Is Bitcoin An Ethical Investment?

An honest look at the world’s hottest $700 billion speculation

An honest look at the world’s hottest $700 billion speculation

Bitcoin.

It’s wildly unstable.
It has no intrinsic value.
It’s already old technology.
It isn’t a hedge against inflation.
It’s price-manipulated by whales.

And a tiny percentage of the population (mostly young white males) go absolutely mad for it.

They think it’s unstoppable, even though nations are already banning it.

They think it’s a revolutionary technology, even though distributed databases have been around for fifty years.

They think it’s going to the moon — and will pump as hard as they can to get it there.

But none of this really matters.

The key question that should concern humanity before making any resource allocation is:

Is this ethical?

Let’s dig into Bitcoin and check out the facts.

Bitcoin favors the rich

Ain’t it always the way?! Someone comes up with a good idea and the idle rich quickly swoop in to control it.

When introduced to a new technology, always ask: “Who profits?”

Today, 2% of network entities control 70+% of all Bitcoin.

Compare that to America, where 10% of households control 70% of the nation’s wealth.

Meaning Bitcoin wealth is more heavily concentrated than overall American wealth inequality — a truly low ethical bar, indeed.

Sadly, Bitcoin is just the newest form of monopoly money.

Whereas currencies are controlled by corrupt governments, crypto coins are controlled by corrupt individuals. It’s six of one half, dozen of the other.

Either way, it still requires us to choose a master.

Bitcoin has no real underlying value

We’ve lost the script on how money is supposed to work.

When currencies were first invented, they were used in marketplaces as temporary trade tokens. In the real peer-to-peer economy, people could buy and sell their bread/wine/cheese all day long, and at the end of the day, the transaction tokens went back in the box and everyone went home with their items of real value. Humans invented money to represent the contrasting value between bread, wine, and cheese, not to say that money is bread, wine, and cheese.

We shouldn’t treat transaction tokens as things of value.
Currency is a temporary intermediary that shouldn’t go up in price.

Bitboys will argue that Bitcoin has a “real underlying value” called proof of work. But what is proof of work, really? That someone spent vast amounts of computing power to mine a coin. Bitcoin’s underlying “value” is simply: Proof that someone once played an expensive video game.

Bread has real value. A loaf of bread is verifiably worth 1,500 calories. In 2010, a $4 loaf of bread cost 66 Bitcoin. That same loaf of bread is now “worth” $2.6+ million… but is it really? Or is a loaf of bread still worth 1,500 calories, and a Bitcoin still inherently valueless? It’s just a trade token.

In that sense, a $40,000 Bitcoin is a lie. And ethical people don’t lie.

Bitcoin is bad for the environment

Bitcoin is a brutal energy hog, generating 22+ million metric tons of carbon dioxide emissions per year — the equivalent of 6.7 million cars. To be clear, crypto-mining uses far less energy than gold mining and the traditional banking system, but if Bitcoin was a country, it would be the 9th biggest electricity consumer on the planet. How is hurting the planet ethical?

Yes, many miners use renewable energy and we’ll all eventually move to 100% renewable power because we won’t have any other choice, but is spending all that great eco-power on a video game really the best allocation?

Of course not.

Bitcoin now requires 130 terawatt-hours per year and rising. A terawatt-hour is enough energy to run a city of 200,000 for a year. Instead of burning green energy on verifying Bitcoin transactions, we should spend every extra kilowatt to suck carbon out of the atmosphere, 3D print eco-houses, create billions of tons of new soil, and filter microplastics out of the ocean.

That’s real value.

Bitcoin is a Ponzi scheme

Sorry, Bitboys — Bitcoin can either be a functional, stable currency or a wild story stock speculation — but you can’t have it both ways. Not many of us say we’re “invested” in $USD or $CAD or £GBP, because we understand that’s not a currency’s primary purpose.

As one commenter so rightly put it: “Bitcoin was not supposed to be a mechanism to make people wealthy. It was supposed to be an example of a decentralized currency.”

Bitcoin takes more than it contributes. In the same way that we abhor FX traders who manipulate the $USD and $CAD and crash the British pound (looking at you, George Soros), we should take the same position toward crypto pumpers — they’re bottom feeders who extract value from others without contributing anything of real value to society.

For those who haven’t yet accepted reality, Bitcoin is a giant Ponzi scheme. If the only way to make a profit is to get someone to buy your coins for more than you paid for them, you are doing something illegal.

But never mind legality — it’s also immoral. Not only will the vast majority of coin purchasers mathematically lose their money in the long run, but the longer this Ponzi scheme lasts, the more ammunition it gives governments to eventually shut it down — especially once they have their own competing coins and it’s in their best interest to do so.

We’re in a race against the clock, and as other nations get their act together like China and create digital surveillance currencies, it’s only a matter of time before all private crypto coins are banned and our personal finances are forever surveilled and controlled by corrupt governments.

Never underestimate the violent lengths to which governments are willing to go to retain power. Bitcoin’s market cap typically hovers around a trillion dollars. The USA’s GDP is over $20+ trillion, and it’s backed by the most lethal military in human history. If crypto becomes an economic Thucydides Trap, don’t expect America to roll over and die. Don’t expect any corporate-sponsored nation to surrender. Expect them to play extremely dirty.

We need ethical money

I feel bad for Bitcoin speculators. The vast majority will lose their shirts because they thought Bitcoin was an investment when it was actually just a currency. The vocal minority will continue to live with sunk cost fallacy, irrational investment bias, escalation of commitment, modern Dutch tulip mania, and eventually, with a gnawing sense that they flayed a quick profit off the hard losses of their fellow man.

But mostly, I feel bad for society. We need positive, regenerative, stable, commons-contributing, planet-supporting, people-freeing, ethical investments. Instead, we’re stuck with speculative schemes that enrich the rich and endanger the long-term wellbeing of the commons.

Our global family desperately needs an international, accountable, distributed, non-violent, non-surveilled, non-trust-based, enforceable, temporary transaction token that represents verifiable value and isn’t controlled by any private interest, government or otherwise.

We need real money again.

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