – the whole system (and the economy) will become dysfunctional. There are lots of details in Buffett's calculations – calculations by an eminent fundamental investor who really helps the market to find the right prices etc. – that would deserve huge lectures. I believe that some economics courses should be focused on as complete as possible learning of the ways to quantify the intrinsic value of corporations. Buffett has been doing these things really well – and, in some sense, in methods that resemble those of a great theoretical physicists. Some other investors use some phenomenological laws that were good enough. And they may still make profits although none of them has been so impressive for such a long time as Buffett. But compare Buffett, or even his less achieved colleagues, with the members of the Bitcoin cult. The Bitcoin cult basically (and often explicitly) says: There is no intrinsic value in anything. Everything is only as valuable as people say and we, the Bitcoin community, say that the Bitcoin should be worth$8,000 now, and not zero, and the price should be some $196,165 when we start to sell our first Satoshis. Be my guest and join a religious cult where members praise each other how wonderful they are when they repeat increasingly preposterous things. The number of members of the Bitcoin cult could have grown from 100,000 to 13 million in several years which is an impressive growth rate for a sect – which also explains the current Bitcoin price. (The total capitalization of the Bitcoins is basically the number of average cult members times a$10,000 member fee. The capitalization of the Bitcoins is their collective property, in a sense that is in between the logic of stockholders and a communist society.)

The Bitcoin cultists' obsession with the "scarcity" is nothing else than their collective prayer saying that they belong to an exceptional group of God's children. They're not interested in the right overall capitalization of the Bitcoins, whether they should have any nonzero price at all (that would be a heresy to even ask this question!), because they view this statement as a religious dogma that defines their "community". (See also this 2016 essay why Bitcoin is a religion.) They're only interested in the denominator (number of coins that won't ever surpass 21 million) which is just the usual religious believer's idea that he's a part of a prestigious, exclusive group of God's children.