Bitcoin is more popular than ever. Businesses such as AT&T, Microsoft, Visa, and PayPal all accept payment by Bitcoin and even small companies are getting into cryptocurrency. According to an HSB survey, one-third of US small and medium-sized businesses accept cryptocurrency as payment. If you invest in Bitcoin, I’m sure this is great news. To me, it’s more proof that a sucker’s born every minute.
Why the Bitcoin hate? Because it’s a con — always has been, always will be. Oh, it sounds good enough. Bitcoin is a decentralized digital currency that you can buy, sell, and exchange directly via blockchain-secured ledgers, instead of relying on an intermediary such as a bank with fiat currency. It uses cryptographic proof instead of trust in a government. Like fiat money, though, at day’s end, its value is in the eyes of its owners.
So, what’s wrong with that? As Robert McCauley, a non-resident senior fellow at Boston University’s Global Development Policy Center, recently explained, comparing Bitcoin to a Ponzi scheme is being too kind to Ponzi schemes.
True, unlike Ponzi or Bernie Madoff, “Bitcoin is bought not as an income-earning asset but rather as a zero-coupon perpetual.” In other words, no one promises you a return for holding Bitcoin, its value comes from selling Bitcoins to others. But what happens the day that no one buys Bitcoins at any price?
There is no bottom. Bitcoin could become valueless overnight,
As McCauley explains, the…
