I love the idea of a monetary system that the central banksters can’t control and manipulate. While Bitcoin did have promise, the reality seems to be disappointing and often downright strange.
Last week the Bitcoin drama was focused on the collapse of Mt. Gox, the onetime preeminent Bitcoin exchange that somehow managed to lose around half a billion dollar’s worth of the currency — whether to thieves or incompetence, no one seems sure.
The exchange’s bankruptcy filing capped a tumultuous stretch for the five-year virtual currency. As of Monday, one Bitcoin was valued around $549, based on the CoinDesk price index of two leading exchanges. The value of a bitcoin started 2013 at about $13, soared above $1,100 in December and has since lost about half its value.
The price swings have hit some investors hard. Fortress Investment Group on Fridayrecorded an unrealized loss of $3.7 million from its purchase of $20 million worth of bitcoins last year. The asset-management firm held $16.3 million worth of bitcoins at the end of 2013, according to a filing with the U.S. Securities and Exchange Commission.
Also last week, Autumn Radtke, a young American CEO of virtual exchange Meta Pte Ltd, was found dead on February 26. Police said they were investigating her “unnatural” death, and “preliminary investigations showed no foul play is suspected.”
If the last two weeks have taught us anything, it’s that there is nothing magically transformative at all about Bitcoin.
According to Salon:
Mt. Gox’s woes impelled Japan’s financial authorities to announce that they will now start regulating Bitcoin. The founder of the online drug emporium Silk Road, once cited as proof that Bitcoin enabled resistance to the powers that be, is now in jail.
Bitcoin’s true value may turn out not to rest in its potential to liberate mankind from central bankers and government autocrats, but in its ability to achieve the much more prosaic task of moving money around the world more cheaply than it is currently practical to do so.
Think of Bitcoin as the 21st century version of a Western Union money order and you might not be far off.