June 18, 2011 at 13:29 PM EDT
Is The World Crazy For Bitcoin, Or Has The Bitcoin World Gone Crazy?
I last wrote about Bitcoin less than a month ago. (If you're one of the people who admitted in comments "I still don't get it," here's a terrific and detailed explainer from The Economist .) Since then the value of Bitcoins has quadrupled —and then halved . The founder of Sweden's Pirate Party moved all his savings into Bitcoin (which disappoints me; I had hoped they were buried on Oak Island ) just as US Senator Charles Schumer attacked it as "an online form of money laundering." Malware designed to steal Bitcoin wallets has been seen in the wild , and in possibly related news, 25,000 Bitcoins were stolen a few days ago. Meanwhile, the virtual currency's long-term stability has been seriously questioned ... but does it really make any sense to think about any "long term" at all for Bitcoin, given the insane volatility of the last month? Well, sort of. I concede it does look a bit like the lunatics, black-hats, and bubbleheads have conquered the asylum, but there's nothing inherently crazy or shady about a distributed online currency. What is kind of crazy is assuming that the first one that comes along will last and retain its value indefinitely, which is what almost everyone investing in Bitcoin is doing. (The rest are hoping to sell out to a greater fool, a strategy which admittedly made a few people wealthy during the South Seas tulip bubble and the dot-com boom, but - pretty much by definition - was a loser for most.) Does Bitcoin have a long-term future? I strongly doubt it ... but I expect that something like Bitcoin eventually will.
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