Fool's Gold

Mt. Gox, that meeting place of postmodern currency speculators and Magic card traders, is kaput. As if filing for bankruptcy two months ago didn't make that obvious enough, the scammers behind the site are begging the Japanese government to allow it to be liquidated - whatever "liquidated" means in the context of imaginary e-gold.

"But it has Latin! That makes it real, right?"

If you have even the most basic understanding of finance, this is no surprise at all. If you're a reader of the Wall Street Journal, you're having a good laugh. A few of my favorite comments:

"Fake money turns out to be worthless. Whoever would have guessed"
~Christopher Holland

"Fake volatile money. Never understood the value of doing transactions in a currency that's more volatile than AMZN stock."
~Walter Smith

Not one tear is shed and that should clue you in right away that Bitcoin was, is, and always will be a scam. Despite its faults, the Wall Street Journal and other business papers are not in the habit of lying to itself or its readers in the same way as the sucker horde. At the end of the day, the numbers have to add up and with Bitcoin they never did.

"But the mathematics are robust!" I hear you say. It's the favorite excuse of libertarians for their various monetary schemes, whether gold buggery or states printing their own notes. Schemes that are obsessively technical while refusing to acknowledge the human dimension of economics because the proponents can't get a date.

In fact that poor socialization is exactly why Bitcoin was always doomed, regardless of how it looked in theory. Currencies, whether fiat paper or gold shekels or SNAP cards, are all social constructs. Value will always be a subjective quality, dependent on just how many people are willing to pay and be paid with the item in question. The US dollar, for example, is backed not just by the full faith and credit of the US government but also about three hundred million citizens and the most expensive military on Earth.

That's why inflation is such a distant concern for the US dollar, no matter how many are printed, and also why Bitcoin  never had a snowball's chance in Hell. Though it did turn a profit for the more cynical for a while, since the best money to be made in a gold rush is selling shovels.