There’s a craze in progress. That’s not news to most. The cryptocurrency madness has been well publicized. It’s even had a part in the recent presidential campaign. And quite a few traders are basking – and profiting – in the glow.
People try to sell me one crypto scheme or another at least once a day. I try to demur gently, but the more aggressive ones can be more tenacious than an insurance salesman. When I say that I’m not interested, they act as if I must be mad. “This is a rocket going up! Don’t you want to get in on it?” I told one hawker that I have money enough for three lifetimes. I think the idea that anyone might have “enough” money was incomprehensible to him.
The whole thing has me thinking of the Tulip Mania in Europe. If you’re unfamiliar with it, Charles Mackay covers it in his excellent Extraordinary Popular Delusions and the Madness of Crowds. Trust me, you need to read about this. I think future scholars of manias will probably have similar things to say about the crypto craze.
Recently, when approached by a new crypto hawker, I’ve asked a single question: the one in the title of this piece. Not one of them has given me a straight answer yet. There’s a reason for that, and it’s not one they like to confront:
Is what that thing will bring.
Right now, there isn’t a lot being sold for cryptocurrency. At one point a car dealer made the headlines by announcing that he would take Bitcoin, the oldest and most respected cryptocurrency, as well as dollars. I don’t know whether he ever had to follow through on it. I also don’t know of any other goods or services for sale for a sum of any cryptocurrency. There’s information in that.
President Trump has spoken well of cryptocurrency as a competitor for national currencies. That may make a particle of sense: one fiat currency is very like another. Cryptocurrencies, being privately managed rather than State-controlled, have at least one virtue the dollar does not. But every one of them is a fiat currency, which means that they share the principal demerit of State-controlled currencies: they cannot reliably store value.
Cryptocurrencies also require access to the Internet… and the Internet is de facto under the control of the federal government of the United States, which could block access to it at any time. Keep that in your mental calculations.
I know a couple of people who have faith in crypto. One of them has amassed quite a lot of it, and considers herself wealthy thereby. That’s her business. I wish her well, but I don’t share her faith. Part of the reason is that every cryptocurrency is a software artifact, and there’s no one on this ball of mud who knows more about software, or the vulnerability of software artifacts, than your not-particularly-humble Curmudgeon. Always remember Porretto’s Misanthropic Axiom:
For Every Engineer,
There Is An Equal But Opposite Engineer,
And He’s At Work As We Speak.
Mark my words: He’s at work on Bitcoin right now. The rest is an exercise for my Gentle Readers.
2 comments
Besides the Internet
You need POWER. Like plain good ole fashioned ‘juice.’ The ‘net relies on that as well, but in some instances, the ‘net -might- be up in some areas and still be operational (see how we have blackouts like you read about here in FL) whereas the rest of the country, things are still operational
Have a major NATIONWIDE power disruption, and -poof-
Allll them ‘bitwhatzits’ are gone
Nonexistent
Nonrecoverable
And I completely agree vis-a-vis “What good is it for?” What CAN you buy w/it? Better yet (and I’m a HUGE ignoramus on the how/where/what of crypto and admit it) but even if you DO have it “in hand” HOW do you sell it for cash money?
That person who is “wealthy” in crypto is as actually “wealthy” as one who holds vast sums of paper US dollars in their bank account. Both can be gone in an instant.
That person who is wealthy in crypto should answer the question “what can I buy with it?” with the answer of “gold and silver that I hold in my hands.”