Thursday, January 15, 2015

WaPo Laughs at Libertarian Bitcoin Fanboys

Matt O'Brien writes at WaPo;
If Bitcoin were a currency, it'd be the worst-performing one in the world, worse even than the Russian ruble.
But Bitcoin isn't a currency. It's a Ponzi scheme for redistributing wealth from one libertarian to another... 

And Gary North writes:
Bitcoins Are in Free-Fall: “Enrons”
A week ago, a bitcoin cost about $290. Today, $190. The price went through $250 like a hot knife through butter.
This is not a currency. This is a speculative market supported by programmers under age 30 with hardly any money.
This financial sinkhole has moved from over $1,200 in late 2013 to this.
A currency has to have stable value.  This crapshoot speculation has no trace of stable value.
This collapse will not be forgotten. Who is going to buy bitcoins as a “store of value”?
No one. Anyone who says that bitcoins are the currency of the future should stop smoking the stuff that $100 bills can buy in certain unlicensed markets, but bitcoins no longer can....
They should change the product’s name from bitcoins to enrons..

Ouch squared.


  1. Ouch, someone has a chip on his shoulder. It might turn out that judging Bitcoin by its performance in 2014 is like judging gold by its performance in 2013. Time will tell. I wonder if Gary North will then change his mind.

  2. "If Gold were a currency, it'd be the second best-performing one in the world, second only to the US dollar. (for 2014)

    But Gold isn't a currency. It is a 6000 year old bubble."

    I'm sure we can all find Matt O'Brien's thoughts on gold with a quick Google search, and make sure to take notes. Such notes can be useful for purposes of making fun of Matt O'Brien in the future. It's not a nice thing to do, but naughty things can be pleasurable...

  3. I don't even know why they refer to it as money.

  4. Gary is an exceptionally clear thinker, so I'm surprised he seems to only halfway "get it".

    The two most important features of a currency are that it serve as a store of value, and as a medium of exchange.

    Gold and, to a lesser extent, stacks of hundred dollar bills are great stores of value. They were once okay as mediums of exchange. With today's onerous cash reporting requirements, they are much less so.

    Bitcoin was a pretty good stab at a medium of exchange for the internet era. Unlike gold coins and stacks of hundred dollar bills, they can zip across the internet at the speed of light. Of course it has huge problems with anonymity (which something like anoncoin can solve) and security (which will be a tougher nut to crack), but it certainly is less cumbersome to get bitcoins out of Argentina than gold.

    However, no matter how a digital medium of exchange might get improved, it will never be a currency until some entity backs it with a store of value. That's a role that bitcoin's fanboys ignore, because it's out of their reach. If they tried it, they'd be in the cell block next to Ross Ulbricht. It would take someone with enough oomph not to get prosecuted (or nuked) by the banksters or their backers.

    I don't know who that would be either. But it sure is a more interesting subject to ponder than "how far will bitcoin fall"?