I've witnessed five US recessions and have studied them as a historical phenomenon as a hobby. Here’s what I think about Bitcoin.
If you look at the fake coins bloodbath and bankruptcy proceedings going on right now, that alone is another dotcom bubble, and Bitcoin and clones turned out to be Flooz 2.0.
Remember Flooz? If you’re much under 40, you probably don’t.
There was going to be an “Internet Currency” that you could exchange USD for because online merchants weren’t established to take credit cards and stuff yet.
I got some as part of a promotion and used them to buy some cigars from cigar Web site through the mail when I was underage. I think the statute of limitations is up on that. It was over 23 years ago.
Anyway, Flooz got Whoopi Goldberg doing commercials for them, similarly to the way Matt Damon and others were doing Super Bowl ads for crypto exchanges that are now defunct, only months later.
Most of the Flooz (and similar company, Beenz) activity ended up being Russian oligarchs using it to launder money.
When the company shut its doors with no warning in the middle of the night (like crypto exchanges that now freeze transactions because there is no money and head to bankruptcy court), people flooded Web forums to complain that they had a bunch of them and when they called the 1-800 number it said the line was disconnected.
Bitcoin+Clones and the exchanges are just a fancy Flooz.
The problem is that cryptocurrencies got very big because people figured that it would always go up, it appealed to Libertarian cranks who thought they had something real like Gold or Silver (and they didn’t) just from some buzzwords about it not being “legal tender”, which turned out to be a problem when it lost 70% of its value and continues plummeting, and then the tax evaders started getting letters from the IRS saying “We know what you did last year and we want money.”.
Ironically, people who bought Bitcoins last year have about 29 cents on the dollar today, while people who just held onto the dollar still have 91 cents even if they didn’t invest it.
And a full inflation-adjusted dollar if they bought inflation-backed treasury bonds.
So while my sister-in-law is tearing out her hair, my Treasury Bonds have not lost a single penny.
She comes from the slums of Manila and fancies herself an investor who drives a BMW.
They’re probably going to want that back.
Anyway, “Flooz on a Blockchain” (cryptocurrency) didn’t actually work out all that well, like I kept trying to say it wouldn’t.
Now who will clean up all of these ridiculous Bitcoin ATMs?
They managed to litter them at Merchandise Mart in Chicago and at gas stations in the suburban ghettos, and they’re rather unsightly. ⬆