Intro / Preface / Extra Words
Reports of the death of fiat currency have been greatly exaggerated.
In this special-edition trash-fire issue I'm going to try to give you a 360 degree view of cryptocurrency, a category which includes the famous bitcoin.
- What is it?
- Where does it come from?
- Is it good or bad?
- Why is the price rising?
- What about the impact of the underlying technology?
The hypothesis I currently am testing in my own head is that the existing cryptocurrencies have value only as proofs of concept and buying in is more or less gambling. They do not have any actual underlying value unlike a stock which represents partial ownership in a business or a bond which represents a claim on future interest payments. Buying something without inherent value that can only rise in price if more and more people decide they want some is commonly called a pyramid scheme or a craze. Cryptocurrencies are basically beanie babies but without the actual beanie babies. Buying in is gambling that you aren't too late and won't be caught the one holding the bag when the market collapses. It isn't investing; it is speculating.
I do think the underlying tech aka blockchain is very interesting and may change our lives in (hopefully) good ways over the next couple decades. So check out a couple of these topics as we explore together and hopefully come away more enlightened than confused.
I love technology (and science)
All clear now?
So there we go.
- Blockchain is cool
- Cryptocurrencies as currently structured are pretty scammy
- Cryptocurrencies at scale use tons of energy and tie up the global supply chains of certain types of processors
- It is going to be really wild to see what comes out of all this over the next few decades
Shoot me any comments, questions, or random thoughts if you want, I'm reachable at bhfriedm[email protected]