The Bitcoin Omen
Just how absurd is the prospect of flesh-and-blood beings adopting a Harry Potter currency with which to exchange the real value of their nonfictional labor?
Judging by a vanguard medium of exchange termed "Bitcoin," not nearly as absurd as you might think.
Bitcoin's market capitalization was last December almost $14 billion and is now still almost $8 billion despite nearly $0.5 billion in bitcoins having several weeks ago disappeared down a bankrupt French Bitcoin exchange baron's Japanese computer -- not to mention interim Bitcoin suicide, Bitcoin hacking, and even outright Bitcoin disownment. What that means is flesh-and-blood people recently had $14 billion, and still have $8 billion, worth of U.S. dollars at risk in an illegitimate cybercurrency which unknown persons in unknown places digitally cooked up in anonymous computer code subject to God only knows what moral and speculative hazard.
Nevertheless, that's peanuts compared to other cybercurrencies which flesh-and-blood people have long since adopted with which to exchange the equally real value of their equally nonfictional labor. Just one of those now has a market capitalization, so to speak, of more than $11 trillion -- roughly 1,375 times Bitcoin's present market capitalization. The $11-trillion one's the official U.S. cybercurrency, the overall supply of which has grown from less than $2 trillion in 1980 to over $11 trillion today:
God only knows to what moral and speculative hazard the official U.S cybercurrency will be subject during the next 34 years; but, judging from its having self-replicated almost six-fold during the last 34 years, that hazard may, in at least one respect, be higher even than the comparable hazard to which Bitcoin's cybercurrency will be subject.
You see, the Bitcoin protocol caps at 21 million the total number of bitcoins which can ever exist. Because 12 million bitcoins presently exist, more than half the bitcoins which ever will exist already do. All other things being equal, each bitcoin's long-term value (i.e., its purchasing power) can only increase correspondingly.
No protocol, however, caps future amounts of the official U.S. cybercurrency whose paper representations the Federal government calls Federal Reserve Notes (its junk metal representations are hardly worth mentioning). All other things being equal, consequently, each Federal Reserve Note's long-term value (i.e., its purchasing power) can only decrease as the supply of our official cybercurrency self-replicates at fiscal and monetary will each time the Federal Reserve decides to create a few more hundred billion dollars worth of official cybercurrency by buying either U.S. Treasury obligations or the mortgage-backed securities which the private banks owning the Federal Reserve don't themselves want. As well, of course, as each time those private banks themselves "lend" to you and me Federal Reserve Notes which they don't even possess (i.e., ex nihilo debt) by simply keying digital debits and credits into their electronic accounting systems in amounts limited only by a small fraction of the intrinsically valueless Federal Reserve Notes actually in their reserves.
When you multiply this by all the other central banks of all the other nations on earth doing the same with their own official cybercurrencies, the truly astonishing thing is seven billion people tolerating the valuation of their planetary labor by a Hogwartian monetary wizardry whose future prestidigitation may prove even more illusory than Bitcoin's own legerdemain.
Now how absurd is that?