If anyone has ever seen “Star Trek”, they don’t seem to talk about money a whole lot.  In fact, it seems some sort of utopia where everyone’s needs are always met.  People don’t seem to work for pay, but for duty.

In reality, people have traded since the dawn of time.  Horses for wine.  Salt for spices.  You get the idea.  The barter system was always in effect.

But what happens when you have 300 oranges that are ripe and someone else has 40 pounds of rice that could keep for 10 years – and they don’t want oranges?  Uh oh…

This is the problem you ultimately have with a barter system, and money via precious metals was introduced to be that intermediary.  A shop keeper could then exchange this metal for goods, and then turn around and sell at a premium to those who might want those oranges.  Commerce became the way of the land.

For literally thousands of years, gold and silver has been money….currency.  In fact, silver in many languages translates to a word for money.  I have the gold people out there screaming from the rafters about gold!  Well, when times are tight, let’s see you take your one ounce gold eagle (worth at current rates about $1500) and buy a loaf of bread.  This is where silver is very, very handy.  One ounce of silver is worth about $17 at the time of this writing, but fractional silver like old dimes are worth about $1.20 as of this writing.  So the metals may have different uses in commerce and wealth.

Unfortunately, if you happen to have a few million dollars, it is hard to lug around thousands of pounds of silver or a whopping amount of gold on you.  Banks then come in to play to store our money, but furthermore – the banking system was then set up to exchange paper for the precious metals, making it far lighter to carry significant amounts of wealth.  We then even went into the credit system – where we signed a piece of paper promising to pay a debt.  This debt would be held with some sort of collateral.  For example, if you stop paying the mortgage on a house, the bank then has the right to take that asset back.

Over the last 100 years, all of that has gone in the shitter, honestly.  They went away from the gold system, then stopped using silver as real money in the mid 1960s.  The current currency is called “fiat”, where there’s no wealth in the currency itself – but faith in the currency IS the currency.

That sentence is pretty scary.

If I want to buy a loaf of bread today, I can use my debit card, credit card, or cash/change.  All of these things are some form of “things I have”.  The debit/credit card are electronically tied to funds that I can walk to a bank and put my hands on.  The silver I have, I can exchange for a few bucks at a dealer and go buy a loaf of bread.

But I cannot buy a loaf of bread with crypto currency.  That is problem number one.

So what is crypto currency?  The truth is, I don’t really know.  I asked myself this – and the whole reason I’m writing this is because I’m NOT an expert on it.  It was the reason I felt compelled to write this.

Things like bitcoin have been around for a bit now.  I believe the concept is that you can buy things with it and use it like people use a debit/credit card online.  But guess what?  I’ve heard about this for about 10 years now – and I work in technology – and I have no real understanding of it.  I have an advanced degree in cyber security.  And I still have no real understanding of it.

If I sat down for 3 hours and did my research, I might have a far better understanding.  Many of you might actually get me on board with this.  But it’s doubtful.  Why?

Because I shouldn’t have to need an advanced degree and three hours of research to understand money.  If I’m in the top 1/100th of one percent of the educated people on the planet, and after 10 years, I have virtually no understanding of this….

Houston, we have a problem.

“But Nate, you don’t get it….crypto is….xyz”.

That is the point.  I don’t get it.  Maybe this is a millennial thing?  Maybe a Gen Z thing?

What I also know about it is this:

10 years ago, it was pretty inexpensive.  Then it shot the moon, so to speak, and went up to ridiculous prices.  Today, I think one bitcoin is $6000.  So, let’s just say I have $10 and I wanted to have Bitcoin.  What kind of fraction of a fraction of a fraction of bitcoin will I get for $10?  Do you have any idea how bad people are at fractions and decimals?  They want mostly whole numbers.  A loaf of bread is about $2 to $3.  A gallon of gas is about $2.50.  Whole numbers with some fractional items at the end.

Now, if I went in to some “bitcoin dealer”, and I wanted $10 worth of Bitcoin, this tells me I would then own .00166666666666667 bitcoin.

  1. How does one even get bitcoin?  A dealer?  Are they regulated by anyone?  A website?  An exchange?
  2. Are they regulated by anyone?  Like, what if a dealer ripped me off?
  3. Can my friend give me bitcoin?  How?  Can they go to the bank, withdraw bitcoin, and hand it to me?  I think they have things called “wallets” that are electronic.
  4. Speaking of electronic, what happens when the power is out during a crisis.  How can I access my bitcoin to pay for bread?
  5. How can I use bitcoin to show a bank I have collateral?  Like, 10% down on a mortgage in bitcoin?
  6. How many decimals are important with bitcoin?  10 years ago, when bitcoin was cheap, saying you had 10.2 bitcoin may have been a thing.  Now, you might have to say you have 10.187945 bitcoin because you could quite easily see $10 was a pithy amount.  So – who determines to what fraction you have bitcoin?  Is it susceptible to the pepperoni slice attacks where .000000001 bitcoin could be syphoned from 2 million people?
  7. Who does and does not accept bitcoin?
  8. Does the GOVERNMENT recognize it as currency?  Meaning, can I pay my tax bill with it?
  9. Can I use it to buy my neighbor’s shotgun?
  10. Can I pass this wealth down to my children?
  11. Where did it come from?
  12. Is it susceptible to cyber attack?

The last two, as well as number 4, will be the major focus of this post.

Where did it come from?  The truth is, no one really knows.  I remember 10 years ago reading about how the founder isn’t a real person.  I also remember hearing about “data mining” where these bitcoin came from math equations, and apparently it becomes more and more difficult to produce them over time.  Like someone mining for gold, over time, the gold is harder to mine and more costly, so there’s potentially a finite number of bitcoin that can be produced.

With economics, this scarcity is now a resource which is influenced by supply and demand.  What worries most people about paper (fiat) currency is that debt isn’t a real thing if you can just print more money.  When you print more money – the scarcity of it then is trivial and the value of it goes down.  So our national debt in this country is a real problem because when you have $10,000 in the bank now, you think you have a few bucks.  And when paper currency (fiat) hits hyperinflation like in Venezuela, it becomes worthless and you have problems buying a loaf of bread for that $10,000.  Seriously.  No one wants your currency anymore because there’s so much of it, there’s no value.

This is what your $10,000 looks like in Venezuela.


But I’ll go one further.  What does bitcoin look like?  OK – cheap shot.  You can counter with asking what credit looks like.

So it essentially came from an unknown person.  And, it has been “mined” with math equations with processors.  Ever hear of quantum supremacy?  Quantum computing?  The next generation of processing power is going to blow away our current abilities.

Let me put this another way.  Gold is at like $1500 per ounce.  It is a “scarce” resource.  What happens if tomorrow, someone dug a hole and found one hundred million trillion ounces of gold in a vein?  Overnight, gold would be as common as sand.  The value of it would crash overnight.  Now, what happened if the world’s currency was bitcoin and one company came up with a new processor that could mine bitcoin 600 million times faster than any other machine on earth?  This could flood the market with bitcoin and devalue it, overnight.

Or – they could be like the diamond mine people in South Africa.  Apparently, diamonds aren’t as rare as you’d like to think – but the diamond people have stores of this shit in giant vaults and only release so many per year.  Since they cornered the market, they can then set the price on diamonds by reducing the supply – ARTIFICIALLY.

So we have a problem here:

  1. We don’t know who created it.
  2. We don’t know if there’s a breakthrough in processing that could essentially wipe out the value of bitcoin overnight

Which then leads me to the third problem here, which is security.

It’s called “crypto” currency, and uses something called the “block chain”.  Again, I didn’t dig into this much, but apparently there’s a framework or technology out there that makes this secure.


With quantum computing also comes the ability to crack any type of crypto in existence today in mere seconds rather than maybe 500 years a current super computer might take.  Let me explain this….

There is no such thing as perfect security.  Security measures make things more difficult and delay an intruder – that is all.  You also have security expenditures proportional to your valuables.  For example, you do not buy a million dollar vault to store your luck baseball signed by your childhood idle MLB player that might fetch $22 at auction.  Likewise, you don’t buy a $100 kiddy safe to store $800 million in diamonds.

Now – what happens when you have home security?  Safes?  Dogs?  You have layers of security which will delay an intruder, with enough time for yourself or law enforcement to respond and catch the bad guy.  Maybe you have panic buttons or a panic room.  Maybe you have more guns than Rambo.

What about your bitcoin?  It’s in your “wallet”.  Right?  How can you protect yourself from it being stolen by cyber thieves?  What if you purchase goods with it and the person on the other end doesn’t give you the goods?  What it someone figured out a way to pay you with “forged” crypto?  This is not government backed currency.

What security do you think exists with it?  Whatever measures you think are there, it’s possible there’s literally armies of people with advanced computing trying to figure out a way to steal it.  Or scam it.

Lastly – many people in this country, and around the world, deal with cataclysmic disasters.  There’s some key issues here:

  1. Power goes out indefinitely
  2. Resources are scarce – food, water, medical supplies
  3. Shelter is an issue
  4. Central communication is an issue


In the above picture – imagine it’s 95 degrees out.  You have no potable water.  Your house is destroyed.  Phone towers are out.  Electricity may not return for 2-4 weeks.

How is bitcoin going to help?  One could make an argument that even at gas stations within driving distance of a few miles might be open and you could use your credit/debit card there to buy gas and food/water for a few days.  You can’t do the same with bitcoin.

With this, I’m really concerned about bitcoin.  I had heard someone say that “bitcoin may be a rough draft for future crypto currencies”.  Yikes.

$6000 per bitcoin?  I’d say at this point, it is a speculative “investment” that maybe, MAYBE over another 10 years becomes more accepted.  If you go to the gold and silver websites, many of them do take bitcoin.  So, in theory, you could exchange your bitcoin for gold, then turn around and exchange your gold for cash.

In my previous article, I discussed silver and gold – but I’m concerned also about the devaluation of fiat currency at the moment.  I feel there is so much debt now that the only way they can survive the debt is to print more money.  At what point do other countries stop using US currency?  At what point does inflation hit us hard – what happens if faith is lost in the paper money?  These are FAR more pressing issues than if you should invest in crypto currency.

I feel that a much better investment with your current fiat money is not to put it into a speculative currency that may be a rough draft – that no one understands – and no one can buy a loaf of bread with – and put it into metals.

Maybe in a few years I’ll get on board with crypto.  Maybe I’ll spend 3 hours on a Sunday really looking into it.  For now – I just don’t get it.  And if I don’t understand it, how would my parents?  My in-laws?  My family over 60?  Over 50? Hell, I kind of get it, and I’m 44.

I feel that until governments back this, it’s a currency destined for failure.  And “faith in currency” is the entire basis of the fiat system.  People don’t realize that crypto is an extension of fiat.  The derivative, if you will – where people don’t realize the confidence in the basis of the fiat system – the US dollar – is getting printed faster and faster daily.

Until spending is put under control in this country, the confidence in the value of our fiat system is waning.  And you don’t built a 12th floor on top of a shitty foundation.  You fix the foundation.

The only way I see crypto working is if it is backed uniformly by metals.  Everywhere.  But that also has the problem of the cyber security aspect to it.  Someone walks into a gold/silver dealer with 4,000 bitcoin and walks out with 16,000 ounces of gold before anyone realizes they’ve been had by a scammer.  The same could be said about counterfeit money, but in that respect, if you counterfeit US money, the secret service gets involved and you face serious prison time.  Not the same with crypto.

“Something is only worth what someone is willing to pay”.

Growing up, my family might find reasons to hold on to things.  My brother and I would see junk that would cost us to pay someone to haul away, while another relative might covet the year it was made and talk about it like it was treasure.  The main problem you have here is the dichotomy between people who see junk versus someone who sees inherent value.  There’s no real in between.  Furthermore, that “treasure” is not worth anything until, and unless, you can find a buyer who potentially values that as much as you do.

And THAT is the problem with crypto.  Those who are really into it are a niche group who see value.  The rest of us see something that may have some use, but no special value.