There is a lot of media attention of late around Elon Musk buying Twitter. And of course, crypto stuff is in the headlines a lot as always, with the ups and downs. I see the value of Twitter was not as high as I would have thought, considering all the hype. And then, out of curiosity I looked on Google a bit more and the value of all the Bitcoins out there was also not as high as I had imagined. Considering the move Elon just made, a few eccentric billionaires could pool together and buy all the Bitcoins. Makes no sense to do that though, but it is possible, in theory.
The thing about buying up all the shares in a company is that there is an underlying value in a profitable business. But Bitcoin is not a business. It is a virtual currency. So buying it all up makes no sense. But I just had this mad thought that it could be possible. Does make for an interesting debate. The reason I compare Bitcoin to shares in a company is that people talk about Bitcoin like it is equity in the stock market. It is traded like a public company share. And yet, there is no company. There is no governance. There is no rule of law. There is just this faith, and of course hype, and a massive bunch of electricity consuming computers.
Money is a religion to so many people and the goal of the greedy is to hoard as much of it as possible. So in US Dollar terms the aim is to get all the dollars, or as much as they can. Shouldn’t this be the same then with a virtual currency. People who have a lot of Bitcoins seem to enjoy having others know this, like they are in some very proud club. So then surely, with the same logic, the aim is to have as many Bitcoins as possible. But not all the Bitcoins, right? Because if you managed to buy up all the Bitcoins then would they have any value at all. I mean, if you were the only person that had them then doesn’t it mean that they become useless. This is confusing me. But there is something to this.
I am just having some fun here, thinking out loud. Yes, I know that no one would buy up all the Bitcoins, even though again it is theoretically possible. But if there are no Bitcoins being utilized, because only one person has them all, then don’t they becoming meaningless? So this is a very strange scenario. Get as many as you can, but not all of them.
Here is something else to think about: Let’s say you buy a home, say, 20 years ago, for a million dollars. And today the house is valued at 2 million dollars. So you get a mortgage on the house for a million dollars and you spend it on cars, travel, etc. You don’t pay tax on the million the bank gives you, at almost no interest, because, well you are privileged or rich or whatever the word is.
So the rich lending money, at almost no interest, rarely sell assets or equities, and keep on living large, and pay the minimum of tax. This is all legal and the way the system works. But the poor have no assets, no collateral and so pay a risk premium every time. And they often borrow from micro lenders and pay HUGE interest, simply to get groceries each month.
Something has to give.