CRYPTO CYBER MAGIC: NOW YOU SEE IT, NOW YOU DON'T

 

CRYPTO CYBER MAGIC: NOW YOU SEE IT, NOW YOU DON’T

 

What started out as a lark by some youngsters has turned into a serious money making scheme.  You take a bunch of numbers and call it a crypto wallet and see if people want to use it, instead of cash.  Invest in something totally speculative, a grouping of numbers, which has no real value or backing, and see if it will sell.  Low and behold, in record time speculators around the world hyped it as the financial tool of the future that could make banks and currencies redundant.  A money market totally controlled by whatever values investors want to attach to it.  Another gizmo in the betting circuit that appears to be replacing stocks and real assets.

Don’t get me wrong.  Currency speculation is as old as when money was first put into use.  There is always someone willing to take a risk on a currency exchange.  Cash has to be backed by assets and assets can rise or fall in value.  Risk has its own rewards.  The downfalls, well, we’d rather not extoll our losses and foibles as something to be proud of.

Crypto currencies took off for several reasons.  That crypto wallet you purchased is virtually invisible because it thrives in a virtual world.  With the push of a button from your cellphone or tablet you can make crypto money disappear into cyber space and park it anywhere in the world well away from prying eyes; like governments and tax collectors.  There is no central bank, no rules, no oversight, no transparency and therefore no controls.  No regulations whatsoever.  The Wild West of money making.  Of betting, of gambling! 

Anonymity.

This is the ultimate financial Ponzi scheme and you can either strike it rich or you go for broke.  Crypto is for anybody with extra cash to squirrel away and who loves to gamble.  Criminals love it even more.  You no longer need to hide and transport suitcases filled with cash and above all, crypto transactions take place far away from the prying eyes of the law.  The ultimate in discretion and anonymity.  Out of reach, out of sight.  It doesn’t get any better.  No chainmail letters to post and enticing neighbors and friends to participate in a quick, get rich scheme.  Just you and your wireless gadget and off you go. 

Can you imagine creating value out of nothing, just a bunch of numbers, and raking in millions and even billions of dollars in cash.  Yes.  Cash.  You don’t buy crypto with crypto.  Those greenbacks you earned will happily be exchanged for your very own crypto wallet.  Thus far, who has made the biggest bucks?  All the people who got in on the bottom and who couldn’t believe their eyes how it took off like a rocket.  The originators behind the crypto madness will without a doubt hold on to some of their currency, but you can bet your booty that they will have cashed a lot of it in for some real assets; like gold, land, properties and stocks.  And . . . greenbacks!

Bye, bye.  Now you see it, now you don’t.  It’s magic.

Crypto fever has attracted a lot of attention and those specializing in scams, fraud, hacking and extortion absolutely love it.  That wallet they took from you will be travelling from one destination to the other and vanish just like that.  Virtually untraceable and as the trail goes cold, fraud investigators will throw up their hands in despair.  There is no global mechanism to pursue crypto crooks.  Criminals can hide behind friendly borders and some are even encouraged and protected by certain nations because it serves their national interest to keep up political divisions and spheres of influence.  Political mayhem.  Cyber sabotage.  Cyber theft.

And crypto is not free.  Hefty fees are charged for a crypto wallet purchase and for transactions.  The servers that monitor activities, transactions, crypto values and security are expensive to run and maintain.  Which begs the following question.  Who runs these things?  Where are they?  How safe is it?  They’re not exactly advertising their presence and location.  Therefore, when things go really wrong, who are you going to call?  Ghostbusters?

Too good to be true.  When it comes to our intentions we’re highly questionable creatures.

I put crypto in the same league as the development of weapons of mass destruction, nuclear bombs and the dark net.  Lots of good intentions, but a bad outcome.  We’re absolute great at inventing things that end up biting us in the ass.  There is so much inflationary cash floating around that dropping a few billion into crypto is but a drop in the bucket for the big gamblers and investors.  Worst come to worst we will just keep printing more paper.  Inflation is something the masses get stuck with time and time again.  Don’t expect the Super Rich to drop some of their wealth to stabilize economies and currencies.  We’re always the go-to-source when it comes to the shenanigans of the wealthy.  They can’t seem to lose!

Real cash is not what it used to be.

The whole notion behind crypto is not as farfetched as it seems.  Cash has already been replaced by debit and credit transactions although it is regulated along conventional lines through banks and government oversight.  Real cash in your wallet is for small purchases and for old times’ sake.  Life is getting too complicated when it comes to large purchases and what we end up with is paper transactions; money shuffled around, from buyer to seller.  Easy and mostly safe.  Money is no longer backed by real assets, just a very small portion.  We are basically issuing promises.  Dealing in good faith and hoping that everyone honors their commitments; borrowers and lenders.  Credit really loosened things up in the borrowing and spending department and for the longest time we have been turning a blind eye to the growing mountain of government debt and deficits.  And let’s not leave out consumer debt.  I have a sneaky suspicion that none of it is going to be paid down anytime soon.  We’re making a lot of promises: ‘by 2029 we will balance the budget.’  This is a line I have heard so many times in my long life that I have stopped shaking my head.  It’s a shaky truce that hangs in the balance between governments and banks.  To stay solvent there has to be a level of trust.  Value is all about relevance.  In ancient Rome grain at one point was more valuable than gold.  When you’re really hungry and no grain is to be had, who cares about those gold bars you’ve tucked away.  That’s where the relevancy part comes in.

Crypto has become relevant for all the wrong reasons.  The people who really love it are those who don’t want any controls or oversight.  They don’t like regulations because it would expose them.  The only reason why some banks and some nations want to get in on the act is rather altruistic.  On the upswing crypto is a lucrative bet and when it goes down, well, there is always that willing victim called the masses who will have the losses tacked on to the national debt and since banks only accommodate transactions, well, it will be the buyers who are on the hook.

In the world we inhabit, the privileged few always want it their way.  Some people have way too much money, some can’t get enough of the stuff and then there are the legions who don’t have any and they will do anything to get some, even if it means stealing and extorting.  And then there are the legions of sellers and accommodators who will take their cut, modest, but risk free.

Our world is filled with too many bad actors.  We lie a lot.  Fraud and corruption are on the rise as the world economy is on shaky grounds and too many things are going wrong.  It only invites more bad actors.

Darn, I wish I could find a hopeful topic, one filled with happiness, sunshine and brotherly love.  Perhaps I could make one up.  If a bunch of youngsters can hoodwink the world with imaginary currency, I should be able to come up with a good yarn.  Be on the lookout.

As an aside, the day I wrote this article Bitcoin went into a freefall.  Cynical me.  I suspect that the selloff was orchestrated by those who can afford to lose a bit and buy back low.  Weeding out all the little suckers who can’t afford to lose a dime.  Sigh, such is life.  Not unlike chainmail letters they’re just sending out feelers to the next batch of suckers who want to get rich quick.

Nothing is forever and that includes little me.

In the meantime, feel free to comment and share.  And let’s face it.  We all have something in common with crypto currency: here today and gone tomorrow; now you see me, now you don’t, and we can’t even put it down to a magical disappearing act.