You have no idea how happy I am to see a coherent response to the articles fobbed off on me every day about how Bitcoin (Ethereum, etc.) is Good For What Ails Ya, is Gonna Stick it to the Man, and will Bring the Developing Nations Out of Poverty — all with a slick dose or two of Pay No Attention to the Man Behind the Curtain.
The only thing missing from the various cryptocurrency snake oil medicine shows is the belly dancer.
My counter-arguments are either ignored or dismissed with enough hand-waving to induce a repetitive-stress disorder. It’s frustrating for me as a software developer with 30+ years of professional experience in everything from video and device drivers to games to large-scale real-time transaction systems, to read all this blather and be ignored when I bring up rational counter-arguments. It’s more frustrating because I’ve learned economics — at least avocationally — through the works of Sowell, Williams, and Mankiw.
I understand the value of the blockchain in principle — but I don’t understand how anyone could attach value to these virtual coins without a hefty dose of suspension of disbelief — or a complete lack of situational awareness. I kept writing about the Dutch economy c.1634 and the economics that lead to the US stock market crash of 1929, and all I got back was how some guy back in the 1990s said that the internet wasn’t going to be a big thing and he was wrong. There was never a mention of any service or item, predicted to fail, that failed, nor any mention of something picked to succeed that failed. (For example, Segway and more recently, 3D television and motion pictures.) You can always make the point you wish to make by cherry-picking the data you present, which makes the pitch little more than propaganda. The problem is that pushing propaganda almost always means you’re up to no good.
The round of pro-crypto articles that hit the web just before the recent $7K+ drop in the value of Bitcoin promoted investment in a particularly urgent way. They smelled of “looking for a bigger sucker than I am to let me cash out before this thing crashes.” You may (or not) remember that sometime around the turn of the 21st century, pay-phone franchisees realized that cell/wireless was going to eliminate the need for their product, and the air waves were full of ads offering opportunities to get into the lucrative business of pay-phone ownership. (I heard an average of two ads a day during my work commute at that time.) As long as one hadn’t realized that the phone one had pouched or pocketed was going to eliminate the need for pay phones, it must have seemed like a reasonable investment. I don’t know how many people were left holding that particular bag, and whether or how often the bag changed hands before the end — but someone was holding that bag.
As long as Bitcoin and its ilk continue to be composed of rainbow seeds and unicorn farts, I’m out, and I’m telling everyone I know to stay out. To that end, I have this article book-marked. It can’t be viewed enough.