Jamie Dimon, Chairman of JP Morgan Chase Bank, stated recently that buyers of bitcoin were “stupid”. A few others have labeled bitcoin a “ponzi scheme” and a “worthless currency backed by nothing.”
Perhaps buying bitcoin after such a large increase is stupid. Time will tell. But let’s examine the fact that bitcoin is “backed by nothing.”
The dollar is backed by the “full faith and credit” of the United States government. These days, that’s worth nothing! The dollar used to be backed by gold and silver, until the full “faith and credit” people stole all that gold and silver through mismanagement of the financial system.
The United States can print all the dollars they want, and recently did during the financial crisis. Unlike the dollar, the mining of bitcoin is tightly controlled by a computer formula. There is a limit on what can be produced. The scarcity of bitcoin, driven by natural and economic production limitations, makes it have value. Just like gold. The dollar has no such limitations.
Bitcoin is completely outside the central control of any bank or government. The accounting ledger is decentralized and spread across millions of computers all around the globe. It is a global currency where the world’s goods and services can all be equally compared without the manipulation of currency traders or central banks. The dollar is only useful in the United States.
After reviewing the facts, it would seem the dollar is more of a ponzi scheme than bitcoin!