Bitcoin: The Digital Piggy Bank is Empty

You know how people say: "I bought 3 bitcoins," "I invested in bitcoins," "I'm stacking satoshis," "I transferred bitcoins to my wallet," or "I mined bitcoins"? However, all of this is a misconception because no bitcoins or their fractions (satoshis) actually exist. The piggy bank is empty.

The misconception stems from a post by an unknown programmer who claimed to have invented a payment system that transfers money. But all his invention does is maintain a decentralized database over a peer-to-peer network that shows which numbers belong to which addresses.

People came to believe that this network and its underlying protocol, collectively known as Bitcoin, record an amount of money, namely these bitcoins (abbreviated as BTC), in the database. But that money is not there.

For instance, people often claim they have bought digital money, even though nothing digital exists in proportion to the assigned numbers. A person whose address is assigned the number "50" cannot show fifty files, data structures, or software products. There are no digital "bitcoin objects" that can be mined, bought, owned, moved, or used.

It is even more obvious that nothing physical exists. Despite media illustrations of metal coins stamped with the '₿' symbol and frequent claims that one is buying something comparable to collectibles or commodities, no fifty tangible units of any kind are stored or reserved for the person next to whose address stands "50."

The most common misconception, however, is the belief that people have bought something akin to fiat currencies, e-money issued by companies such as PayPal, tokens, or even stocks. Yet, all of the above are instruments of liability, where the holder derives a benefit upon the fulfillment of that liability.

Stocks track a company's obligation to its shareholders. When companies decide to distribute profits, execute stock buybacks, or liquidate the business, they are legally required to make direct payments to shareholders. PayPal’s e-money and tokens, like casino chips, track the issuer's obligation to redeem them for a specified amount of fiat currency. Fiat currencies track the obligations of those who took out loans from commercial and central banks. Before repaying their loans, these debtors provide goods, services, and labor to holders of fiat currency, or, in the case of the state, the settlement of tax liabilities. If debtors default on their payments, banks seize their property, offering them at auctions to holders of fiat currency, providing them with a benefit in that way.

That unknown programmer's invention does not track anyone's liability whose fulfillment would provide a benefit to the holders of Bitcoin addresses.

Therefore, there are no bitcoins to be mined or bought. There is neither physical, digital, nor liability-based money. What people are actually doing is giving away electrical energy, money, goods, and services, and the Bitcoin network numerically tracks this act of gifting. Through a collective narrative and storytelling, this act is publicly misperceived as an investment or a purchase.

Centralized exchanges reinforce this misconception most aggressively by displaying the "BTC" ticker and USD side-by-side on trading interfaces. This is a visual lie, where the interface assumes that "something" stands behind the letters "BTC," just as a liability stands behind "USD."

Even critics participate in the misconception. For example, by speaking of an "overvalued currency," they assume its existence. They call the act of gifting "overvaluation," even though there is no digital, physical, or liability-based thing that the user has received and could value. You cannot say the price is too high when there is nothing to compare it to. Since there are only numbers in a database, the word "overvalued" makes no sense. You cannot overvalue the number 50; it is simply 50.

In short, this entire misconception boils down to people gifting existing wealth to one another in the hope that tomorrow someone else will gift them more, all while convinced they are investing in the money of the future. It will all collapse when the public realizes that this money simply does not exist.