As of late 2025, Bitcoin is around $100,000. Political figures are openly promoting bitcoin mining. Their family members are openly boasting about their mining companies from public stages.
This got me wondering: Is this, really, the future of finance?
This question isn't just for investors. It's for every citizen of every country that will be affected by this "future."
As an engineer, I can tell you the answer isn't a simple "yes" or "no." It's a complex, 15-year story that has transformed from a small techno-revolution into a powerful global-wealth-extraction machine.
This post will not give you investment advice. It will give you something more valuable: Clarity. Here are the seven essential truths you need to understand about cryptocurrency, and in particular, about Bitcoin.
Truth 1: The Ponzi Structure is a Mathematical Reality
This is the harshest and the most important truth. When you buy $100,000 of Bitcoin, where does that money go?
You'd say it goes to the person who sold it to you, most likely a miner (others, like buyers who bought before you, are advised to never sell, i.e., HODL). And that miner doesn't invest this money to fund a company or build a factory. In fact, every bitcoin miner must spend your money.
Based on detailed 2024-2025 cost analysis, a miner has massive, immediate expenses:
- Electricity & Operations: For every Bitcoin mined, a miner has immediate cash costs that average around $40,000 to $60,000 for power and facility upkeep.
- Hardware Depreciation: The specialized "ASIC" computers they use become obsolete in just 1.5-2 years, representing additional cost of another $30,000 to $40,000 per coin.
This means 70-100% of your $100,000 is instantly consumed by real-world costs. It's gone, burned by miners on electricity and hardware.
The miner's only hope for profit is to sell the next Bitcoin they mine. Your only hope for profit is to find a "greater fool" willing to pay you more than $100,000.
This is the exact mathematical structure of a Ponzi scheme: a system with no productive value, where all returns are paid to early investors using the money from new investors. It requires constant new money just to keep the price from collapsing under the miners' massive, relentless selling pressure.
Bitcoin is bound to crash when investors stop “HODL"ing it.
Truth 2: Every Revolutionary Promise Has Failed
Bitcoin was born from the 2008 financial crisis, promising to be a better form of money. It has failed at every essential job money must do.
| Money's Purpose | Traditional Banking (Imperfect) | Bitcoin (Catastrophic Failure) |
|---|---|---|
| Store of Value | Imperfect (inflation), but savings are reliable. | Wild. 10%+ price swings on average. |
| Enable Payments | Instant (SEPA Instant, M-Pesa, PIX, UPI). Mostly free. | 7 transactions per second (globally). Fees range: $1–$50. Takes 10-60 minutes. |
| Provide Credit | Mortgages, business loans, etc., are the engine that run the economy. | No credit system exists. You can't borrow a Bitcoin that hasn't been mined. |
| Maintain Stability | Prices are predictable, enabling planning and contracts. | So volatile that no business can price goods in it. El Salvador tried; most businesses still refuse it. |
| Resolve Disputes | Chargebacks, fraud protection, courts. | Zero recourse. Send to the wrong address? Gone forever. Scammed? Gone forever. |
Bitcoin isn't a failed attempt at money; its fundamental design makes it incapable of being money.
Truth 3: The "Work" is Pointless and Environmentally Criminal
Bitcoin advocates say the massive energy use (more than that of many countries) is the cost of security.
However, this "work" that miners are doing, is useless, pointless computation. Unlike other computationally intensive processes, like folding proteins or modeling climate change, proof-of-work in bitcoin mining is, literally, a race to guess a random number.
In my book, The Bucket-Water Analogy, I used a simple parable:
Imagine a currency (BWEC) where, to "mine" a coin, you must be recorded on camera while moving water from one bucket to another, pointlessly, 24/7. The "work", here, is an arbitrary, wasteful contest to prove that you expended time and energy in the form of human labor. Bitcoin's "Proof-of-Work" is identical—it just burns electricity instead of human labor.
What's worse? The "Bitcoin is green" narrative is just another lie.
- It wastes all energy, including renewables that could be powering homes.
- Miners actively restart defunct coal and gas plants for cheap power.
This isn't inefficiency; it's large-scale, structural environmental vandalism.
Truth 4: Bitcoin Is More Centralized Than the Banks
The promise was "decentralization." The reality is an oligarchy more concentrated than traditional finance.- Wealth Concentration: 2% of Bitcoin addresses control over 71% of all Bitcoin. In the US, the top 2% own roughly 35% of wealth. Bitcoin is around twice as unequal.
- Mining Concentration: Just 2-3 mining pools control over 50% of the global mining power. They could, in theory, collude to rewrite the blockchain.
- Exchange Concentration: Over 90% of all crypto activity happens on centralized exchanges like Binance and Coinbase. Such exchanges are more like unregulated banks that can (and do) freeze your funds, trade against you, and collapse with your money.
Truth 5: It's a Machine for Global Extraction
As an Indian engineer, this is the part I see most clearly. Bitcoin is not a tool for the unbanked; it's a tool for extracting wealth from the world.
Think about the flow of money:
- A person in India, Nigeria, or Brazil wants to "invest."
- They convert their local currency (Rupees, Naira) into US dollars to buy Bitcoin.
- That Bitcoin is likely sold by a miner, because miners can’t HODL, and who is very likely US-based.
- The US miner takes those dollars and pays for electricity and infrastructure to US-based energy and infrastructure companies, and for better equipment to Chinese ASIC providers.
The "money" has permanently left the Bitcoin buyers nation and been transferred to the richer countries. This wealth is literally consumed by the energy suppliers, equipment manufacturers, and mining operators.
This investor becomes a bag-HODLer of a speculative token. He can only hope for other buyers to come along. It is a one-way extraction pipeline.
Truth 6: Political Capture Has Transformed the Threat
This is the final, most dangerous stage. The 2024-2025 political cycle in the US has shown that the crypto industry is no longer a fringe movement; it is a powerful political lobby.
The anti-establishment tool has been captured by the establishment
- Political Spending: The crypto industry spent around $245 million in the 2024 US election campaigns. They plan to spend even more in 2026 elections
- Direct Conflicts of Interest: The US President's family is openly involved in crypto ventures
- Strategic Policy: The US government is proposing a "Strategic Bitcoin Reserve," planning to hoard Bitcoin like gold.
The goal is no longer revolution. The goal is to use the power of the US government to legitimize the asset, force it on the world and even on US pension funds to provide a constant flow of new money (exit liquidity) to the insiders and miners who control the system.
Truth 7: Real, Proven Alternatives Already Exist
The most tragic part of this whole story is that the problems Bitcoin claimed to solve were already being solved by boring, effective, real innovation.
- Financial Inclusion? Kenya's M-Pesa reached over 90% of its population as of June, 2025. It uses simple SMS-based banking and transactions on feature phones, lifting 2% of households from poverty. It didn't even need a blockchain.
- Instant, Free Payments? India's UPI connects over 675 banks and has processed over 20 billion transactions a month (Bitcoin has processes ~9 million monthly). UPI is instant, free for users, and works for everyone from street vendors to corporations.
- Stable Banks? Canada's "boring" banking regulations (like leverage limits) meant they didn't have a 2008 crisis at all. No bailouts were needed.
The real future of finance isn't a speculative, energy-wasting token. It's thoughtful regulation, public infrastructure like M-Pesa and UPI, and diverse financial systems like credit unions and postal banking, which serve communities and actually bank the unbanked.
The real future of finance can’t be an energy-intensive Ponzi scheme.
Conclusion: The Choice Before Us
Bitcoin is a system that cannot survive without new investment. Its mathematics require new money to pay for early buyers. This has led to the ongoing, massive global wealth extraction in addition to a catastrophic resource wastage.
Now that crypto has gained political power, that "new money" needed to keep bitcoin alive is coming from public pensions and retirement accounts in the US, and from the savings and investments of people throughout the world.
This extraction is now politically protected.
Bitcoin’s story isn't about technology. It's about power, politics, and a multi-trillion-dollar pyramid scheme that has successfully captured the world.
This article summarizes some core arguments of The Bitcoin Pyramid. It's currently available on Kindle in eBook format. Do read it if you want a full, documented history of the failed promises, the political capture, and the proof of the extraction machine.
To better understand the energy waste caused by proof-of-work consensus, read The Bucket-Water Analogy.
Kindle Unlimited subscribers can read both books for Free!!
To better understand how cryptocurrency's narrative changed over the years, read The Complete Crypto Timeline: 2008 Crisis to 2025 Tariff Nightmare.
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