Bit-coins

Good morning, Sydney! I trust that all is well with you this weekend. 'The Sunday Times' leads this December with some editorial comment on Bitcoin: gone, a fortune in pints, drugs and space trips.





'The Sunday Times' thunders that despite having few real-world uses, the online currency has soared in value. Bad news for the British man who threw away an old hard drive containing £5m-worth! But good news for Sydney, who might, some day, be able to spend a bitcoin on a weekend in Pyong-Yang, by when there may ultimately be no 's' after government!

'The Financial Times' also leads this weekend with some editorial comment on banking on Bitcoin: virtual currencies could rival banknotes, but not bankers. If a small city state had adopted Bitcoin as its national currency, it would now be in the grip of deflation as foreign speculators siphoned away its supply of the virtual currency. Money would be scarce, and prices would fall dramatically. Authorities might try to lift prices but they would lack one of their most powerful tools. Central bankers can create money at will, by printing notes or creating deposits. Bitcoin is based on digital tokens, which are generated at an unalterable rate by cryptographic algorithms running on the computers of volunteers, making it impossible to match supply to demand.

This is an improbable fantasy. But Bitcoin’s undulating value makes it unsuitable for all but the most limited purposes. Speculators are the keenest acquirers of the currency. For some, it is a way of stashing wealth where authorities cannot find it. Others want to make purchases without leaving an obvious trace. Silk Road, the online contraband emporium that was closed by authorities last month, was one of the few businesses to insist on payment in Bitcoin. But many prices were pegged to the dollar; the virtual money served merely as a way of disguising the flow of hard currency. The salmon pink newspaper concludes thus:



I propose some toast: to the first, the second and 'The Third! Three cheers from kleines c, Big C and the legendary bb (Sunday morning breakfast coffee)!

You may indeed, just as the likelihood that anyone in authority in such matters will take the slightest notice of such suggestions in the foreseeable future may be accordingly dismissed out of hand.

I would not say that this is "on the contrary" but it is true insofar as it goes; the same, however, can be said for anything and everything for the purchase or hire of which money is paid. I recall, for example, in Sotheby's in London, a cluthc of leters from Sibleius fetched little more than £100 but a scrap of paper with Schubert's handwriting on it sold for in excess of £60K.


In the more expensive parts of that city, you'd be lucky to get the front steps and entrance door for that!


Bitcoin is thus no different - it's just another form of currency. I'm not convinced, however, that "virtual" is a term that I'd use for any of it, even though, as you say, everything for which it's used is only worth the amount of it that each individual is prepared to shell out for it.


A much earlier one is credited with the phrase "never apologise - never explain".