Exit Sign, by James Howard Kunstler

James Howard Kunstler is skeptical of cryptocurrencies. From Kunstler at kunstler.com:

Shoeshine boys in airports ‘round the world must be whispering about Bitcoin as the crypto-currency coils upward to tickle the $10,000 line. Ethereum’s roaring up, too, along with most other cryptos, from Byteball Bytes to Tattoocoin (Limited Edition). Whatever else you think about it, this action is sending a message, perhaps several.

One would be Get Rich Quick, of course. Eight months ago, you could have copped Bitcoin for a mere $1000, and around Labor Day it touched $5000, which seemed, well, figment-ish. In the last two weeks it went all out hockey-stick, doubling. To a certain sort of mind this must seem irresistible. The result: a good old-fashioned mania. Digital tulip bulbs.

Another message probably goes something like duck-and cover. Some nervous nellies are seeking shelter in Bitcoin as they detect tremors in the more traditional markets creeping ever-higher to new records. To some degree, Bitcoin may be doing the job that gold used to do, providing the aura of a “safe haven” from a possible global financial mega-storm. The last time such an event came out nowhere (ha!) after the “permanent plateau” of 1929 collapsed, the government confiscated as much physical gold as it could get its paws on. So who wants to be there? (Echo answers….)

These days, the zeitgeist also points to new-and-improved government monkey business for shoving global populations into cashless monetary regimes where the authorities could monitor and control (and collect a vig on) all transactions — and there is the theory, at least, that Bitcoin’s block-chain computer math would be secure from any government’s clutches.

I’m not so sanguine about Bitcoin’s supposed impregnability, nor about many of its other appealing claims. The Mt. Gox affair of 2014 must be forgotten now, but back then some sharpie hacked 850,000 Bitcoins (valued over $450,000,000) out of the exchange, which was processing almost two-thirds of all the Bitcoin trades in the world. Mt. Gox went out of business. Bitcoin tanked and then traded sideways for three years until (coincidentally?) the Golden Golem of Greatness was elected Leader of the Free World. Hmmmm…..

To continue reading: Exit Sign

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