The idea of creating a digital-only currency is as old as science fiction, with a lot of people throwing ideas around online ever since the geocities days. In fact, bitcoin is far from the very first of its kind, it’s just the only one that was entirely internet-based and successful enough to make it past a few hundred users or so.
What Is Bitcoin?
A Quick Starter Guide
The thing about bitcoin is there isn't actually a whole lot of stuff. In a way, the fact that it's completely untethered to anything real means that it doesn't fall until ... It can just hang there in mid-air for a long long time. It's not like housing prices. If housing prices are unrealistic, the more housing gets built, and you can see it. With bitcoin, the cost of producing new bitcoins has gone crazy high, so that's not going to happen. We're waiting for a Wiley Coyote moment. Cartoon physics. He runs off the edge of a cliff and it's only when he looks down and realizes there's nothing under him that he goes Pchew! So we're waiting for that sort of thing to happen, and that can go on for a long time.
A bubble is a natural Ponzi scheme; that's how Bob Schiller puts it. That as long as it's going on, everybody that bought in keeps making money, and it looks good. In the end, somebody's going to be left holding the bag. Everybody assumes it's not going to be them.
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