Bitcoins: Virtual money of the future or just an amazing scam?

Bitcoins, a virtual currency, are developing a momentum of their own. The Chinese government has banned financial institutions from trading in them; the UK government is thinking about taxing them. Some people are making big money buying and selling them. Should you have some Bitcoins?

Popular blogger Chris Brewer sizes up the phenomenal growth of Bitcoins, and ponders what it is that makes a currency so valuable. After all, cash notes are effectively paper until we put a value on them. 

Reading between the lines, he’s decided that now looks like it’s a good time to take some Bitcoin profits off-the-table. He says he’s got a few he’s willing to offload for some tangible Rands. Be warned: Chris likes to pull people’s legs.  -JC

Bitcoins: Virtual money of the future or just an amazing scam?

By Chris Brewer

Chris Brewer takes aim at bitcoins, in his usual, wry style.
Chris Brewer takes aim at bitcoins, in his usual, wry style.

One of the most interesting things to come out of 2013 was the growth of “bit money”.

What’s that?

I really have no clue but what I do know is that it highlights what “real” money is (or isn’t). By the way, you can’t explain what money really is can you? (Don’t worry, nobody can).

In my opinion, the concept of Money (Rands, Dollars, Shekels, Euros, Seashells) is, to put it simply, “complete and absolute faith in something for which there is 100 per cent evidence to prove that it doesn’t exist at all.”

There is no such thing as “money” (unless you want to use the term loosely to describe the digits on your bank statement).

The last time I looked, Obama had ordered more printing of currency (just like Mugabe did) which means the USA is over 17 Trillion dollars in debt.

There are not enough notes in circulation (in the entire world) to even pay the interest on that amount. There are just digits on a statement or on a computer screen – nothing can stop the debt getting bigger because it’s out of control.

And then some bright sparks said “well let’s create internet money – we’ll call it ‘Bit Money’ and I’ll bet people are stupid enough to trade in it.” (Which they now do on stock exchanges all over the world by the way – making deals with “money” that doesn’t even PRETEND to exist.)

It’s quite a clever move really. Because not one ordinary person on the planet knows what “money” really is, why not simply invent “internet money”? There are millions of people who’ll buy that concept.

There are plenty of Bit-Coin traders. In fact bitcoinaverage.com says that at the start of November last year the coin was changing hands at R2,000 and by the end of November it was trading at R11,000. That’s a helluva profit.

As I write this (11 January 2014) it’s being quoted at £560.60 (R9,687).

For a coin that doesn’t exist.

How far can human faith be stretched? How gullible can people be?

(By the way, I have two bit coins if anyone’s interested. I’ll let them both go for a discounted R15k. First come, first served).

Chris Brewer is CEO of Brewers Data Services, which manages on-line database Apps of all advertising agencies, major advertisers and all media in South Africa. His blog, Brewer’s Droop, is republished here on Biznews.com with his kind permission.

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