The Bitcoin Songsheet: How Science Became a Fiat Hype Machine
Bitcoin presents its users with an exciting and potentially profitable opportunity, but the cryptocurrency isn’t without drawbacks. In this article, we examine how science can help us better understand these cryptocurrencies and how they work — and we’ll also look at how hype has caused many to fall prey to scammers and other untrustworthy sources of information. For an in-depth perspective on Bitcoin, read on!
First, let's look at how science became the fiat hype machine
In 1971, Nixon took us off of a gold standard for US currency. This ended and replaced an agreement that basically said, If you present me with $1, I'll return you some gold -- because gold is valuable stuff (for good reasons) and was used to back up currency as a way to measure value. In fact it remains valuable today; in particular it is attractive because it can't be inflated at will by printing more money.
Second, what science was supposed to be about
peer review. This is how we know what is science and what isn’t. It’s not perfect, but no matter who you are—no matter what your political or social motivations might be—if you want to get published in reputable journals, then your work better pass peer review. This was Satoshi Nakamoto’s achievement.
Third, what science actually is
Science is method. It’s a way of looking at and analyzing reality, testing your theories and observations against it, adapting in light of new data, then doing it all over again.
Fourth, how things started going wrong
In early April 2013, U.S. Federal agents knocked on doors in South Florida and New York City, following up on an investigation into one of Bitcoin’s largest exchanges—the Mt. Gox exchange in Japan. They seized $2 million dollars in accounts belonging to that exchange and its CEO, Mark Karpeles, who is still wanted by Japanese police for further questioning regarding allegations of fraud and embezzlement.
Fifth, how science went from a fiat hype machine to something close to real
The first essential step in science was to realize that the way nature behaves is not at all what we thought it was. The bizarre reality that had to be explained involved interactions on scales so tiny they’re invisible, yet capable of exerting enormous influence over macroscopic objects. That realization drove researchers away from metaphysics and toward physics and chemistry, which are based on observations of objective experiments done under strictly controlled conditions.
Sixth, how science can serve us again
After World War II, science was untouchable. The U.S., Russia, and China all created new bureaucracies to keep nuclear weapons from being used, and all three recognized that scientific knowledge could help them build better economies in peacetime. That meant funding for research to maximize these possibilities.