bitcoin-miners
09
Sep

The Lunacy that is Bitcoin

It pains me to hear stories of somewhat successful bankers leaving their respectable posts to engage in this fuckery known as cryptocurrencies. Just the other day, I learned that a friend in Tokyo had quit his job at Nomura, and watched in horror the next day as he littered his social media with all kinds of posts on Bitcoin, exclaiming it is the ‘next big thing’.

Cryptocurrencies enjoyed a huge run in 2017, led of course by Bitcoin, Bitcoin Cash (different than Bitcoin), and Ethereum. What they are essentially, are digital currencies that can be ‘mined’ or created with your computer. You can then use that currency to buy real stuff. If that doesn’t make sense, don’t worry, it’s not supposed to, but know that the total market cap of all cryptocurrencies is now north of $150 billion.

This has led to a whole new type of financing for companies, called ICOs – an IPO, except with virtual money. These so called ‘ICO’s are completely unregulated, and has allowed companies to raise money in the $100 millions to ‘fund’ their companies, 99% of which are complete scams. What gets me is how the SEC has allowed these billion dollar scams to run rampant, without regulation.

Earlier this month, China made a decision to shut that shit down by banning ICOs, resulting in a huge sell-off in cryptocurrencies.

Interestingly enough, rather than supporting that decision to ban cryptocurrencies, Russia today decided to APPROVE that shit suggesting they have ‘become a reality’. Note that just a year ago, Russia was adamant on sending bitcoin users to prison. Granted, there is some kind of chicanery going on behind the scenes as Russian govt recently met with the founder of Ethereum, also another Russian.

In the big scheme of things, this is yet another bubble, uninvest-able. I cannot see how any government can approve, without some malice intent, of currency that can be created by some guys with a computer.

At the peak of the tulip bubble, tulips also traded like currencies and students went to universities to become ‘tulip lawyers’ – the same characteristics we are seeing now with cryptocurrency. People might ‘mine’ that shit in the interim, and perhaps make out with a buck or two, but sure as I am sitting here all these cryptocurrencies are destined to trade down to zero.