Cryptocurrencies: the monument to human folly

In 2008, an anonymous person using the alias Satoshi Nakamoto came up with an idea: they would write a computer program to generate digital tokens. There was nothing special about these tokens.

You cannot see them, you cannot touch them. There is nothing physically tangible you can do with them. In fact, they are so useless that the program merely displays their amount. Unlike fiat money—which is created as debt and therefore useful to debtors for repaying that debt—these tokens are not created as someone’s legal obligation. They are tied to no one and represent nothing. Thus, they are useless in every practical sense.

But even if, for some unknown reason, someone might need such tokens, they could simply create their own. It’s easy. All they need to do is the same thing Nakamoto did: write a program and set it to produce tokens in any amount they desire.

This raises the critical question: if the tokens are so useless and easily replicable, why would anyone offer them to the public? Only one answer makes sense: to exchange them for something useful. Think about it—if you could persuade people to believe in the importance of these tokens, you could trade them for tangible goods, labour or money. You could get something for nothing.

But people won’t just hand over useful things for no reason. So, you have to convince them that what you’re offering is extraordinary. You need a story, something compelling. So, you tell them that you’ve invented a new form of money. Not just any money—a revolutionary kind that will free them from the banks and empower them with financial independence.

But here’s the trick: what you’re offering is not money. Why? Well, because money is something useful. Throughout history, money has always been something with a purpose outside of trade. Cows, tobacco, metals, salt—all these things were useful in their own right. Even fiat money has a purpose outside trade: it’s created as debt and used to settle that debt. Every day governments and millions of people use it to repay bonds and loans that created this money. This is the basic principle of offering something to the market: it must have some use outside the market. Otherwise, what are you offering to the market in the first place?

Nakamoto's creation breaks this principle entirely. It offers nothing outside the system that trades it. It is a closed loop, a program that generates digital tokens and tracks their amount. These tokens cannot be used for anything. They exist solely to be traded within the illusion of their own network. So they are not money. Yet, the narrative of "revolutionary money" tricked people into believing otherwise.

But it did not stop there. To make Bitcoin appear even more revolutionary, the concept of the blockchain was introduced—a decentralized ledger touted as a game-changing innovation. On the surface, the idea of decentralization sounds impressive: a database managed collectively rather than controlled by a central authority. But the devil is in the details.

A ledger, decentralized or not, is only as useful as the information it holds. Traditional databases store business transactions, legal records, scientific data—things with practical relevance. Blockchain, however, stores records of digital tokens, tokens that have no use or representation outside the system itself. What Nakamoto introduced was a circular system: a ledger to record the movement of tokens whose only purpose was to exist within that ledger.

Despite its lack of practical application, the story sold. The promise of liberation from banks, freedom from centralized control, and financial independence was alluring. People wanted to believe they were part of a revolution. They began to trade real money, goods, and energy for these digital tokens. What Nakamoto had unwittingly created was not a scam but something far more dangerous: a narrative so compelling that it blinded people to its underlying absurdity.

And then, the real exploitation began. Seeing how easily people were drawn into the illusion, others realized they could replicate the process. If people were willing to exchange tangible resources for something as abstract and purposeless as Bitcoin, why not create more such illusions?

And so they did. Thousands upon thousands of cryptocurrencies flooded the market, each with its own twist on the same baseless promise. Some promised faster transactions, others greater privacy or additional features. But fundamentally, they were all the same: digital tokens existing only to be traded. None of them offered any practical use outside their ecosystems.

The brilliance—or, rather, the tragedy—of this system lies in its ability to perpetuate itself. Once people invest their time, money, and energy into something, cognitive dissonance takes over. Admitting they were wrong would mean acknowledging the loss of their resources and their trust. So they cling to the story, evangelize it, and draw others in, not out of malice but out of desperation to justify their own decisions.

This cycle of naivety and stubbornness became the lifeblood of the cryptocurrency market. What Nakamoto started as a misguided attempt to redefine money spiraled into a global phenomenon that capitalized on human gullibility. People traded real, useful resources for illusions because they wanted to believe in the narrative.

Cryptocurrencies, then, are not merely a financial experiment. They are a monument to human folly—a system born not out of malice but out of collective misunderstanding, nurtured by opportunists, and sustained by the refusal to admit error. Bitcoin may not have been intended as a con, but it has become the ultimate testament to people's willingness to give something for nothing, to chase phantoms and call it progress.