Bitcoin Ponzi not Bitcoin’s fault

This recently collapsed ponzi scheme was based on Bitcoins. It could have happened with US Dollars or Danish Krone or South African Rand, so it’s not really the fault of Bitcoins (to personify a digital currency momentarily) but I think there is a link.

Those who like Bitcoins are from four groups

  • Nefarious ne’erdowells who like the anonymity for their illegal dealings
  • Paranoids who don’t do anything wrong but like the anonymity. Yes, you are paranoid if you invest this much time in a Bad Idea called Bitcoins.
  • Geeks who want to try it out because it’s interesting and having 2 Bitcoins to digitally rub together (digital, digits, fingers, get it?) is kinda cool
  • Economically naive self-taught conspiracy theorists who drink too much coffee and like tea parties, who think that fiat money is the root of all evil but really don’t have a clue about how money works, why monetary policy flexibility is a good thing and just how very many financial crises there were during various gold standards. And for that matter, how almost every gold standard that ever existed also “failed” in that it didn’t last.

In my mind it’s the last group that is most worrying because they try to affect and infect other citizens. It’s also that group who thinks they know better and therefore everything to do with Bitcoins is a Good Idea (they’re not) and are more likely to get hooked into a Ponzi scheme than others because they’re too smart to listen to anyone else’s opinion or advice.

Possibly my bluntest post ever, but at least I have listened to the outside views, thought about them, and discarded the ideas from that last group of Bitcoin supporters while recognising the legitimate interests of the first three groups. Note the interests of the first three groups are no motivation for wider acceptance of Bitcoins, just that some individuals may have their own, internal reasons for wanting to use Bitcoins.