There are lots of smart people out there who seem to be making money (literally) in the new murky world of Bitcoins. I’ll confess that I don’t have any good grasp of how this new world digital currency works, but there seems to be some semblance of acceptance by those pioneers at the leading edge of this stuff. Even retailers and service providers are effecting transactions using bitcoins in parallel with plain old money.
Intuitively, it’s a stretch to think that a currency based on nothing can actually be a medium of payment for goods and services. In addition, if you can find or ‘mine’ this currency just by fooling around on the internet, it seems just a bit iffy for us hard asset types. We are reminded of the story of Jack and The Beanstalk. To summarize the story for those not born in the 1930′s, the mother of Jack was none too pleased when he returned home with a handful of beans as payment for the family cow instead of hard currency.
As it happens, the beans were not ordinary, but of the magical kind and all worked out well for Jack, who was in danger of being sent to an orphanage until that happened. Eventually, Jack winds up stealing gold coins, eggs and a harp from an unfriendly Ogre and then lives happily ever after with his mom.
We haven’t the slightest idea if the real life Bitcoin stories will wind up with modern day Jacks being eaten by Ogres or by them scoring great wealth. It is however noteworthy that Jack’s eventual wealth was acquired by theft and bravery rather than menial work.