A person could, of course, at least in theory, purchase a huge percentage of a given cryptocurrency. Many observers of the markets think this already happens, especially in the tokens other than the big five or so, but even then. So what? What if one person owned every single bitcoin in existence, or at least every bitcoin that is currently being traded? What would they be able to do? As far as I can tell, absolutely nothing, beyond selling them to other people or crashing the market, thereby losing much of whatever money the person had used to buy up the bitcoin to begin with.

David Golumbia on imaginary value.

An interesting primer on cryptocurrencies, comparing them to actual currencies and to shares. It walks through the basic concepts of what both currencies and shares actually are—stripped free of all the libertarian market-worship nonsense—and considers whether cryptocurrencies meet the definition of either.1 It also describes the concept of market cap, and why it’s nonsensical to talk about it in the context of cryptocurrencies (see quote above).

Given that Golumbia is the author of the right-there-on-the-tin The Politics of Bitcoin: Software as Right-Wing Extremism, it’s not like the guy doesn’t have a horse in this race, and you can make some arguments that he glosses over the potential technical benefits of blockchain—as distinct from cryptocurrencies per se—particularly as they might relate to being implemented in an existing, regulated financial structure. Which… okay. Fine. But if the question is less about that and more about, “Is bitcoin an investment?”2 or “Should I use it to buy a pizza?” then the answer is a very definite, “A-har har h— oh you’re serious. Then no.”

  1. Spoiler alert: they don’t, in the former case because they’re too volatile, and in the latter because that volatility doesn’t actually relate to anything other than, like, some kind of weird techbro popularity contest. []
  2. And the year isn’t, like, 2010. []