u/BinaryLyric

When Bitcoin was introduced as a decentralized way to store data in a manner that prevents tampering or loss, its creators claimed that the data it stored was financial in nature. They referenced financial institutions and even asserted that Bitcoin solved the problem of trust that leads to crises in those institutions.

Yet financial data tracks obligations and corresponding claims, which do not exist in the Bitcoin system. Some later decentralized systems, such as Tether or PayPal USD, do contain financial data because they track claims on issuers who promise to redeem them for dollars or PayPal balances. Even so, they do not solve the problem of trust. Users must still rely on the issuers to honor those claims. Financial crises occur precisely when claims are not honored.

No financial crisis has ever resulted from central securities depositories, banks, or electronic money issuers tampering with client data. Crises have arisen because companies issuing stocks went bankrupt, banks extended too many bad loans, or e-money issuers became insolvent. Centralized data storage or poor recordkeeping was never the root cause.

Therefore, even if Bitcoin stored financial data, it could not prevent or resolve issues related to financial crises. In reality, Bitcoin stores only computational performance data.

Computers operated by Bitcoin miners solve cryptographic puzzles. The more puzzles they solve, the higher their score becomes. It is this score that the Bitcoin system records and transfers. In effect, miners solve puzzles in order to store the scores they receive for solving them. The entire system is circular: it generates data solely to track its own activity. It is a useless loop.

This differs sharply from useful performance data. Consider a gym that starts tracking how many push-ups its members complete. Such data could serve practical purposes: monitoring fitness progress, boosting engagement, analyzing behavior, or supporting marketing and health initiatives. It would make sense to pay for access to that information, and buyers would acquire the complete dataset.

In the case of Bitcoin, however, a global audience has begun a bidding war for chunks of its useless data. Early on, one person traded two pizzas for 10,000 BTC, which equated to roughly $0.001 per BTC. Today, people pay around $80,000 for the same unit. Acquiring the original 10,000 BTC chunk would now cost approximately $800 million.

The irrationality of this becomes clear when we examine why people pay to hold financial data.

In financial systems, holding bigger numerical data related to stocks or fiat currency justifies greater payment or labour because it represents a larger claim. Stocks represent claims on a company’s future cash flows. Larger holdings mean larger dividends or liquidation proceeds. Fiat currencies represent claims on bank borrowers. Because currency is issued as loans, borrowers must work, produce goods, or provide services to repay those loans and protect their collateral. If borrowers default, banks honor the claims by selling the seized assets. In both cases, a larger number entitles the holder to more future utility.

In Bitcoin, however, people pay more simply because the protocol assigned a higher score to a useless computational performance.

This cannot last. In the long run, no rational person would surrender even the smallest claim on future utility in exchange for data recording meaningless past activity.

Kada je Bitcoin predstavljen kao metoda za pohranu podataka na decentraliziran način koji sprječava neovlaštene izmjene ili gubitak, tvrdilo se da su podaci koje pohranjuje financijske prirode. Koristili su se termini poput "elektronički novac" i spominjale su se financijske institucije. Čak se tvrdilo da Bitcoin rješava problem povjerenja koji uzrokuje krize u financijskim institucijama.

Ipak, financijski podaci se u osnovi odnose na obveze i pripadajuća potraživanja, koji u Bitcoinu ne postoje. Iako neki decentralizirani sustavi koji su se pojavili nakon Bitcoina, poput Tethera ili PayPalUSD-a, sadrže financijske podatke jer predstavljaju potraživanja prema izdavateljima koji ih moraju otkupiti za bankovna ili PayPalu salda, to i dalje ne rješava problem povjerenja. Korisnici i dalje moraju vjerovati da će izdavatelji biti sposobni ispuniti ta potraživanja. A financijske krize nastaju upravo zbog neispunjenih potraživanja.

Nijedna financijska kriza nije se dogodila zato što su središnji depozitoriji vrijednosnih papira, banke ili izdavatelji elektroničkog novca neovlašteno mijenjali podatke klijenata. Krize su se dogodile jer su tvrtke koje izdaju dionice bankrotirale, banke izdale previše loših kredita ili su izdavatelji e-novca postali nesolventni. Centralizirana pohrana podataka ili loše knjigovodstvo nikada nisu bili problem.

Dakle, čak i da Bitcoin pohranjuje financijske podatke, on i dalje ne bi mogao riješiti ništa vezano uz financijske krize. U stvarnosti, Bitcoin pohranjuje samo podatke o računalnom učinku. Računala kojima upravljaju takozvani Bitcoin rudari rješavaju kriptografske zagonetke, a što više zagonetki riješe, dobivaju veći skor. Upravo taj skor je ono što Bitcoin sustav pohranjuje i prenosi. Kada platite da se 1 BTC prenese na vašu adresu, vi zapravo kupujete dokaz da je neko računalo u prošlosti potrošilo energiju i riješilo zagonetku. To očito nema nikakve veze s financijama.

Ipak, globalna publika prihvatila je financijski narativ koji okružuje Bitcoin. Vođeni lažnim uvjerenjem da je decentralizacija revolucionarno rješenje za financijske probleme, investitori su počeli ulijevati kapital u mrežu, nesvjesno čineći oblik financijskog harakirija. To je zato što razmjenjuju potraživanja i dobra koja pružaju buduću korisnost za običnu potvrdu o prošlom računalnom učinku.

Ovo samouništenje najočitije je kada ispitamo logiku skaliranja. Ako osoba kupi 1 BTC, plaća, recimo, 100.000 dolara. Ako druga osoba kupi 10 BTC, plaća deset puta više, odnosno milijun dolara. Općenito, imovinu plaćamo deset puta više jer očekujemo deset puta veću buduću korisnost. Razmotrimo nekoliko primjera.

Dionice predstavljaju potraživanje budućih novčanih tokova. Kada platite deset puta više da biste stekli 10 dionica umjesto 1, dobivate mogućnost primanja deset puta većih dividendi ili sredstava iz likvidacije.

Fiat valuta predstavlja potraživanje prema bankovnim dužnicima. Kada, na primjer, radite deset puta duže kako biste dobili deset puta više valutnih jedinica, dobivate deset puta veće potraživanje. Budući da se valutne jedinice izdaju putem kredita i vezane su uz kolateral dužnika, dužnici, da bi vratili dug i spasili kolaterale, moraju raditi više za vas, ili dati više proizvoda i usluga, ako posjedujete više tih jedinica. Ako oni ne ispune obveze, same banke moraju ispuniti potraživanje, a što više jedinica posjedujete, više zaplijenjenog kolaterala možete primiti putem bankovnih aukcija.

Izvan financijskog svijeta vrijedi ista logika. Ako platite deset puta više da biste dobili deset puta više pšenice, zlata ili audio datoteka, primate deset puta više buduće korisnosti u obliku prehrane, materijala otpornog na hrđu ili zabave.

Bitcoin preokreće ovu logiku. Ljudi plaćaju deset puta više ne za deset puta veću buduću korisnost, već za zapis da su računala u prošlosti riješila deset puta više zagonetki. Ljudi masovno odbacuju buduću korisnost za zapis o prošlom radu. To nije samo tragedija logike; to je matematičko odbrojavanje do neizbježnog sistemskog kolapsa.

Bitcoin funkcionira kao čista igra s negativnom sumom. Svaki "profit" koji ostvari rani korisnik izravni je gubitak za kasnijeg sudionika, uvećan stalnim odlijevanjem stvarnog bogatstva potrebnog za plaćanje astronomskih računa mreže za struju.

Sustav djeluje kao "ponor" kapitala, gdje se novac trajno uništava kako bi se održavala knjiga povijesnih zagonetki. Ova stvarnost maskirana je samo stalnim priljevom novih sudionika koji žrtvuju svoja potraživanja u stvarnoj ekonomiji kako bi nahranili glad mreže za energijom. Trenutak kada se taj protok uspori, bilo zbog regulacije, troškova energije ili jednostavne spoznaje da potvrda o prošlom radu nije spremište buduće vrijednosti, struktura će se suočiti s terminalnom krizom likvidnosti.

Na kraju će investitorima ostati samo savršen, decentraliziran zapis o bogatstvu koje su bacili u ponor.

When Bitcoin was introduced as a method for storing data in a decentralized way that prevents tampering or loss, it was claimed that the data it stored was financial in nature. Terms such as "electronic money" were used, and references were made to financial institutions. It was even claimed that Bitcoin solved the problem of trust that causes crises in financial institutions.

Yet financial data is fundamentally about obligations and corresponding claims, which do not exist in Bitcoin. Although some decentralized systems that emerged after Bitcoin, such as Tether or PayPalUSD, do contain financial data because they represent claims on issuers who must redeem them for bank or PayPal balances, this still does not solve the problem of trust. Users must still trust that the issuers will be capable of honoring those claims. Financial crises arise precisely because claims are not honored due to defaults on obligations, issuer insolvency, and similar failures.

No financial crisis has occurred because central securities depositories, banks, or electronic money issuers tampered with client data. Crises occurred because companies issuing stocks went bankrupt, banks issued too many bad loans, or e-money issuers became insolvent. Centralized data storage or bad recordkeeping was never the problem.

So even if Bitcoin stored financial data, it still could not solve anything related to financial crises. In reality, Bitcoin stores only computational performance data. Computers operated by so-called Bitcoin miners solve cryptographic puzzles, and the more puzzles they solve, the larger their score becomes. It is that score that the Bitcoin system stores and transfers. When you pay to have 1 BTC transferred to your address, you are effectively buying proof that some computer in the past expended energy and solved a puzzle. This obviously has nothing to do with finance.

Yet, a global audience accepted the financial narrative surrounding Bitcoin. Driven by the false belief that decentralization is a revolutionary solution to financial problems, investors began pouring capital into the network, unwittingly committing a form of financial harakiri. They are trading away claims and goods that provide future utility for a mere receipt of past computational performance.

This self-destruction is most evident when we examine the logic of scaling. If a person buys 1 BTC, they pay, say, $100,000. If another person buys 10 BTC, they pay ten times more, or one million dollars. Generally, we pay ten times more for an asset because we expect ten times more future utility. Consider a few examples.

Stock shares represent a claim on future cash flows. When you pay ten times more to acquire 10 shares instead of 1, you gain the ability to receive ten times larger dividends or liquidation proceeds.

Fiat currency represents a claim on bank borrowers. When, for instance, you work ten times longer to obtain ten times more currency units, you gain a tenfold larger claim. Because currency units are issued through loans and tied to borrowers’ collateral, borrowers must work more for you, or provide more products and services, if you hold more of those units. If they default, banks themselves must honor the claim, and the more units you hold, the more seized collateral you can receive through bank auctions.

Outside the financial world, the same logic applies. If you pay ten times more to obtain ten times more wheat, gold, or audio files, you receive ten times more future utility in the form of nutrition, rust-free material, or entertainment.

Bitcoin reverses this logic. People pay ten times more not for ten times the future utility, but for a record that computers in the past solved ten times more puzzles. People are massively throwing away future utility for a record of past work. This is not merely a tragedy of logic; it is a mathematical countdown to an inevitable systemic failure.

Bitcoin operates as a pure negative-sum game. Every "profit" realized by an early adopter is a direct loss for a later participant, compounded by the constant drainage of real-world wealth required to pay the network’s astronomical electricity bills.

The system acts as a capital "sink," where money is permanently destroyed to maintain a ledger of historical puzzles. This reality is masked only by the constant influx of new participants sacrificing their claims on the real economy to feed the network's energy hunger. The moment this flow slows, whether due to regulation, energy costs, or the simple realization that a receipt for past work is not a store of future value, the structure will face a terminal liquidity crisis.

In the end, investors will be left with nothing but a perfect, decentralized record of the wealth they set on fire.

When Bitcoin was introduced as a method for storing data in a decentralized way that prevents tampering or loss, it was claimed that the data it stored was financial in nature. Terms such as "electronic money" were used, and references were made to financial institutions. It was even claimed that Bitcoin solved the problem of trust that causes crises in financial institutions.

Yet financial data is fundamentally about obligations and corresponding claims, which do not exist in Bitcoin. Although some decentralized systems that emerged after Bitcoin, such as Tether or PayPalUSD, do contain financial data because they represent claims on issuers who must redeem them for bank or PayPal balances, this still does not solve the problem of trust. Users must still trust that the issuers will be capable of honoring those claims. Financial crises arise precisely because claims are not honored due to defaults on obligations, issuer insolvency, and similar failures.

No financial crisis has occurred because central securities depositories, banks, or electronic money issuers tampered with client data. Crises occurred because companies issuing stocks went bankrupt, banks issued too many bad loans, or e-money issuers became insolvent. Centralized data storage or bad recordkeeping was never the problem.

So even if Bitcoin stored financial data, it still could not solve anything related to financial crises. In reality, Bitcoin stores only computational performance data. Computers operated by so-called Bitcoin miners solve cryptographic puzzles, and the more puzzles they solve, the larger their score becomes. It is that score that the Bitcoin system stores and transfers. When you pay to have 1 BTC transferred to your address, you are effectively buying proof that some computer in the past expended energy and solved a puzzle. This obviously has nothing to do with finance.

Yet, a global audience accepted the financial narrative surrounding Bitcoin. Driven by the false belief that decentralization is a revolutionary solution to financial problems, investors began pouring capital into the network, unwittingly committing a form of financial harakiri. They are trading away claims and goods that provide future utility for a mere receipt of past computational performance.

This self-destruction is most evident when we examine the logic of scaling. If a person buys 1 BTC, they pay, say, $100,000. If another person buys 10 BTC, they pay ten times more, or one million dollars. Generally, we pay ten times more for an asset because we expect ten times more future utility. Consider a few examples.

Stock shares represent a claim on future cash flows. When you pay ten times more to acquire 10 shares instead of 1, you gain the ability to receive ten times larger dividends or liquidation proceeds.

Fiat currency represents a claim on bank borrowers. When, for instance, you work ten times longer to obtain ten times more currency units, you gain a tenfold larger claim. Because currency units are issued through loans and tied to borrowers’ collateral, borrowers must work more for you, or provide more products and services, if you hold more of those units. If they default, banks themselves must honor the claim, and the more units you hold, the more seized collateral you can receive through bank auctions.

Outside the financial world, the same logic applies. If you pay ten times more to obtain ten times more wheat, gold, or audio files, you receive ten times more future utility in the form of nutrition, rust-free material, or entertainment.

Bitcoin reverses this logic. People pay ten times more not for ten times the future utility, but for a record that computers in the past solved ten times more puzzles. People are massively throwing away future utility for a record of past work. This is not merely a tragedy of logic; it is a mathematical countdown to an inevitable systemic failure.

Bitcoin operates as a pure negative-sum game. Every "profit" realized by an early adopter is a direct loss for a later participant, compounded by the constant drainage of real-world wealth required to pay the network’s astronomical electricity bills.

The system acts as a capital "sink," where money is permanently destroyed to maintain a ledger of historical puzzles. This reality is masked only by the constant influx of new participants sacrificing their claims on the real economy to feed the network's energy hunger. The moment this flow slows, whether due to regulation, energy costs, or the simple realization that a receipt for past work is not a store of future value, the structure will face a terminal liquidity crisis.

In the end, investors will be left with nothing but a perfect, decentralized record of the wealth they set on fire.

People who have invested enormous amounts of electricity and capital to obtain records on the Bitcoin blockchain often justify their decision by pointing to fiat money. They argue that fiat currency is also merely a record, one that exists on paper or in a bank’s database, yet people routinely exchange it for goods and services.

However, the mere fact that something is a record is irrelevant. Records are everywhere: scientific data, sports results, meteorological measurements, stock ownership, and countless others. What truly matters is what the record represents and, most importantly, why anyone would pay for it.

Imagine you perform ten push-ups and write the number "10" on a piece of paper to represent this. That is also a record. Yet no one would pay you for it because the record is useless to them; it cannot benefit them.

By contrast, consider a record of stock ownership. People pay for it because it entitles the holder to future cash flows, which is a clear benefit. The same is true for fiat money. It represents a debt within the banking system that must ultimately be repaid, under the threat of losing assets or, in the case of governments, facing sovereign default. Holding fiat is beneficial because those who owe the banks must ultimately provide goods, services, or assets to settle that debt.

As we can see, a record in and of itself means nothing. What matters is what it represents.

So why do Bitcoin advocates constantly repeat the mantra that "fiat money is just a record"? It is to divert attention from what the Bitcoin record actually represents. In reality, it represents nothing more than the fact that computers expended energy and solved a cryptographic puzzle. That is all. It is simply a record of past computational activity in numerical form, just like the piece of paper noting ten push-ups. Such a record provides no benefit to anyone, whether it reads "0.001", "10", or "1,000". This is why it makes no sense to give even a dime for it.

How, then, is it possible that people invest substantial sums in it? Setting aside the most common reason, that many have simply seen others profit, the trick is that these records are wrapped in a shiny cellophane of technical features. They are decentralized, resistant to theft, limited in supply, and beyond government control.

These characteristics sound compelling, especially to those unfamiliar with the underlying reality. But they are no different from taking the record of ten push-ups, placing it inside the world’s most expensive and secure safe, hiding it from the government, and declaring that "10" is the highest number that can ever exist. None of these measures change the fundamental nature of the record. It remains nothing more than confirmation of past activity that creates no future benefits. No matter how sophisticated the packaging, it stays useless.

In the Bitcoin world today, people are giving around $70,000 for confirmation that a computer "did a push-up." They are replacing records that deliver future benefits with a useless record of computational effort, a mere digital phantom of an energy-intensive past. That is the absurdity of investing in Bitcoin.

People who have invested enormous amounts of electricity and capital to obtain records on the Bitcoin blockchain often justify their decision by pointing to fiat money. They argue that fiat currency is also merely a record, one that exists on paper or in a bank’s database, yet people routinely exchange it for goods and services.

However, the mere fact that something is a record is irrelevant. Records are everywhere: scientific data, sports results, meteorological measurements, stock ownership, and countless others. What truly matters is what the record represents and, most importantly, why anyone would pay for it.

Imagine you perform ten push-ups and write the number "10" on a piece of paper to represent this. That is also a record. Yet no one would pay you for it because the record is useless to them; it cannot benefit them.

By contrast, consider a record of stock ownership. People pay for it because it entitles the holder to future cash flows, which is a clear benefit. The same is true for fiat money. It represents a debt within the banking system that must ultimately be repaid, under the threat of losing assets or, in the case of governments, facing sovereign default. Holding fiat is beneficial because those who owe the banks must ultimately provide goods, services, or assets to settle that debt.

As we can see, a record in and of itself means nothing. What matters is what it represents.

So why do Bitcoin advocates constantly repeat the mantra that "fiat money is just a record"? It is to divert attention from what the Bitcoin record actually represents. In reality, it represents nothing more than the fact that computers expended energy and solved a cryptographic puzzle. That is all. It is simply a record of past computational activity in numerical form, just like the piece of paper noting ten push-ups. Such a record provides no benefit to anyone, whether it reads "0.001", "10", or "1,000". This is why it makes no sense to pay even a dime for it.

How, then, is it possible that people are paying substantial sums for it? Setting aside the most common reason, that many have simply seen others profit, the trick is that these records are wrapped in a shiny cellophane of technical features. They are decentralized, resistant to theft, limited in supply, and beyond government control.

These characteristics sound compelling, especially to those unfamiliar with the underlying reality. But they are no different from taking the record of ten push-ups, placing it inside the world’s most expensive and secure safe, hiding it from the government, and declaring that "10" is the highest number that can ever exist. None of these measures change the fundamental nature of the record. It remains nothing more than confirmation of past activity that creates no future benefits. No matter how sophisticated the packaging, it stays useless.

In the Bitcoin world today, people are paying around $70,000 for confirmation that a computer "did a push-up." They are giving up goods, services, and records that deliver future benefits in exchange for a useless record of computational effort, a mere digital phantom of an energy-intensive past.

People who have spent enormous amounts of money and electricity to obtain records on the Bitcoin blockchain often deflect criticism by appealing to fiat money. They say things like: "Fiat is just a record on paper or in a bank’s database, yet people trade vast amounts of real goods and services for it every day."

What they conveniently omit is that records are everywhere. Scientific data, sports results, meteorological measurements, and stock ownership are all records stored somewhere. The mere fact that something is a record is irrelevant. What matters is what that record represents and why anyone would even pay for it.

Take, for example, a record of wind speed. It can provide crucial information, especially in aviation. That is why it makes sense to pay for it. A record of stock ownership represents a right to future cash flows, which also makes it worth paying for. The same applies to fiat money, which represents a debt within the banking system that must be repaid under the threat of losing a house, a business, or, in the case of a state, facing sovereign default.

In short, we pay for records that create concrete future benefits. The greater the expected benefit, the higher the price of the record.

However, when we examine Bitcoin, its record represents nothing more than the fact that computers made random guesses until they solved a cryptographic puzzle. It is a record of past activity, not one that creates any concrete future benefits. It is like doing 10 push-ups and recording "10", or driving 250 kilometers and recording "250". Why would anyone pay even a dime for that? It makes no sense.

Imagine three people: one holding stocks, one holding fiat money, and one holding Bitcoin. Ask each the same question: "Why should I give you something valuable in exchange for that record? How does it benefit me?"

The stockholder answers: "Because this record gives you rights to future cash flows."

The holder of fiat money answers: "Because this record gives you leverage over debtors who must work for you or give you assets to settle their obligations toward banks."

The Bitcoin holder’s response is completely different: "Because it is the future of finance, a monetary revolution, decentralized, supply-capped, secure, and because my neighbor got rich from it."

The Bitcoin holder is forced to rely on impressive-sounding phrases, technical specifications, and stories about other people’s profits. They cannot state the plain truth: "Pay me tens of thousands of dollars for a record proving that computers in the past expended electricity solving puzzles." It is like asking for a car in exchange for a record of doing a push-up.

No rational person would accept that deal. That is precisely why the Bitcoin community constructs elaborate narratives and uses lofty language. All of it serves to mask the fundamental absurdity: people are giving up records that deliver future benefits in exchange for records of computer work, mere digital phantoms of an energy-intensive past.

Imagine you write your name, or any arbitrary identifier, such as a random string like “qViLJfdGaP4EeH”, on a piece of paper. Next to it, you write “50.” You then ask a friend: What does this “50” actually mean, what referent it represents? Is it a length? A temperature? The number of items in a room? A promise to pay 50 dollars? Shares in a company? Units of a commodity? The number of imaginary unicorns you just invented? Or perhaps a score in a game?

Your friend obviously cannot tell. Moreover, whatever referent you claim it represents, you cannot prove it if all you have is an identifier and a number assigned to it. Any assertion about its meaning remains an unprovable, and ultimately false, statement.

The Bitcoin whitepaper is exactly that kind of false statement. In it, its author, Satoshi Nakamoto, described a protocol that assigns numbers to identifiers and presented it as a system for managing “electronic cash.” He repeatedly used terms like “digital coins” and referenced financial institutions, strongly suggesting that the numbers carried a monetary referent.

In reality, however, all that exists is a complex, digital version of that simple piece of paper. Instead of a single sheet, we have a distributed database replicated across thousands of devices. This database records which numbers belong to which cryptographic identifiers (addresses). There are rules governing how these numbers are initially created, how they may be reassigned, and how duplication is prevented. Yet there is still no external referent. If Nakamoto had instead spoken about meteorology and claimed the system measured temperature, or about sports and claimed it recorded game scores, nothing in the protocol itself would need to change. The only things that would exist are identifiers and numbers.

There is nothing in Bitcoin that resembles the structures found in actual financial institutions: legally enforceable obligations, creditor–debtor relationships, collateralized claims, loan contracts, equity stakes, or rights to future cash flows. Likewise, there is nothing that corresponds to the tangible elements of meteorology or sports, such as thermometers, timers, scoreboards, rule-defined scoring systems, or physically observable performance.

Out of nowhere, Nakamoto declared that his system was financial in nature and millions of people accepted the claim without scrutiny. Someone initially gave up pizza to have a number assigned to an identifier created within Nakamoto’s system, and that was recorded by adding an entry to the database. Others began joining in, giving up ever-larger amounts of electricity, money and goods to acquire these numbers.

Yet to this day, no one can point to any actual referent outside these numbers. If they claim they bought “coins”, they cannot prove it. If they claim they bought a game score, an imaginary unicorn count, or corporate shares, the situation is no different: the assertion remains equally unprovable.

All they can prove is that the numbers are related to a process of random guessing and verifying hashes, making them a kind of score in that process. Yet, they keep believing they are related to finance. They often say like "fiat money is also numbers," ignoring the fact that sports results, meteorological measurements, scientific data, stock ownership records, and traffic flow statistics are also numbers. Systems in every field use numerical data, but the data is just the expression of the referent.

In the end, Bitcoin is nothing more than a sophisticated list of meaningless numbers attached to meaningless identifiers. People collectively believe in a monetary referent that does not, and cannot, exist within that system. Like any other shared delusion, it persists only as long as enough people continue to act as if the emperor is wearing clothes.

Imagine you write your name, or any arbitrary identifier, such as a random string like “qViLJfdGaP4EeH”, on a piece of paper. Next to it, you write “50.” You then ask a friend: What does this “50” actually mean, what referent it represents? Is it a length? A temperature? The number of items in a room? A promise to pay 50 dollars? Shares in a company? Units of a commodity? The number of imaginary unicorns you just invented? Or perhaps a score in a game?

Your friend obviously cannot tell. Moreover, whatever referent you claim it represents, you cannot prove it if all you have is an identifier and a number assigned to it. Any assertion about its meaning remains an unprovable, and ultimately false, statement.

The Bitcoin whitepaper is exactly that kind of false statement. In it, its author, Satoshi Nakamoto, described a protocol that assigns numbers to identifiers and presented it as a system for managing “electronic cash.” He repeatedly used terms like “digital coins” and referenced financial institutions, strongly suggesting that the numbers carried a monetary referent.

In reality, however, all that exists is a complex, digital version of that simple piece of paper. Instead of a single sheet, we have a distributed database replicated across thousands of devices. This database records which numbers belong to which cryptographic identifiers (addresses). There are rules governing how these numbers are initially created, how they may be reassigned, and how duplication is prevented. Yet there is still no external referent. If Nakamoto had instead spoken about meteorology and claimed the system measured temperature, or about sports and claimed it recorded game scores, nothing in the protocol itself would need to change. The only things that would exist are identifiers and numbers.

There is nothing in Bitcoin that resembles the structures found in actual financial institutions: legally enforceable obligations, creditor–debtor relationships, collateralized claims, loan contracts, equity stakes, or rights to future cash flows. Likewise, there is nothing that corresponds to the tangible elements of meteorology or sports, such as thermometers, timers, scoreboards, rule-defined scoring systems, or physically observable performance.

Out of nowhere, Nakamoto declared that his system was financial in nature and millions of people accepted the claim without scrutiny. Someone initially gave up pizza to have a number assigned to an identifier created within Nakamoto’s system, and that was recorded by adding an entry to the database. Others began joining in, giving up ever-larger amounts of electricity, money and goods to acquire these numbers.

Yet to this day, no one can point to any actual referent outside these numbers. If they claim they bought “coins”, they cannot prove it. If they claim they bought a game score, an imaginary unicorn count, or corporate shares, the situation is no different: the assertion remains equally unprovable.

All they can prove is that the numbers are related to a process of random guessing and verifying hashes, making them a kind of score in that process. Yet, they keep believing they are related to finance. They often say like "fiat money is also numbers," ignoring the fact that sports results, meteorological measurements, scientific data, stock ownership records, and traffic flow statistics are also numbers. Systems in every field use numerical data, but the data is just the expression of the referent.

In the end, Bitcoin is nothing more than a sophisticated list of meaningless numbers attached to meaningless identifiers. People collectively believe in a monetary referent that does not, and cannot, exist within that system. Like any other shared delusion, it persists only as long as enough people continue to act as if the emperor is wearing clothes.

Imagine you write your name, or any arbitrary identifier, such as a random string like “qViLJfdGaP4EeH”, on a piece of paper. Next to it, you write “50.” You then ask a friend: What does this “50” actually mean, what referent it represents? Is it a length? A temperature? The number of items in a room? A promise to pay 50 dollars? Shares in a company? Units of a commodity? The number of imaginary unicorns you just invented? Or perhaps a score in a game?

Your friend obviously cannot tell. Moreover, whatever referent you claim it represents, you cannot prove it if all you have is an identifier and a number assigned to it. Any assertion about its meaning remains an unprovable, and ultimately false, statement.

The Bitcoin whitepaper is exactly that kind of false statement. In it, its author, Satoshi Nakamoto, described a protocol that assigns numbers to identifiers and presented it as a system for managing “electronic cash.” He repeatedly used terms like “digital coins” and referenced financial institutions, strongly suggesting that the numbers carried a monetary referent.

In reality, however, all that exists is a complex, digital version of that simple piece of paper. Instead of a single sheet, we have a distributed database replicated across thousands of devices. This database records which numbers belong to which cryptographic identifiers (addresses). There are rules governing how these numbers are initially created, how they may be reassigned, and how duplication is prevented. Yet there is still no external referent. If Nakamoto had instead spoken about meteorology and claimed the system measured temperature, or about sports and claimed it recorded game scores, nothing in the protocol itself would need to change. The only things that would exist are identifiers and numbers.

There is nothing in Bitcoin that resembles the structures found in actual financial institutions: legally enforceable obligations, creditor–debtor relationships, collateralized claims, loan contracts, equity stakes, or rights to future cash flows. Likewise, there is nothing that corresponds to the tangible elements of meteorology or sports, such as thermometers, timers, scoreboards, rule-defined scoring systems, or physically observable performance.

Out of nowhere, Nakamoto declared that his system was financial in nature and millions of people accepted the claim without scrutiny. Someone initially gave up pizza to have a number assigned to an identifier created within Nakamoto’s system, and that was recorded by adding an entry to the database. Others began joining in, giving up ever-larger amounts of electricity, money and goods to acquire these numbers.

Yet to this day, no one can point to any actual referent outside these numbers. If they claim they bought “coins,” they cannot prove it. If they claim they bought a game score, an imaginary unicorn count, or corporate shares, the situation is no different: the assertion remains equally unprovable.

All they can prove is that the numbers are related to a process of random guessing and verifying hashes, making them a kind of score in that process. Yet, they keep believing they are related to finance. They often say like "fiat money is also numbers," ignoring the fact that sports results, meteorological measurements, scientific data, stock ownership records, and traffic flow statistics are also numbers. Systems in every field use numerical data, but the data is just the expression of the referent.

In the end, Bitcoin is nothing more than a sophisticated list of meaningless numbers attached to meaningless identifiers. People collectively believe in a monetary referent that does not, and cannot, exist within that system. Like any other shared delusion, it persists only as long as enough people continue to act as if the emperor is wearing clothes.