[This article originally appeared in The Daily Reckoning on March 4, 2013]
Well, Fellow Reckoner, it’s been something of a sad week for proponents of Bitcoin…
Would-be buyers of the fringy cyber experiment have had to watch as the price of their beloved currency shot to within (as of this writing) a few cents shy of $35 per coin. No buyer wants to see that kind of action…unless they are also an “already boughter.”
In other words, current owners and maybe-one-day sellers are sitting fairly pretty. Since the beginning of January, the bitcoin price in dollars has rocketed roughly 270%. Not a bad move for those who spent the past couple of months “hoarding.” (The correct word, let it be on the record, is “saving.”) And not bad for a currency that suffers the ignominy of existing without the indispensable aid of a central bank.
To be sure, true believers will still be scooping the controversial coins up for what they surely see today as a bargain. As we remarked in this space earlier in the week…
“Speculation about the potential value of a single coin varies widely [in the bitcoin community]. We’ve heard wide-eyed forecasts running into the many thousands of dollars. That’s why enthusiasts are scrambling to build their stash now, before the price rockets….Get rich or die mining, as they say.”
Of course, as we all know, the Bitcoin crowd is really just a of cabal of dissidents, brimming with lunatics who would trust the free market to its own devices, without the tireless vigilance and service of the government. (“But who would build the…?”) What might happen if these malcontents were to gain traction, with their silly little ideas about “liberty this” and “freedom that”?
Imagine for a moment, Fellow Reckoner, a scenario in which the value of a currency was determined by the people who actually use it, and not by some all-knowing, all-powerful demigod on a Federal Reserve board. What might happen to central banks as they exist today?
Imagine that fees and charges more or less disappeared, so that opening a digital wallet was as easy as setting up an email account, and sending and receiving payments as simple as firing off a text message. What might happen to banks and financial institutions that today shower their loyal customers in myriad penalties and fees?
Imagine that bureaucratic red tape vanished into the ether, so that anyone with a sound idea and the gumption to see it through could enter the self-regulating ecosystem of service providers without need of state license or permit? What would happen to that friendly monopoly of mega banks steadfastly committed to fragilizing the global financial system…not to mention the chubby-mitted congress of politicians diligently taking bribes from them on our behalf?
Imagine that transactions of the currency were virtually anonymous, so that individuals could conduct their daily business, buying and selling goods and services, in cryptographically-ensured security and privacy. What might happen to the lifeblood of The State when it is unable to easily invade the privacy of its citizens in order to track and steal their money for them?
No! Let us imagine no more! We must put a stop to this. We must rage against these margin-traipsing ne’er-do-wells. And we must sully the name of their wretched cyber currency initiative.
And finally, we must hope the bitcoin price falls back through the floor…so a better buyer again we can be.
Joel BowmanThe Daily Reckoning
Ed. Note: For more on the “fringy cyber-crypto currency” as Joel calls it, sign up for the Laissez Faire Today email edition. It provides readers with regular updates on the likely future of Bitcoin and how you can take full advantage of it. Sign up for FREE, right here.
People are fascinated by cryptocurrencies. And even though there's plenty of evidence to support their validity as a medium of exchange, there's also plenty of reason to be skeptical. Today, Jan Skoyles addresses those skeptics and explains why cryptocurrencies are actually better than the fiat system that's currently in place. Read on...
Joel Bowman is a contributor to The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
I wonder how often you write about things you clearly did zero research on and have no grasp of. I could summarize this whole article in one sentence: “I don’t know what’s going on and I don’t like it!”
I encourage you to find a new line of work.
It reads to me like satire. Is Joel in favor or against the idea of BitCoin and Free Markets? I was thinking the former.
Pretty sure it was written in sarcasm.
I read it as very good satire. Its almost like hes half-sarcastically half wittingly suggesting another drop in the bitcoin at the end of the article, to once again rebuild & strengthen its legitimacy even more so(with less of a drug pushing base? which is becoming less prevalent), like it did in 2011 when people lost confidence in the coin and it plummeted and then software designers and what not seemed to come out with much more secure wallet systems, exchange systems, It all seems very developmental still, but the bitcoin ATM is what’s really exciting me right now. obviously that would/will take time to adopt/harness a reliable community around it who dispense necessary goods, but its so simple and works flawlessly, While rendering central banking obsolete at the same time. Wow!
Dammit. That’s what I get for speed reading
So everyone should boycott bitcoins because you didn’t buy any before the bubble?
Thought I would include a suggestion, at the end of any article written in a satirical vein, could you indicate the intent of the article (i.e. Above was a satire) just for those that don’t get it
Love your angle of attack. I was looking for a reason not to be a cheerleader for Bitcoin, and I’m glad you didn’t give me one. Thanks for the reassurance!
Buy LiteCoin – it’s where bitcoin was 2 years ago – nice and cheap
I totally agree with Joel. Why should anybody try to promote something as stupid as bitcoin, backed by nothing and nobody, when we have financial experts both at the Fed and in government to lead us.
Or you could just buy some Litecoin which is priced where Bitcoin was in 2010.
ignorance truely is bliss. troglodytes. lol!!
Seems Joel is comfortable with who runs the monetary systems. Bitcoin is for the Gentials of the world and for all others who have had enough with the corruption of the IMF,Bilderebergs, Rothchilds, and the Rockefellers of the world.
“financial experts” is an oxymoron.
Fool me once – shame on you.
Fool me twice – shame on me.
It looks to me like some smart scam artists are banking on the narrowness of “experts”, and their acolytes, education. It’s the new South Sea Island company. #southseabubble
The word of the day is "growth." With GDP screaming higher in the second quarter it appears social media stocks have taken this as a sign and have started showing their own outsized growth. Today, Greg Guenthner shows you how to play this trend for huge gains as the second half of the year gets in full swing...
Use what analogy you will: a car, a clock, a chemistry experiment... the point remains that the Fed believes it can control the economy. Indeed the Fed will stop at nothing to realize the goals of its dual mandate" to maximize job growth and maintain price stability. But, as Jim Rickards expalins, that conceit always ends in disaster. Read on...
When it comes to life-changing tech investments, venture capital has been at the forefront of the investment landscape. But now, there’s a new kid on the block that’s threatening the “old way” of doing things: Equity Crowdfunding. What happens when these two fields meet? Matthew Milner explains...
The NSA will tell you their surveillance programs protect you and the country from terrorists who seek to do you harm. But when you get past their talking points and prepackaged press statements, you'll find their search for enemies covers more people than you'd imagine. Mike Leahy explains...
The economist Milton Friedman didn't go far enough when he said, "Concentrated power is not rendered harmless by the good intentions of those who create it." In fact, as Bill Bonner explains, those same good intentions are often used as pavement on a road that leads to a rather ominous and fiery destination. Read on...
If the back-and-forth action in the markets has you banging your head against the wall these days, maybe you're concentrating on the wrong stocks. While the market churns near its highs and investors continue to fret over the makings of a possible correction, Asian stocks listed on U.S. exchanges are catching fire. Greg Guenthner explains...