For example, using bitcoin did you know you could buy a piece of art that exists only on the Internet? No physical representation exists. You can buy the art but you don’t own it. You can sell shares to people who won’t own it either. “Oh,” you say, “isn’t that just like leasing?” Perhaps but unlike leasing you can’t use the art or take it anywhere. Besides, thousands of other bitcoin investors are buying the same art so they can sell shares, too.
Try to set your mind in the most abstract position possible. This buying and selling of art shares takes the place of a bank and associated trading of debt between banks. Bitcoin was invented the year after the 2018 recession which was caused entirely by crooked bank dealings with something called collateralized debt obligations (CDOs). Passed off as triple A mortgages, the mortgages in fact were not triple A and contained all manner of mortgage failure.
Eventually, the false value of the CDO, very high because the whole intent was to make profit, came to light as mortgage after mortgage failed due to nonpayment. Caught ‘holding the bag’ so to speak, banks suffered unexpected losses; simultaneously real estate values plummeted because of the collapse of mortgage valuation in private investment markets.
So instead, bit coin users don’t buy real estate debt, they buy an artificial internet object that takes the place of real estate and is not subject to CDOs or any other bundling of debt because in the bitcoin world, every transaction is saved in one massive database where, to coin a TV theme, “everyone knows you’re name.”
Unless you have extra Monopoly money, don’t run out and buy an emoji. The bitcoin world is very fluid because it is not anchored to a three-dimensional world of physical things and human investment like jobs and commerce. It behaves more like a commodities market where prices are flexible based on availability instead of the value of the dollar. Bitcoin values – there are several different coins – can fluctuate wildly for no realistic reason. Still, one can avoid the shenanigans of Wall Street and the banks if one has a lot of Monopoly money to invest.
Eventually, paper money and even credit cards may disappear as the cloud and Internet become the financial platform for economics. Mariner wrote a post in February 2020 comparing North American Indian wampum to Kenya’s “first nation to do so” no-bank system by transferring cash with smartphones since 2007. The smartphone application world already has the software that can handle cash transfer but there are legalities in the way. For now, one needs a bank or card number.
Mariner still carries cash in a wallet he bought ten years ago. The bitcoin, bankless world doesn’t fit in the wallet. Where’s a cashier when you need one?