I had thought that when I previously wrote about bitcoin  and about debates over its longevity and legitimacy that it would be the end of it, but as it happens I have more that I want to say about the subject. As is common, my thoughts spring from a variety of directions and are a bit scattered, but I think that they indicate, together, a picture of the way in which cryptocurrencies have at least started to enter into the public consciousness. I am not sure the extent to which this is a good thing or a bad thing, but it is something I wish to note because such currencies offer a way for people to avoid many of the gatekeepers and financial pressure that exist in the highly regulated world of finance, and that can be for better or worse. It is perhaps something to be concerned about that there is so much going on in terms of contemporary economics that wishes to be below the surface and away from the prying eyes of rules and regulations. Be that as it may, I wish here to comment and not to censure.
Recently I read a story about Venezuela’s embattled president looking to a cryptocurrency in order to help boost his nation’s tottering economy and to avoid the pressure the United States has put on it. I myself am not particularly sympathetic to socialist regimes like Venezuela’s, and have an interesting personal relationship with their oil. Namely, once they sought to give discounts to leftist states in order to reward their support of Kerry in 2004, I stopped buying gas at Citgo, regardless of their prices, a policy I have remained since then. Most of our oil comes from unpleasant nations with troubled regimes, but if I have to get my car filled by oil from dictatorships, at least I can make sure I’m not rewarding leftist ones. Suffice it to say that I do not plan on supporting Madero’s efforts at avoiding economic collapse in his sorry excuse for a country, but I do find it interesting all the same that there is an appeal in cryptocurrencies as a way of side-stepping the influence of the United States, and if I had more sympathy for a regime in such a position I would be very willing to help them out, especially if it offered the chance at personal profit.
Needless to say, it is also of interest the extent to which bitcoin and related currencies have become a subject of interest at work. Most of my department consists of people who have at least some interest in how it works, from futures contracts tied to bitcoin to the logistics and mechanics of bitcoin mining to the volatility of the market. One of my coworkers even expressed some interest in acquiring sufficient hardware to engage in bitcoin mining, something which may lead to further updates along these lines. Since I have already begun receiving e-mails and advertisements relating to bitcoin and accounts tied to them, it appears as if the phenomenon is starting to move beyond those who could consider themselves financial insiders–I don’t–and into the wider public, although perhaps not entirely into the public yet. There is a certain amount of arbitrage in markets like this and especially where rules and regulations are somewhat lacking, the potential for insider trading is extremely high. The lack of transparency in such operations is an aspect of risk that few people consider when looking at the potential for profit.
It would be easiest to know if one of my former friends was interested in it. Once upon a time I knew and even worked for a disorganized accounting professor whose tastes in young women mirrored my own despite being my mother’s age, and one of his more interesting and worthwhile quirks was a tendency to be interested in financial investments at the moment they turned from sound investments to bubbles. In the late 1990’s he began investing in dotcoms. In the mid 2000’s, he became interested in real estate investment trusts tied to the property values of Central Florida, which were sure to keep going up. Of course, in both cases it was not long at all before what had seemed like a sure investment went belly up. If I knew he was interested in bitcoins or anything else, I would short that investment immediately and divest myself of whatever holdings I had in that entire segment. One has to know the sucker in the room, after all, because if one cannot see the sucker, one is the sucker.
 See, for example: