Thursday, May 20, 2021

Backed by the Full Faith and Credit of Techbros

 It's been a while since I've posted about Bitcoin, which is what I noted the last time I posted about Bitcoin.  This week saw a thirty percent drop in the value of Bitcoin (down almost 50% from its high point), which largely recovered... the plunge was, to a large extent, precipitated by Elon Musk's decision to disallow Bitcoin payments for Tesla vehicles and China's ban on cryptocurrency transactions.  This is what happens when your currency is backed by the full faith and credit of a bunch of Randian techbros.  A Deutsche Bank analyst came right out and stated 'the value of Bitcoin is entirely based on wishful thinking.'

I have a friend who was an early adopter of Bitcoin and, hilariously, is a socialist.  He's doing well, but I would note that early adopters of a Ponzi scheme tend to make out well when they get payouts- it's the late adopters who get shafted.  In a funny aside, years ago, he offered a prize of three Bitcoins for the first place winner of the New York Open Judo Tournament, and the winner, a French judoka, recently asked him: "Did you ever pay me those three Bitcoin?"

"Yes, you sold them for five hundred dollars."

Yeah, he'll do well, because he was an early adopter, and he's comfortable with the volatility of the asset, having cool head.  I really wouldn't want to invest in an asset that isn't based on anything.

And don't even get me started on Dogecoin, which started off as a joke, then took on a life of its own.  I seem to recall that Trump's candidacy also started off as a joke.


Richard said...

Not right now, because we are kinda busy surviving a pandemic that is still here, can you explain about this bitcoin?
For example, if i made some food and sold it to some nice people. They were nice and i enjoyed them.
It was fun to talk with them and they liked the food.
If they had paid in bitcoins, where
can these bit coins be redeemed? I'm old. I like dollars,pesos,dinars,shekels,krona,etc.
It is the same idea as money, but these bitcoins are not money.
I suppose that's why we are encouraged to use "credit cards".

Big Bad Bald Bastard said...

You need a digital 'wallet' to contain the bitcoins, which are created through a computational process, which is energy intensive and requires high end processors (typically used for video games). The Guardian has a good explainer: