Make a fast million from bitcoin? My soul is damaged enough already | Julian Baggini

Im mixed up Inside already, although I want to avoid the Entire World of bitcoins, writes the author Julian Baggini

“If it works, I will give you a thousand quid.” Until recently, I had heard words like these in heist films from the lips of violent mobsters, uttered in dingy boozers or back roads. However, an unthreatening middle-aged man sitting opposite me in a south London craft coffee shop said to me it. The only South American narcotic involved was my Guatemalan white.

If you’re after quick money today, there’s no need to choose the risk of international organised crime when there’s lots of it flying about: cryptocurrencies and blockchains. Both worlds aren’t so far apart. Among the principal attractions of cryptocurrencies such as bitcoin and Ether is that they facilitate money laundering. But those want not while backers aren’t mafiosi but investors, looking for drab non-executive directors like me, filthy even a fingernail.

I was advised that the company aimed to raise tens of thousands of pounds in the upcoming few months. “Look it up,” the man opposite told me. I did. Despite their title, initial coin supplies are earnings of non-physical tokens of fresh cryptocurrencies. I find this overwhelming: you invent a money and get folks to present your money. Quantitative easing could be printing money, but it is being guaranteed by authorities.


What’s bitcoin and can it be a poor investment?

Bitcoin is the first, and the greatest, “cryptocurrency” — a decentralised tradable digital asset. When it’s a terrible investment is the $97bn question (actually, since that is the current value of all bitcoins in existence). Bitcoin can simply be utilized as a medium of exchange and in training has become more significant for the dark market than it has for many legitimate applications. The absence of any central authority makes bitcoin corruption –or regulation. That means it has attracted a selection of backers, from libertarian monetarists who enjoy the notion of a money with no inflation and no central bank, to drug dealers who like the simple fact that it’s hard (although not impossible) to follow a bitcoin trade back to a physical person.

It might seem like sorcery, however according to Miko Matsumura, co-founder of this Evercoin Cryptocurrency Exchange, we’re now seeing about 30 fresh ICOs per day, increasing over $3bn this season.

I was way out of my depth, without thinking about it however you do not turn down an easy million pounds for nothing. My first thought was that my interlocutor was a fantasist, but he also provided a good mention: a bona fide, respected academic and entrepreneur who had an option on the future company and said my man was “the right type of mad”. Fair enough: the people today making the money are more inclined to be nerds than sensible bank supervisors.

No longer is the old adage “If it seems too good to be true, it probably is” reason enough to dismiss these get-rich schemes. Even my prospective accomplice admitted cryptocurrencies were sort-of Ponzi schemes, albeit lawful ones that many have already successfully played. Bitcoins a year purchased for about $ 1,000 are worth over $11,000 today. The recent history of finance and international banking has shown us that as long as people believe something is true for long enough, the shameless, the roughest and the lucky can make fortunes. If you know when to leap before it crashes on to the shores of sanity — a rationality is in driving the tide of irrational exuberance.

‘If the cryptocurrencies bubble bursts, there are no prizes for guessing who’ll pay the heaviest cost’ Photograph: Brendan Mcdermid/Reuters

And yet I remain reluctant. This is just too new and weird for me, and this is actually the arrival of a legitimate industry. But I also feel a desire to not be squeezed into a world in which absurd amounts of money are traded by a financial and technological elite whilst everybody else is gearing up three-for-two deals in Aldi and wondering how to cover the mortgage, even if they’re lucky; the lease, if they’re less so; for the hostel if they have completely lucked out. It is a world in which the connection between value and money value is opaque at best, non-existent at worst.

What is more, I do not want to become rich through something that’s too good to be true because, as recent history has also revealed, finally my Dom Prignon will be paid for by individuals. The recklessness that resulted in the crisis is being paid for through the austerity that has hit on ordinary people hardest, although the easing supposed to fix the crisis has increased the wealth of people who already hold the most assets. When the cryptocurrency bubble bursts, there are no prizes for guessing who’ll pay the price.

Perhaps my biggest fear is the damage that could be done to what Faust could have called my soul. I felt the fear of missing out and the hypnotic power of unimaginable riches, and I do not want to collapse under its charm.

Then I realised that all that I wished to avoid, I was mixed up with. The fact is that lots of us have got caught up in the universe of finance that is speculative.

It began back in 1985, when Margaret Thatcher introduced a vision of culture in which “owning shares is as common as having a car”. Thirty-two years later, the share-dealer mindset has turned into more and more of us into speculators. Our homes aren’t houses but investments. When moving we can’t help worrying about whether we’ll end up losing out or winning. The game hasn’t been rejected by most tenants, they can’t get at the table. We are also made to speculate with all our pensions, as we’re confronted with many possibilities, all. Pupils determined by loans need to choose whether a university degree is a good investment.

Following the previous crash, lots of us railed against “casino capitalism” but we’re all living in the casino today, feeding the slots while still whining about the brash high-rollers at the roulette wheel. Folks like me refusing to up my stakes alter nothing. Somehow, we’ve got to shut down this gaming house.

Julian Baggini is a writer and runs on the Site Microphilosophy

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