All “cryptocurrencies” based on artificial limits are inherently pump-and-dump schemes. If they were true free market currencies, the money supply would grow with demand. Instead, they are artificially restricted. Why? To create the illusion of limited supply and therefore expectation of future scarcity and speculative profit.
They are fiat currencies, based on nothing but this speculation. The Bitcoin price chart shows this. Bitcoin fanboys point to the skyrocketing price as a badge of honor, but all it shows is that it is a speculation, not a store of value. It has no price stability, and cannot be considered a “currency”.
In the short term, the price will keep going up for various reasons. Mining is getting more expensive and less profitable, driving out miners and restricting supply. Use as a pseudo-anonymous money transfer scheme is increasing on the dark web. A method of circumventing Chinese capital controls. An investment vehicle for Chinese with not enough local investment options.
But eventually, people will realize NOTHING holds up the value of Bitcoin. No petrodollar, no USG taxation. And it will collapse, as will the rest of the currencies that will inevitably fork off this one. This is even ignoring the major security and regulatory issues that plague Bitcoin.
Currency is a form of social credit. It’s an implied debt, that someone will pay off with goods & services in the future. This should be the basis of any cryptocurrency, not arbitrary and artificial limits on supply, and fancy math for its issuance.
