r/investingApr 28, 03:56 PM
The Absurdity of the Bitcoin Investor: Replacing Future Benefits for Past Phantoms
People who have invested enormous amounts of electricity and capital to obtain records on the Bitcoin blockchain often justify their decision by pointing to fiat money. They argue that fiat currency is also merely a record, one that exists on paper or in a bank’s database, yet people routinely exchange it for goods and services.
However, the mere fact that something is a record is irrelevant. Records are everywhere: scientific data, sports results, meteorological measurements, stock ownership, and countless others. What truly matters is what the record represents and, most importantly, why anyone would pay for it.
Imagine you perform ten push-ups and write the number "10" on a piece of paper to represent this. That is also a record. Yet no one would pay you for it because the record is useless to them; it cannot benefit them.
By contrast, consider a record of stock ownership. People pay for it because it entitles the holder to future cash flows, which is a clear benefit. The same is true for fiat money. It represents a debt within the banking system that must ultimately be repaid, under the threat of losing assets or, in the case of governments, facing sovereign default. Holding fiat is beneficial because those who owe the banks must ultimately provide goods, services, or assets to settle that debt.
As we can see, a record in and of itself means nothing. What matters is what it represents.
So why do Bitcoin advocates constantly repeat the mantra that "fiat money is just a record"? It is to divert attention from what the Bitcoin record actually represents. In reality, it represents nothing more than the fact that computers expended energy and solved a cryptographic puzzle. That is all. It is simply a record of past computational activity in numerical form, just like the piece of paper noting ten push-ups. Such a record provides no benefit to anyone, whether it reads "0.001", "10", or "1,000". This is why it makes no sense to give even a dime for it.
How, then, is it possible that people invest substantial sums in it? Setting aside the most common reason, that many have simply seen others profit, the trick is that these records are wrapped in a shiny cellophane of technical features. They are decentralized, resistant to theft, limited in supply, and beyond government control.
These characteristics sound compelling, especially to those unfamiliar with the underlying reality. But they are no different from taking the record of ten push-ups, placing it inside the world’s most expensive and secure safe, hiding it from the government, and declaring that "10" is the highest number that can ever exist. None of these measures change the fundamental nature of the record. It remains nothing more than confirmation of past activity that creates no future benefits. No matter how sophisticated the packaging, it stays useless.
In the Bitcoin world today, people are giving around $70,000 for confirmation that a computer "did a push-up." They are replacing