Your Chance to Buy $100 in Bitcoins for $177
Look, I’ll be the first to admit that I’m not the youngest or hippest writer on the internet.
So perhaps it’s no surprise that I don’t quite “get” bitcoin. I mean, I “get it” to some degree. The blockchain technology underlying it is an amazing innovation in cryptology, with a lot of potential disruptive implications for the financial industry, yada, yada, yada. There are bitcoin enthusiasts’ “visions of liberation and revolution,” and cheaper retail-payment solutions to boot. For a while, you could buy drugs online with bitcoin, so if that’s your thing, I guess that’s pretty cool. And, perhaps most important, you simply cannot ignore the fact that a bitcoin that cost five cents in 2010 is now fetching about $574 and went for more than $1,100 in 2013.
Still, when you start talking about the “fundamental value” of bitcoin, I feel like you might as well start talking about the fundamental value of an Articuno. But as Clint Eastwood once said (in more lucid days before he started talking to empty chairs): “A man’s got to know his limitations.” And one of my limitations is wrapping my head around what’s a fair valuation for a bitcoin, or even how to go about determining one.
I assume I’m not the only one with that limitation, considering the value of bitcoin has jumped around like this:
This post was published at Bloomberg on Aug 5, 2016.