Blockchains and the crypto craze

Michael Roberts Blog

The cryptocurrency craze seems to have taken a dive in recent weeks since the Chinese authorities clamped down on speculation in the bitcoin market. The history of financial markets is littered with asset price bubbles, from tulips in the early-1600s to more recent examples, such as internet stocks in the late-1990s and US house prices before 2008. This looks like another.  The ascent of the virtual currency bitcoin, which recently neared $5,000 and has risen about 350% this year, has now turned round, dropping back to $3000, if still hugely above its initial start.  But it may be heading for a reckoning now.

Bitcoin aims at reducing transaction costs in internet payments and completely eliminating the need for financial intermediaries ie banks. But so far its main use has been for speculation. So is bitcoin, the digital currency that operates on the internet, just a speculative scam, another Ponzi-scheme, or is…

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About dmf

alienist @ large, mostly on foot
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