Rent seekers think they are providing some value somewhere, but can’t identify how, because they aren’t providing any. They are able to extract a tax from various transactions, consuming resources without producing. They are a cancer ruining civilization, infecting governments, corporations and everything in between.
Instead of satisfying some need in the market, rent seekers satisfy some authority, which generally means less real work. The economics of rent seeking are that there’s ultimately someone printing the money to help them. As long as the host survives, the cancerous rent-seeking class can continue to thrive.
The classic example of rent-seeking is government bureaucracy. Bureaucrats earn money through copious amounts of red tape, forcing companies and individuals to check meaningless boxes. There are two ways they get paid. First is direct taxation, through fees for approval and/or fines for noncompliance. Second is through monetary expansion, when the box checking does not pay for itself.
The rules around how you must treat employees are so vast and difficult to navigate that a whole department is necessary. Yes, they do provide some value in arranging for candidate interviews, but most of their function does not add value to the business. Compliance costs are entirely unnecessary from a product perspective, but are very necessary from a satisfying-the-government perspective.
Furthermore, all the compliance with government regulations results in some quid-pro-quo with government legislators. Companies which have shown loyalty are bailed out by the government when they get in trouble.
Worse than government bureaucracy and bailed out companies is the entire banking sector. These are the money printers and they can essentially reward themselves the benefits of creating their own money — an implicit tax on everyone else.
They rent seek by creating loans which have no opportunity cost. Each loan dilutes the dollar during the duration of the loan. Every loan, from T-bills to credit card loans benefit banks at the expense of everyone else.
People go into investment banking, not because they have a passion for it or are particularly talented at this rather esoteric profession, but because it makes tons of money.
Altcoiners are rent-seeking as much as bankers, which is to say that they create nothing of value. They take the worst of investment banking and venture capital combined with the worst of the navel-gazing meaninglessness to create a super-zombie.
The people investing in these projects want nothing more than to make money without doing productive work. The fact that early adopters do exactly that is evidence for these investors that perhaps they, too, can be rent-seekers through some magical Keynesian fairy.
Altcoins and fiat money destroy value, Bitcoin stores value for those that create it in an unconfiscatable, inflation-proof way. In other words, Bitcoin gives the advantage back to those who are being productive and creating value because there’s no central authority that can steal it.
I find it tragic that many people in the poorest countries in the world have been scammed by altcoins. Many in developing countries simply refuse to put money into Bitcoin as a result of altcoin scams. Every new altcoin adds confusion to a marketplace that really needs clarity.
VCs are no help as they are incentivized to pump the tokens they hold. Governments aren’t helpful either, since they want to protect their own fiat money and lump Bitcoin together with altcoins for that reason.
The exploitation of the people in the developing world is blood on the hands of every altcoiner.