495. Bitcoin: A Mania, a Fraud, and a Bubble?

BROWDERBOOKS

Great news!  The new edition of my nonfiction title Fascinating New Yorkers: Power Freaks, Mobsters, Liberated Women, Creators, Queers and Crazies, will be released on February 14.  Why a new edition?  Because the original publisher, Black Rose Writing, declined to renew its contract and continue selling it.  The rights have reverted to me, and since it got good reviews, I have faith in it.  The new edition is updated in facts and has a much more colorful and appealing cover.  Even if you have the old edition, keep in mind that the new one will make a splendid gift.  It will be available from Amazon and Barnes & Noble in both paperback and e-book formats.

       BITCOIN:  A  MANIA,  A  FRAUD, 

                    AND  A  BUBBLE?

1 Bitcoin = $33,833.50.  So the Internet informs me. But what is Bitcoin?  A cryptocurrency, says the New York Times.  But what is that?  

"A decentralized digital currency," says Wikipedia, meaning that it has no bank or other administrator; those who use it are evidently on their own.  And there are at least three million users, probably many more.  It was invented in 2008 by a person or persons unknown using the name Satoshi Nakamoto.   

An invented currency?  Again, I ask why?  I'm perfectly satisfied with my US dollars, though I never have enough of them -- who does?  The dollar's reign as the preferred international currency continues, even though the controversial nutritionist Gary Null, in a departure from advocating healthy food, predicted its demise -- one of his many predictions that have failed to come to pass.  And his is only one of many such failed predictions.

There are Bitcoin billionaires, I am told, which makes me think of this as an irrational fad, a wild speculation, and a mass delusion, akin to the tulip mania in seventeenth-century Holland, and the Mississippi Bubble in eighteenth-century France, when people paid ever higher prices for stock in a company with exclusive privileges to develop the France's vast holdings in the Mississippi Valley.  In time the tulip bubble burst, and in 1720 the Mississippi Bubble did the same, the stock price plummeted, and the Scottish adventurer John Law, who had organized it all, had to flee the country.  

The mysterious Mr. Nakamoto, if he/she/it exists, may not share Law's fate, since he/she/it remains anonymous, whereas Law was a public figure, sought after even by countesses desperate for shares of stock.  But some investors in Bitcoin have a unique problem; they have a fortune in it, but they've forgotten the password to unlock the hard drive containing the key to their digital wallet.  Users have ten guesses, and if none of them provides the password, their fortune is seized and encrypted forever.  Whoever devised this crazy scheme is, in my mind, diabolical, and the users turned losers elicit from me a wisp of sympathy and the taunting pronouncement "I told you so!" or "What did you expect?" 

The whole Bitcoin mania I find crazy, deluded, lamentable, and inexplicable.  If someone can explain it to me as something other than a bubble, I'll listen, but their explanation had better be good.  In the meantime I'll hoard and caress my dollars, however limp and frayed  they may be.  Money is fiction, of course; I've done a whole post on the subject: #336, "Money: Is it even real?"  But the dollar fiction is free from encryption, time-honored, and less shaky than any other.  I'll stick with it until something better comes along, and it won't be Bitcoin.

©  2021  Clifford Browder