In a classic case of bad news being dumped on a Friday night, last week the sorta fake sorta real money Bitcoin lost about 20 percent of its value following a rejection by the Security and Exchange Commission. Famous Social Network villains the Winklevoss twins had proposed the idea of a Bitcoin Trust that would have tracked the currency and rewarded investors. But the Securities and Exchange Commission rejected the idea because of just how unstable and unregulated the internet dough is.
As a longtime Bitcoin skeptic, I was all ready to write a post about how Bitcoin was screwed. I may have even written some drafts over the weekend in preparation for the grave-dancing. But when I sat down at my desk and looked up the latest news, I saw that Bitcoin had pretty much recovered from its dramatic plunge in just two days. Economics are complicated, especially once you add in the internet’s nonsense, but if the SEC couldn’t stop Bitcoin, can anything?
Bitcoin isn’t the only cryptocurrency, but the digital cash is by far the most prominent. And I get why internet money with a funny name sounds neat and futuristic. But totally unregulated global virtual currency not backed up by anything real or stabilized by market forces/government agencies brings back the worst, oldest problems of pure currency itself. Bitcoin’s unchecked instability allowed it to rapidly bounce back from this setback, but it also caused the seemingly fatal plunge in the first place. Violent value fluctuations are back! It’s like the Great Depression in a microcosm. Not too long ago folks were killing themselves after losing all of their money due to Bitcoin losing half of its value overnight. Bitcoin platforms have even taken money from their own users to recoup unbelievable losses. That’s some big bank-level evil.
Despite its obvious problems, Bitcoin has built up a stable coalition of extreme anarcho-capitalists who are probably thrilled this attempt at regulation failed, typical internet libertarians, racecar drivers/ransomware victims, people who really need to buy drugs on the Deep Web before the Feds seize their assets, obnoxious ads. And folks like me who ironically enjoy the idea of a currency with lore. To this day, no one is exactly certain who dreamt up Bitcoin, and that’s fantastic. It’s the fiat currency of the Internet Gutter.
So will Bitcoin ever go away? It doesn’t look like it. More merchants are accepting the online currency regardless of what the SEC thinks. Will it just become so unstable that it finally collapses from within? Or will it stick around until 2140 when the last Bitcoin is mined, and we’re left with a finite, hopefully, more controllable amount of the money. Personally, I can’t wait to use Bitcoin on my iPhone made of pure proprietary light to buy my monthly ration of Emperor Trump Water.
