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In the Mayan empire, the cocoa bean was the unit of exchange. The “Early Preclassic Maya” years walked through the late 1800s BC, while “Early Classic Maya” danced out to 600 AD. The Mayan kings of the city-states kept strict control over the cocoa bean supply. It was hard to grow. A supply growth under arrest, sound familiar? Cocoa crops failed all the time. And they had to be specially dried and fermented in a certain way to be valid legal tender. In other words, a cocoa bean required a lot of energy and was of limited supply. Like Bitcoin.
XBT Fails at the 200 Day
As the mad mob chases the brass ring, the drawdown brings a reality check. It took Google nearly 24 years to reach a $1T market cap, XBT just twelve years with the last $500B of gains this year. What does that mean? The beast inside the market is telling us there is a lot of capital that owns Bitcoin at MUCH higher prices. There is a substantial amount of weak hands in XBT that thirsts every minute of every day this week, “to get even and get out.”
Keep in mind, there was a big difference. If you were caught growing cocoa beans illegally, there was a good chance you’d find yourself on top of a pyramid with your living heart cut out of your body by a blood-encrusted priest (it was taboo to wash off victims’ blood) and have your still pumping heart offered up to the sun. The hot chocolate was the drink of kings. It was a special treat for the rest of the population. They literally drank money. Naturally, if a particularly expensive war came to a fruitless draw, the kings would release more of the cocoa beans than usual, i.e. they would debase their currency. When a century-long drought came, the Mayans released so many cocoa beans they became all but worthless, the middle class was wiped out and that contributed to the Classic Mayan Collapse. Well, at least that is one hypothesis. In any case, the real point is, the Mayan kings watched their money supply like hawks. If someone had invented a virtual cocoa bean, he would have found his heartless body tumbling down a long flight of pyramid steps into a rapturous crowd.
And this brings us to Uncle Sam and Form 1040, which, after establishing your name, social security number, and contact information, asked if you had traded any virtual currency during the past tax year. Then they asked about your deductions and normal income as per usual. No government wants to see serious competition to its currency that it can’t control. Sounds to us like the obsidian knives have been sharpened.