The cargo cult of Bitcoin

To understand the phenomena surrounding the illustrious Bitcoin, one has to first understand the original cargo cults that sprang up in post-WWII Melanesia and similar Pacific islands. Essentially, Japanese and Allied soldiers were stationed on the island, bringing with them all manner of supplies, from food to clothes to vehicles and more, and shared a bit of these with the native islanders, who, due to a lack of missionaries present in a warzone, weren’t informed of the reason behind this sudden flurry of wealth.

After the war ended and forces withdrew, cults developed on the islands; leaders promised their followers a return of the wealth and benefactors. People imitated the now-gone soldiers in dress and behavior, and constructed elaborate life-size replicas of things such as planes, Jeeps, air traffic control towers, runways, and more. It was believed that these items and mimicking the troops’ drills and behavior would bring back the planes and materiel, and that the various forces who were stationed on the islands were related to either deities or ancestors, and used this power to bring great wealth.

Works better than most ASIC rigs and all GPU miners

Bitcoin operates in a similar fashion. Take, for example, institutions like the NYSE, NASDAQ, IPOs, and large banks. Buttcoiners see these systems and want their toy “currency” to function the same way, so they imitate these major economic forces in the most hilarious, ridiculous, and drama-filled ways possible. They see CEOs and CFOs and other C-level execs, and want to play businessman with their Internet money. As has been stated elsewhere:

They stand on their taped-together papier-mache mockup of Wall Street, waving cheap wallets and stock certificates written in crayon and charcoal, droning “buy low, sell high”, and they haven’t quite figured out why the world isn’t yet at their doorstep.

They’ll imitate and mimic these things, acting like they have companies and stocks, trading imaginary shares and abbreviating Bitcoin as “BTC.” One of them, now long branded with the scarlet letter “SCAMMER,” even set up a credit rating service, imitating S&P, and handing out ratings that resembled eBay feedback more than it did actual credit ratings. Bitcoiners essentially build replica airplanes and runways, hoping desperately to have their scrip recognized by the rest of the world that already has banking, stocks, and various other financial systems.

The Global Bitcoin Stock Exchange (LGBTQIA or something, just imagine you’re mumbling about buttcoins with a mouthful of marbles) was allegedly the first Bitcoin “securities exchange,” where buttcoiners would trade “shares” in their “companies” with each other, making “IPOs” for their mining pools, buttcoin casinos, and various other Bitcoin disasters. This, of course, was plagued with issues, the most prevalent and destructive being the “Pirate Pass Through,” which was a Ponzi scheme stacked on top of another Ponzi scheme and ended up collapsing a great many of these fake companies. GLBSE itself failed because governments don’t like unlicensed securites trading and its founder “Nefario” would have to comply with anti-money laundering and tax regulations, which are feared and reviled in the Bitcoin community, mostly because Bitcoins are secondarily used to dodge taxes and launder money in small amounts (their primary function is to purchase drugs and child pornography.)

John Frum or Satoshi Nakamoto?

Another “major” (and currently still active) trade site is MPEx, a site run by a smarmy egomaniac with a tendency to call everyone “idiots,” charges 30 buttcoins (currently around 800 USD) to join, posts juvenile, swear-filled blog posts and then has the audacity to charge to read them, and generally being offensive and shady. It doesn’t help at all that his “exchange” looks like it was coded in notepad and wouldn’t even look right on mid-90s GeoCities. This is a guy so obnoxious and self-centered that even redditors can’t stand him, but he repeats the right magic words: options, futures, stocks, bonds, and funds, and people inexplicably flock to his site and do “business,” passing meaningless numbers back and forth in a misguided attempt to make the numbers bigger and screw other users in the process.

Dwolla Dwolla bill, y’all

In the “business” side of things, we have the ironic mining pools, in which Bitcoiners band together to create large, centralized operations to help generate and manage financial transactions… Moving on, these are prone to failure as well, especially the ones that like to advertise themselves as having stocks, IPOs, and other Wall Street-speak in an attempt to appear legitimate. Often they all “invest” in each other, leading to a string of “debts” that never get repaid. Ultimately this is all pointless, as again they’re repeating magic words back and forth: securities, stocks, bids, investments, shares, escrow, profit. None of it actually does anything, none of it goes anywhere, they’re trading chits because that’s what they’ve seen the real investors do.

The moral of the story is that no matter what you call the things you’re doing with Bitcoins, they’re still not real, they’re just an imitation of what real financial sectors do, an attempt to woo the gods and have their airplanes return to drop crates of precious cargo onto Bitcoin island and bring it riches. Instead of airdropped supplies though, all they get is various arguments on forums, IRC, and people stealing from each other. Bitcoin!