But what are they afraid of?

A question that came to me via social media concerns the bitcoin discourse, and it is “but why is it still so scary?”. In fact, it has become a speculative security rather than a currency, thus losing much of its power of "disruption".

I say this in the sense that with the capital that constitutes Bitcoin today (160B $) you can make at most a GAFAM like Amazon, which is not little, but if it were a coin, with 160B $ of liquid circulating mass (after all, the coin is M0 ) you make us a national currency of the BIG ones. Let's say huge, level of the Euro or the RMB (the dollar is much bigger).

So in becoming a speculative asset it has lost a lot of its power. The big financial speculators accuse cryptocurrencies of being too speculative and volatile, which is funny because today the volatility of the stock exchanges is tremendous, and the financial market in general is tremendously volatile.

Bitcoin is neither more speculative nor more volatile than many exotic derivatives, much less the operations conducted by Hedge Funds.

So why is it scary? For two reasons.

• responds to clear logic of supply and demand.

True, bitcoin goes up and down. But it does it in an explainable way . Go up because Musk buys a lot? Ok. We know why it goes up and whose fault it is. Does it go up because in India they took out certain banknotes from minting and people don't know how to buy things? Ok, we know. And we see it, because we see the IP addresses from which the transactions originate.

Bitcoin, having a public ledger, allows you to make analyzes that ultimately explain its value. At the end of the day, you can always see that a new whale has arrived, a player capable of influencing its price, and you can follow its movements on a global scale because you can observe the IP of the clients.

Well.

Is this also the case for the financial / economic world? No.

Let's take real estate speculation in Europe. The population is not growing. The number of homes does not decrease. There are no major migrations within the continent. How is it possible for house prices to rise?

Let's take Italy. The continuous denatality and the migratory flow cause the population to drop from year to year. But not a million homes have exploded in the past decade.

Why does the price, that is the relationship between supply and demand , not drop?

The answer is: we have "whales", players who keep buying houses to leave them empty, for the pure purpose of causing shortage of houses. In order to raise the price.

Now imagine that it is possible, observing a public ledger , to understand that there are a dozen players (banks, real estate developers and builders) who are keeping house prices high, purely for speculative purposes. As happens with Bitcoin.

If we then put money transfers on a public ledger, we would discover quite easily that:

1. most of the wealth is in the hands of the state.
2. most of the investments are called "procurement"
3. the rest is in the hands of very few families, about twenty.
4. private individuals invest very little, they limit themselves to accumulating and living on income.

now, I'm not saying that we don't already know. Who is in the know or uses logic already knows. What is not there so far is the possibility to examine the data.

If I proposed putting all tax returns online, as happens in Finland, it would be the apocalypse in Italy. It happened years ago, for just one year, and there was a merciless hunt for these files by the postal police. BUT the scandal and fear were enormous.

Now imagine that a register of all bank movements in the country, taking care to pseudonymize personal data, ends up public. Once you have sold the house to a guy, you can have his unique ID, his hash, and if you have the ledger you can check how many houses he has bought in the past, for one thing. You can find out if the contracts are always the same winners, to say: you know the hash of the state, and you can therefore see how many companies it pays to, and how many there are.

This analytical capacity for now has only the Guardia di Finanza, so the state covers its own flaws, and the state-friendly financiers breathe a sigh of relief.

The story of the public ledger scares bitcoin. It provides the market with both explicability and transparency never seen before.

Nobody would throw money into a house at today's price, knowing that it is a speculative trend that will end well before you are done paying the mortgage. The possibility for those 20 families to speculate on the prices of EVERYTHING would be null, if there were a public register capable of explaining that the price of the thing is too high, because there are 20 whales that can come together and decide.

The culture of these families is that no one should know anything about them, and all their decisions (and their agreements) must be done in secret. And let's be clear, they control the price of EVERYTHING: increase the pasta? It was them. Does it increase gasoline? It was them. Does the price of cars increase? It was them. There is nothing that they do not check the final price for, for the simple reason that they can manage the offer, buying up such a thing.

They can easily raise the price of cars by "changing company fleets", and so on. Anything they can buy up, if only by buying "Futures" on the given thing, playing to the upside.

The citizen who sees price increases speaks of "inflation", but does not understand where it comes from, does not understand why, does not understand WHO. Here, a convinced ledger, in the hands of a data science expert, could give the market the explainability that the famous 20 families do not want well.

If I go into the baker and buy some bread, everyone sees me. If I buy all the bread of the day, at least a couple of customers present see me. If I meet up with the baker at night, and agree to halve the amount of bread in order to raise the price, no one sees me. Provided that no one can analyze the flows.

Here, this is what scares bitcoin and cryptocurrencies: the shared ledger.

• the price of the cryptocurrency is explainable.
• even if individuals are anonymized, the market is transparent

these are exactly the two things that the financiers, whom we see represented in Italy by Corriere della Sera, in Germany by Handelsblatt, etc., hate and detest in cryptocurrencies.

Explanability of the value and transparency of the market.