Last updated on January 2nd, 2018 at 12:00 am
I’m not even terribly sure what bitcoin is: a currency or a commodity? It sounds like the former but it fails to exhibit the essential characteristics of money.It can hardly be viewed as a store of value. That requires at least a modicum of stability. Unlike the pound in my pocket, however, I can have no idea what a bitcoin will be worth tomorrow or in a year’s time. That, in turn, reduces its value as a unit of account. Why would another individual be prepared to accept my bitcoin for a good or service when its future value is so uncertain; for the same reason, why would I want to spend my volatile bitcoin rather than hoard it in the hope of further appreciation.So bitcoin is a poor currency…..When it comes to bitcoin, people really are buying it solely because they expect other people to take it off them later for an even higher price. There is no better definition of the greater fool theory than this….But I’m prepared to wait and see. I will not be risking my savings on what looks remarkably like the tulip mania of the 1630s…Warren Buffett also famously warned against investing in businesses you cannot understand. If ever there were an investment that fits this description, bitcoin is surely it….While bitcoin is soaring, the greater fools look like those of us refusing to follow the siren calls of the latter-day shoeshine boys. Like Joe Kennedy, however, I’m pretty relaxed about who will have the last laugh. What goes up like a rocket comes down like a stick.
Eulogy made by Tom Stevenson