Garrett (garote) wrote,
Garrett
garote

YAY BITCOIN!

I love this. LOVE it!

This is a fantastic repeat of the real-estate boom and crash that nearly destroyed the world economy only a little while ago, except it's just twisted enough to appear new.

Remember all those banks who sold crap loans as AAA investment products? Loans that were based on the idea that everyone's property values were going up and up and up? The only people who came out of that smelling good were the people who bet on it failing, and the people who managed to pass the buck fast enough to get their garbage products converted into hard cash and get the hell out.

But here's the ugly twist: Bitcoins are even worse than real estate. They are not even made of solid matter. They do not even occupy space. There is only one way they are given value: By some mechanism that converts them into "real" money. And since there is just this ONE way they have value, it creates a de-facto pyramid scheme: Any conversion you might make of bitcoins for money can only happen because someone else, somewhere, traded money for bitcoins, and that money is sitting around ready to settle the debt.

In other words, the only way that rabid fervent bitcoin supporters can GET OUT of the market is by first SUCKERING IN a whole bunch of other people. Not to mine more coins - that's only profitable for hardware makers - but to actually trade bitcoins for real money.

So they will yammer on about how great and glorious it is to own this vaporous currency, using their heady, convoluted synthesis of technological jargon and libertarian wheedling, and whenever real dollars go into the marketplace - at ANY rate of exchange - they will claw for them like pigeons clawing at a dropped sandwich.

Oh they may manage to claw back some real money before the whole system collapses, but the real profiteers will be the exchanges - just like the original banks were, the ones that assembled the toxic loans and shipped them off to their overly trusting peers.

Glorious! Boom and bust, and in the meantime, fugly modern-art installations of outdated PC hardware grow in dark basements all over the world like little tumors, sucking electricity and emitting NOTHING.

(Oh aren't we all jealous of those early adopters! We all better get in on the ground floor of some other equally inane currency! I'm gonna mine me some Dogecoin!)
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