The parasitism and decay within the economy is so pronounced, pay-the-rich schemes and scams have become normal and officially acceptable. In this regard, Bitcoin has begun trading on the “legitimate” Chicago Board Options Exchange and the Chicago Mercantile Exchange, giving it credibility, or so the people are told.
The Bitcoin speculative surge reflects how degeneration has seeped into every pore of the imperialist economy. Those who buy bitcoin to circumvent the stranglehold of the banks or U.S. dollar, beware. The rich are quite happy and eager to seize money-value without work or having any workers produce, distribute or circulate actual commodities.
The work-time of the working class puts value in commodities. If the market price of a commodity goes greatly above the price of production representing the value workers put into a commodity, then value must come from other commodities through a reduction of their market price or otherwise cause disruption in the economy. This follows the basic economic law that what workers have not produced cannot be consumed.
Bitcoin is said to be operating as a medium of exchange. Virtually any commodity can act as a medium of exchange if enough people recognize it as such. That is not the issue with Bitcoin or any of the other numerous digital currencies competing to be used and traded.
The problem stems from the aim of the imperialist economy for the highest possible profit on all transactions and to pay the rich regardless of the social and economic consequences. The imperialist aim has led to the current extreme concentration of social wealth in the hands of a few. The economy has degenerated into parasitism, decay and recurring crises throughout the world rather than mobilizing the incredible productive powers of industrial mass production to guarantee the well-being and rights of all. The imperialist aim is consumed with empire-building and waging endless predatory wars to dominate all humanity.
Bitcoin and other digital currencies may act as means of exchange but for the rich the point is to use it to make money for nothing, to push up its speculative value so that those who buy it or created it in the beginning will become rich beyond their wildest dreams. It represents a world gone mad with becoming rich through speculation and war.
Bitcoin acts like a Ponzi pyramid scheme on digital steroids. As long as people continue to put money into a Ponzi scheme or continue to buy Bitcoins at the price demanded, the scam will persist. But Bitcoin’s speculative value only exists if the buying continues. As long as people are willing to buy it and a certain hype around it remains then many people will believe in the phenomenon because the imperialist outlook is pervasive. When the buying stops for whatever reason, including state regulation forced by a certain section of the rich who want to rein in the competition for available realized value, and the faith begins to fade, people will cash out, demanding the current inflated speculative amount — which no one will want to pay — collapsing the bubble.
The money-value will evaporate similar to a run on a bank as people pull out their money in panic. The actual amount in the bank’s vault is far less than the amount people are owed because ten or a hundred times the total of their accounts has gone out the door in loans that cannot be called back because the money has been spent to be returned only little by little over time.
For imperialist schemes to persist, they rely heavily on hype and acceptance of the outlook and aim of the economy for the highest possible profit and to pay the rich. Official hype comes in the form of state-sanctioned institutions such as the Chicago exchanges and media promotion.
The Bulgarian government announced recently that the Bitcoins it apparently bought a while back now hold enough speculative money-value to pay down one-fifth of its national debt when cashed out. It is a risky venture because the value a Bitcoin represents when cashed out, if people are willing to buy them, has to come from somewhere in the productive economy, a value workers have produced through work-time transforming the natural bounty of Mother Earth into the use-value of a good or service. The Bitcoin speculative value may move from hand to hand as they are bought and sold and new ones are “mined” but they cannot increase the initial money-value that was put into them. Any increase when cashed out and used to purchase commodities must come from value workers have produced, thus decreasing or robbing value from somewhere else in the economy. To repeat a well-known fact: What workers have not produced cannot be consumed.