“Those who refuse to embrace the Bitcoin revolution will be overwhelmed.”
Go ahead, take that statement in. Not surprisingly, the Krypto-Kult is using a threat as a marketing tool. Why not, after all, when every other scammy thing has been used. At this point, if you don’t “embrace” the revolution (as opposed to buy or sell), you’ll be next threatened with death?
This is the kind of language typically found in the world of MLM and Ponzi Schemes.
But let’s now head back over to the real world. What if all the big investment banks and asset managers go in for crypto and large numbers of individuals and operations (Tesla, Microstrategy, etc.)?
Base characteristics:
Completely uncorrelated
Extremely and perpetually volatile
Highest security risk profile because of dependence on
a) Trustworthiness of exchanges
b) Fiscal health of exchanges
c) Sustained technical expertise using standard technologies to retain and secure customer wallets
d) Base infrastructure highly centralized/concentrated
Let’s examine the most problematic of these: d) Base infrastructure highly centralized/concentrated.
China currently accounts for 66% of Bitcoin mining and as large or larger shares for practically every other coin requiring PoW cryptographic algorithms to build blocks. If you include the Mongolia and Russia, you get close to 90% of mined crypto. Even if the location of the rigs was more evenly distributed, China still has a strangle hold on the technology. NVIDIA’s GPUs used to have a dominant position as the supplier of rig ICs, but now they are insignificant. The supply of mining rigs via the Chinese companies Bitmain and Canaan Creative covers north or 90% of the market. Trump’s policies had some effect on accelerating China’s project to in-source all this. But even without Trump, China has a long-term policy objective of freeing itself entirely of dependence on US/European tech and, more than anything, the dollar-based world economic system. In other words, western liberal democratic control of things.
As of October 2019, no Chinese citizen is permitted to buy or sell any crypto and have an account with any crypto exchange. In addition, Chinese citizens were not barred from owning in perpetuum any crypto they possessed at the time these laws were passed. That has created an enormous and permanent store of crypto (BTC, mostly) that can be used to manipulate markets without any trace.
China is still a totalitarian society which is openly inimical to western liberal democracy and, most of all, the west’s dominance of world financial systems. The economic and technological power that is increasingly given to China via Crypto gives pause. Once Crypto is in a large enough number of bank accounts and in investment portfolios in the West, there is the ability for China to wield political power in the same way the west does with the dollar reserve currency system. This is what they want.
Some people argue that because of PoW (Proof Of Work) supported PBFT (Practical Byzantine Fault Tolerance) and the game theoretic implications, there’s no way the miners or the rig suppliers would shoot (economically) themselves by undermining/destroying their businesses if the Chinese Communist Party ordered them to do it. There are ample reasons to think otherwise, starting with the example of Jack Ma.
