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  • Writer's pictureGerard Kavanagh

Ubiquity and Utility

Today we are going to look back at a recent very lengthy blog commentary when we shared a more than a year-old treatise on BTC by Ben Hunt of Epsilon Theory, in which he predicted BTC would become just another gaming table in the "wall street" casino. Ben Hunt, who was a long-standing fan, believes that has already happened. To refresh our minds: "The price of Bitcoin was the madness of crowds. The price of Bitcoin had no connection to any fundamental economic activity, just like gold had no connection to any fundamental economic activity, and thus – to this audience – could have no inherent value by definition. I think this is very wrong. And I’ll tell you, like I told this Zoom call, why I think there is a lot of inherent value in Bitcoin. Because Bitcoin is good art. Or better yet, because Bitcoin is elegant and beautiful fashion, sitting at the intersection of art and commerce. Most importantly, because owning Bitcoin has been an authentic expression of identity, an extremely positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy. I’ve been saying that Bitcoin is art for more than six years, from The Effete Rebellion of Bitcoin (Feb. 2015) to Too Clever By Half (Feb. 2018, my most popular note ever!) to Riding the Cyclone (June 2018) to The Spanish Prisoner (July, 2019), and it’s been a very frustrating place to be. Frustrating because public stances on Bitcoin are almost immediately turned into cartoons – either you’re the grumpy grandpa “Bitcoin is worthless!” cartoon or you’re the laser-eyed cultist “Bitcoin will be the world’s reserve currency!” cartoon, with no room in between. The value-deniers, like the Zoom crowd the other night, think I’m agreeing with them when I say that Bitcoin is art. I’m not. The true-believers think I’m trolling them when I say that Bitcoin is art. I’m not. The creation of good art is – in my opinion – what we are put on this earth to do. It is our highest calling. It is my highest praise. There is lasting value in good art, because it is a very scarce thing and it never gets used up. Bitcoin is itself an NFT, a unique digital art work instantiated on a blockchain. It’s the most valuable NFT in the world. I don’t mean a Bitcoin, obviously that’s a fungible thing. I mean THE Bitcoin … the 21 million Bitcoins that make up the Bitcoin Project. The notion that Bitcoin would ever “go to zero” is ludicrous. Good art is always worth something. But how do we measure that something … how do we put a price on the value of good art at this particular moment in time? It’s a REALLY tough question. There are no cash flows to art. There are no fundamentals to art. There is no “use case” to art. There is only story. There is only narrative. There is only common knowledge – what everyone knows that everyone knows – about the value of art, common knowledge that emerges from our social interaction with story and narrative." Cool, it's a store of value - the ultimate NFT - we can all understand that. Ben then goes on to denigrate what he saw as potentially happening (and subsequently has): "In my dystopian vision, Bitcoin isn’t banned or criminalized. Pfft. That’s a rookie, weak State move. No, I see a future where everyone buys Bitcoin. Where you are encouraged to buy Bitcoin. Where Bitcoin is sold to you morning, noon and night. Where normie economists get on conference calls late at night because they’re Bitcoin price-curious. Except it’s not really Bitcoin. Instead, it’s Bitcoin! TM — a cartoon version of the OG Bitcoin, either a Wall Street-abstracted representation of the price of Bitcoin or a government-painted version of Bitcoin in Dayglo orange. Either way — abstracted or painted — your Bitcoin! TM is trackable and traceable, fully KYC and AML and FBAR and SWIFT and every other US Treasury acronym-compliant. Either way, your Bitcoin! TM has all the revolutionary potential of a bumper sticker and all the identity signaling power of a small tattoo on your upper arm." And this is where Ben blasts this version of BTC:

"Bitcoin! TM doesn’t stick it to the Man … Bitcoin! TM IS the Man. Welcome to the MMXXI Hunger Games. The abstracted version of Bitcoin! TM is a Wall Street specialty. What is Bitcoin! TM in abstracted form? It’s a securitization or representation of Bitcoin ownership that promises the price appreciation of Bitcoin without the hassle of Bitcoin ownership. It’s a casino chip that represents the price of Bitcoin. Michael Saylor, for example, is only too happy to sell you a MicroStrategy casino chip. Or maybe you’d prefer to play on the Canadian crypto ETF felt? Or try your luck at the wheel of a Morgan Stanley private fund? Why does Wall Street loooove abstracted forms? Because there are no fundamental limits to how many of these Bitcoin! TM casino chips Wall Street can sell. It doesn’t matter if all the OG Bitcoin HODLers keep on HODLing. It doesn’t matter if the vast majority of all the Bitcoins ever mined never get caught up in the Wall Street neutering machine. There are an infinite number of games that can be created around the price of Bitcoin as a reference point, just like there are an infinite number of bets that can be made on a football game. There are an infinite number of rehypothecations and derivative representations that can be made off the millions of margined Bitcoins that have already been captured by Wall Street-custodied accounts.

The only limiting factor on how many of these Bitcoin! TM casino chips Wall Street can sell is the effectiveness of the narrative they have created around Bitcoin itself, that Bitcoin is a “hedge against inflation” and a “store of value” that is uniquely positioned to “protect your portfolio” against “dollar debasement” because it is “hard money” immune to “money printer go brrrr”. It’s rather artistic in and of itself, right? Selling an unlimited number of Bitcoin! TM casino chips off a meme slamming unlimited fiat money printing? Creating an unlimited number of entertaining market games and venues where we can use our Bitcoin! TM casino chips? If these narratives and casino games sound familiar, it’s because this is exactly the same process of abstraction, securitization and leverage that Wall Street has been using for the past twenty years with precious metals." Prof Scott Galloway says: "NFTs offer digital commerce something the Internet lacks: scarcity and authenticity." Allowing BTC to become just another wall street chattel undermines and actively seeks to destroy what BTC is, or that is my understanding of Ben Hunt's comments. The system has won, it has consumed the renegade state. It is the Godfather 3 moment when Michael Corleone says: "Just when I thought I was out, they pull me back in!" Back to Ben Hunt: "You think “institutional adoption” is driven by a spirit of personal autonomy, entrepreneurialism, and resistance to the Nudging State and Nudging Oligarchy? You think Paul Tudor Jones and Mike Novogratz want to BITFD? LOL. The ONLY difference to Wall Street between gold and Bitcoin is that gold! TM is tired and Bitcoin! TM is wired. The king is dead. Long live the king! This is the artistic genius of Wall Street – the creation of new product to trade and new assets to manage, all through the alchemy of securitization and leverage. This is Flow. This scribbler has no argument with that assessment and it is a process begun (if not achieved). However, FIX00 project would argue there is another side to this and a way to cling to independence, autonomy, entrepreneurialism, and resistance that is the essence of the cryptoverse. In simple terms beat the fiat world governments/treasuries and Wall Street (The MAN) at their own game. As Raoul Pal and Mark Cuban, to name but a few, readily acknowledge BTC is not a cryptocurrency (they are equally disparaging about Gold btw), it has a minuscule and finite issuance, and it can never fulfill that role - arguably that is what has invited wall street into our territory to "fix" this! As a paid-up member of Wall Street inc for 30 years (before exiting) this scribbler can assure you that you will have honey poured into your ears as their hands rummage through your wallet and push you in the direction THEY (not you) desire. And you won't even realise what is going on till it's too late. Back to Prof Scott Galloway: "Scarcity and authenticity are powerful, and not always forces for good. Our instinctual craving for scarce sugar and fat has produced an obesity crisis, but we aren’t going to throw out the industrial food system and live off the land. Amidst the scams and bubbles, credible scarcity and authenticity will unlock real value in digital markets." Being mindful of how quickly The Man shut down Zuckerbergs Libra as a currency (think the authorities don't realise how dangerous an autonomous currency threat to their world is - they very much do). They shut Zuck's Libra as a currency down in a week! We would suggest there is an alternate route, one that straddles both the real and digital worlds, and one that WE not they can control. A crypto entity that offers ubiquity and utility. We think the FIXOO project - offering digital forms of real-world rubies (time-honoured stores of value) in a fractionalised form (F-NFTs), addresses some of the shortcomings of BTC. The offering is effectively asset-backed (without ever falling into that nettlesome issue with regulators regarding being a security) The issuance is finite, but it's fractionalised (as in 10's of billions - potentially). It is not for FIX00 to determine, it is for the cryptoverse to decide - but our offering has scarcity and authenticity (and there will be an artistic side to this), but unlike BTC it will also have ubiquity and the potential for utility. The difference is it will be a creation of the cryptoverse as opposed to a wall street diluted version. This could be the start of something new .....

For a short overview of the FIX00 project 🙂 please use this link: The Start of something new

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