(NaturalNews) John, Mary and Kate are three "investors" who are buying bitcoins. Each time one of them buys a bitcoin, the value of bitcoins rises due to increased demand.
John got in early and bought 10 bitcoins for $1 each. So John's investment is a total of $10.
Mary got in a month ago and bought 10 bitcoins for $20 each. So Mary's total investment is $200.
Kate just bought her bitcoins, purchasing 10 of them for $200 each. So Mary's total investment is $2,000.
The total amount of their combined purchases as $10 + $200 + $2000, or a grand total of $2210.
But the three of them, in total, THINK they have a grand total of $6,000 worth of bitcoins because ALL the bitcoins they purchased are now "valued" at the most recent purchase price of $200.
In other words:
John currently owns 10 bitcoins valued at $200 each, so John thinks he's got "$2,000 worth of bitcoins" in his account.
Mary's 10 bitcoins are also valued at $200 each, so Mary thinks she's got "$2,000 worth of bitcoins."
Kate's bitcoins are also worth $200 each, so Kate has $2,000 worth of bitcoins.
In total, these three people believe they have $6,000 worth of bitcoins.
Yet, they only "invested" $2210.
Somehow, $3,790 in "value" was created out of nothing.
Where did this extra $3,790 come from?
Answer: It doesn't exist. It is an illusion.
Bitcoins, like stocks, create the illusion of free wealth during a rise in valuation
In truth, John, Mary and Kate are all suffering under a shared delusion by thinking they each possess $2,000 worth of bitcoins. All currencies are shared delusions, including the U.S. dollar. They only hold their value as long as very few people sell the currency. Once a selloff begins, the mathematical process that created the excess "virtual valuation" reverses itself, destroying valuations across all the investors.
All currencies depend on "faith" in the currency. That's why the U.S. dollar is claimed to be backed by the "full FAITH and credit of the U.S. government." Without the faith, the currency collapses. http://www.naturalnews.com/039848_bit...
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