VPRO Tegenlicht Het Bitcoin evangelie (50 minutes)which shows that the Bitcoin isn't really a clever new technical solution to a problem. It is a religious cult led by extremely emotional and basically unhinged people who have crazy views about almost everything. The film is in Dutch but most of the interviews are in English. Almost all Dutchmen speak English very well but these bilingual programs show that the Dutch language is basically fading away. For sure, bilingual TV documentaries would be considered absolutely unprofessional – and unusable for TV – in Czechia.
The religious spirit among these people is extremely similar to the religious sect described by young Slovak film director Ms Tereza Nvotová, Take It Jeasy (2008; in Czech: "Jesus is sane/normal"), or documentaries about Guru Čmolík, a guy who collected millions by teaching his clients to chew banknotes to become rich, among similar things. Maybe the claim that the Bitcoin "is the same" is slightly exaggerated but the differences seem to be just in the extent, not in the quality.
At the beginning, we see a guy who is amazed that the Bitcoin may be sent by scanning a QR code at BlockChain.Info. One may make regular bank payments using QR codes, too. I've never used it because I find it inconvenient. It doesn't give me enough control over what I am doing etc. But at any rate, it's not true that the Bitcoin is "special" in this respect. QR codes are used by lots of other industries and regular banks. Also, it's not true that there's no intermediary. To confirm the transaction, one still needs the miners – and, in practical contexts, also the online wallets or exchanges. One needs computers in between and they may be turned off, censored, reprogrammed. Bitcoin exchanges are as powerful as banks with the same assets. The hype about the game-changing character of the Bitcoin payments is just a pile of horsešit.
After this guy with the QR code, someone complains that our system is based on debt, while the Bitcoin isn't. It's so pure, just ownership, no one is a slave, and so on. Clearly, this is another guy who has no clue what he's talking about. Any sort of money – and if the Bitcoin ever became money, it just couldn't be an exception – means that the "rest of the users of the money" owes you something. Do you have $1,000 in cash? It means that the rest of the world owes you approximately one iPhone X. In the same way, if you own 1 Bitcoin, the rest of Bitcoin users "owe you" 1 Bitcoin of services, although we can't know how many iPhones it will be tomorrow let alone in a year.
Someone can be in real debt if his net worth is negative. It's because he has borrowed. But whether he is allowed to borrow (and it's often useful for both sides to borrow and lend) – sign a contract that he will repay XY units of money, a contract enforced by lawyers, courts, executors, or police, if needed – is an absolutely independent question from the question what is the unit of the money. No one has borrowed lots of Bitcoins because their potential to grow by a huge factor would make the loan extremely risky – probably impossible to be repaid. But that's just a consequence of a fatal disadvantage of the Bitcoin that prevents it from becoming a currency.
Max Keiser, a fanatical anti-capitalist nut job, is shown as giving an insanely angry tirade saying that all the banks, central banks, Mario Draghi, Janet Yellen are terrorists. Holy crap, this Russia Today host is a whackodoodle. The first time I became aware of this lunatic was in late 2004 when I studied his insane activist website trying to destroy CocaCola and lots of other companies by fellow activists' "shorting CocaCola and then skip drinking a bottle of Coke". Just think rationally how insanely unrealistic the plan is. But extreme loons like Max Keiser are being promoted in various corners. I like several programs at RT – the CrossTalk of Peter Lavelle is by far my most watched one – but Max Keiser is surely a proof that RT also harbors some far left combative psychopaths.
OK, another person says that the Satoshi Nakamoto paper emerged during the 2008 financial downturn. A guy did a job interview at Lehman Brothers before they collapsed. These events could have helped the Bitcoin to be adopted. I am not sure about it. The biggest growth was in 2017 when the economy seems growing and safe. I think that the adopters don't know anything about the real economy and they don't care about it. The Bitcoin price is uncorrelated to any fundamentals or the broader economic events and indicators.
A Bitcoin cultist has some uncertainty whether Satoshi Nakamoto is a human being. He could be advanced AI, we hear. This kind of "divine" possibility is a part of the religious mythology of the Bitcoin community. They need it. It's why they have been so infinitely angry when Craig Wright sketched the possibility – I still believe it's totally conceivable – that he is actually Satoshi Nakamoto.
A random bloke who got rich with Bitcoins has electric cars. It's not surprising that they buy similar "hip" products for the money. It's the same kind of over-the-edge obsession with the overhyped trends. Some other evangelist worships the Bitcoin's scarcity. Scarcity by itself doesn't give the Bitcoin any value. One still needs some beef, some nonzero numerator, and Bitcoin has zero in the numerator expressing the intrinsic value.
Viewers are shown a very loud mining farm. Some Bitcoin proponent says that the governments can't ban the Bitcoin because they would need to shut down the whole Internet. As I discussed many times, that's nonsense, too. They can just order the ISPs not to allow any Blockchain-related traffic. They may outlaw the trading. When trading is outlawed, someone's sending Bitcoins by QR codes could be punished by jail. The very pictures shown in this documentary could be enough of a proof to arrest the people trading the Bitcoin. What happens with the cryptography is irrelevant. To ban the Bitcoin is as straightforward as to ban the hashish on the streets.
Another talking point by these fanatical critics of fiat currencies – but not only Bitcoin advocates – is that the government is doing "the same thing" as people who are counterfeiting money when it runs Quantitative Easing programs. Well, quantitative easing isn't the same thing at all. It's the exchange of cash for something that has the same value. The balance sheet of the central bank is still balanced. Equivalently, the central bank isn't really eating trillions of pizzas for its trillions of dollars. Because it's never "consuming" the bulk of the money, we know that it's not a player like others. It's just an independent arbiter.
Someone says that there should be the "separation of money from the state", like the "separation of the church from the state". Well, there actually is. Central banks are typically independent of governments in most countries. They still need to be friendly and cooperating with each other – otherwise there would be a civil war because the money is important just like other things that the governments do. And the same is obviously true about any future monetary system that works. If there's no civil war, the powerful guys doing important things with the Bitcoins and exchanges have to have working and peaceful relationships with the government, they need to be basically cooperative. Otherwise the government may send special units and kill them, or vice versa.
So this whole idea about the separation that didn't exist but will suddenly exist is just a rudimentary mistake in the thinking of all these people. It's not mathematically possible. One may declare a formal separation or independence but there will always be negotiations and common approaches to some issues, otherwise there would be a civil war! That's true regardless of the existence of dollars, crowns, or Bitcoins.
Ms Izabella Kaminska of the Financial Times is the smartest person who is interviewed in the show. Her first comment is that these people don't want to keep money in intermediary institutions such as banks. Except that most people in the real world prefer the safety of the banks. And even in the Bitcoin economy, most holders use online wallets and exchanges which play exactly the same role. In reality, whether or not people store their money in their own safeboxes, or they use some extra institution to store them, is a question that is absolutely independent from the "Bitcoin vs fiat" dispute. But these two questions are being constantly conflated by the Bitcoin cultists because they like to create the illusion of some "happy people floating in the vacuum" which is their ideal state of affairs. But most people just don't want to float in the vacuum and this fact has very good reasons that exist regardless of the Bitcoin.
You know, I am a libertarian from many viewpoints – and a world's top 1% individualist. But I don't want to float in the vacuum. I want the freedom primarily in the things that I consider important. For that purpose, I prefer to rely on the atmosphere which I breathe – and on other people who prepare some parts of the food I eat or who protect my cash in their bank. If I had to create my own air and take care of safeboxes all the time, I wouldn't really be free in the respects I care about. There's some "extreme libertarianism" that wants to destroy all bigger businesses, corporations, banks, people's reliance on bigger entities. In some sense, they want to undo the concentration of capitalism in the late 19th century. But all this concentration and bigger companies and massive infrastructure may be useful and is often useful, otherwise most of them would have never arisen. These extreme libertarians, and the Bitcoin cult may partly be described as being composed of them, just want to destroy everything. They don't want to admit that people sometimes want to team up to have big companies, banks etc. They don't want to admit it despite the fact that the Bitcoin movement is growing into a bigger, more disciplined, and more centralized animal than almost every institution they love to hate. What an irony.
(An analogous question occurs with higher languages and services. When I was 12, I hated my Commodore 64's printer when it was doing useless motion. I wanted to control the printer in the machine code, at the physical level, so that I would know and order exactly what it's doing with each pin etc. Well, later, I appreciated much more than in 1985 that someone else takes care of the machine-code or physical level of such tasks and I may focus on the more emergent, "human" tasks.)
Someone says that there's no destruction of the elite. Instead, the Bitcoin promises a transfer of wealth from the old elite to a new one. A problem with the new one is that it is a bunch of random average blokes who got some thousands of Bitcoins in 2010. They haven't done anything good for the world and they don't have any special skills. A world that gives most of the money – and therefore much of the power – to such average blokes is surely going to suffer. The concentration of capital is a key driving force of progress but it must be the concentration of capital in the hands of those who can do something special that others can't.
A man from London School of Economics correctly explains that the Bitcoin isn't a currency because even if you can pay a coffee for the Bitcoins somewhere, the price of the coffee expressed in terms of the Bitcoin changes all the time – surely many times a day. The price of coffee in Britain didn't change overnight despite a 15% plunge of the pound after the Brexit referendum. That's why the pound is money while the Bitcoin is not. The pound may be kind of relied upon by the Britons because its value relatively to the coffee sold in Britain – and most other regular enough things in Britain – is basically constant regardless of massive fluctuations of many other quantities in the world. You need this stability for your money to be understood as delayed consumption – to do any planning involving your money that involves your cash or your debt.
A miner says that he's earning a million dollars a day while his Chinese colleagues are making a loss. They're not driven by the profit – they're obsessed with their activities. Well, one would have to know whether the electricity itself is more expensive than the coins they mine. If it is, for a long period of time, then their mining is clearly irrational. If the electricity is still cheaper than the Bitcoins they mine, it's better to keep on mining – they have nothing else to do with the hardware – even though they may be making loss because they had to buy the hardware.
But the more general observation that lots of these people are willing to do lots of things that bring them losses – in the sake of the religion – is surely correct. I think that it can be seen all the time. When the CBOE futures started to be traded 30+ hours ago, the Bitcoin spot price went up. It had almost certainly nothing to do with the futures trading – whose volumes are basically zero (just 400 Bitcoins in futures were traded today so far, some 0.2% of the Bitcoin transactions in the world). I think that the uptick was driven by Bitcoin cultists who wanted to fight against a danger – a possible price drop related to the launching of the futures. They're a movement similar to other movements, a herd of faithful who are expected to sacrifice themselves.
BTW the CBOE futures see almost zero volumes – just 400 Bitcoins of futures since the midnight. And they indicate $18,000 future prices for January, February, as well as in March. I think that this is a reason why the Bitcoin price has basically stabilized in recent 24 hours. It may help to calm down the heads of the buyers in the Bitcoin mania and the drop may come later but just like before, I don't know how to determine the time scale because it's a bet on a phenomenon that is dominated by the people's emotions, irrationality, and a religious cult of a modern type.
Kaminska correctly observes that regardless of all the hype about decentralization, centralization has taken place in the Bitcoin, too. There is a huge wealth inequality. The miners are mostly in China. Everything is mostly "somewhere" etc. But the true believers still pretend that they're building a "better world" where these nonuniformities don't exist. Of course they exist. They're unavoidable. And they're also a condition for a civilization that works well. Also, Kaminska talks about the absolutism and politicization of everything by the Bitcoin cultists. She doesn't want to be dragged into politics while she is buying a coffee. Exactly. It should be business – which should be as apolitical as possible. When I drink coffee somewhere, I want to relax, not to be afraid that the waitress differs in some politics. But the Bitcoin cult would ideally want to change that, too. They don't want me to be able to drink coffee because I think that their claims are piles of šit.
Satoshi owes some 5% of Bitcoins. Isn't it a problem? A professional full-time Bitcoin evangelist answers No, he has the right to own this fraction of Earth because he's invented one of the most important things in the history of the Universe since the Big Bang. Holy crap. The blockchain technology is heavily overrated, too. It's not being used for anything truly useful so far. If people were rational, the patent for the blockchain would be cheaper than $100 million – I just want to be safe.
Ms Kaminska talks about the creation myth. It's great that Satoshi Nakamoto is detached from the mortals. He may be an extraterrestrial, a divine prophet, an advanced form of artificial intelligence. This plays a huge role in the Bitcoin religious movement. As I said, the cultists were devastated by the possibility that the somewhat independent Australian Craig Wright, with good muscles he needs to photograph all the time etc., who is a climate skeptic and was obsessed with collecting online degrees in cryptography etc., could be Satoshi Nakamoto. They were infuriated exactly for the same reasons why Christians may be angry when you tell them that Jesus was just another Jew, if I use the sentence my PhD adviser taught me. ;-)
At the very end, a Bitcoin cultist implodes and cries when he thinks about some dead Iraqi children and the Bitcoin. Under the Bitcoin, no Iraqi children would ever die. Oh, really? You know, I hate the idea of Iraqi children dying because of Madlenka Albright, too. But: What does the unit of money have to do with conflicts? If something, by its bigotry, the Bitcoin movement would create additional new conflicts if it ever became powerful at the global scale. Albright could have become an early adopter of the Bitcoin, too. Is there some faith that all the early adopters of the Bitcoin are basically angels? Prophets? Well, there clearly is such a belief, too, and it has absolutely no reason to be trusted. That's another assumption that turns the Bitcoin to a religious cult.