All Commentary
Thursday, November 2, 2017

It’s Total Madness in Bitcoin Land

Here is some elevator talk about Bitcoin, now that it seems like everyone cares.

“To the moon,” goes one popular slogan in Bitcoin circles. 

“No, I will not set up your Bitcoin wallet,” says another. 

Couple those and you get a sense of the attitude in the Bitcoin community right now. For eight years now, establishment financial and monetary experts have been putting it down. With prices now at dizzying heights, defying the expectations of even its biggest fans, Bitcoin has entered a new era. 

Will it suddenly crash again like it did last month? Probably. But no one knows when. And what happens then is the big issue. The whole history of this magic Internet money has been about crashes, except that those who held on throughout have made themselves rich indeed. 

The runup right now is conventionally attributed to the future’s market adoption by the Chicago Mercantile Exchange. Maybe. Or maybe last month’s correction just needed to happen to prepare the way for a new frenzy. 

Here is some elevator talk about Bitcoin, now that it seems like everyone cares. 

Q: What is the basis of Bitcoin’s value?

A: The basis of Bitcoin’s value is the use value of the service of its underlying technology called the Blockchain, which is a distributed ledger chronicling ownership rights. 

Q: What if it is hacked?

A: It’s never been hacked in 8 years. It’s secure. 

Q: Won’t government shut it down?

A: Government can control the coming and going to and from the Bitcoin ecosphere but it can’t control the network any more than it can control math itself. 

Q: Surely this is just a fad!

A: I’ve heard that since it was priced at $10. 

Q: But Bitcoin is not scalable! 

A: True. Prepare for a world of currency competition. It’s called the free market. 

Here is an interview I did on the topic just as the CME made its announcement about futures markets.