This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bitcoin, Considered and Reconsidered

But it is a manufactured cap just the same. No different than OPEC deciding to limit production of oil. (Actually, it is a lot different because the actual oil supply IS finite and there ARE marginal costs to extract oil.)

You obviously know nothing about cybersecurity and cryptocurrencies.

Need I go through the litany of "breakthrough improvements" over the last 50 years that the Luddites couldn't possibly understand but were assured by experts -- all distinguished, well-meaning men and women of their field-- that they were perfectly safe for them and made their lives better? (Asbestos **cough***, Saccharine ***cough***, Red Dye #2 ***cough***, Portfolio Insurance ***cough***, Levered ETFs ***cough****)

To be clear, the technology is worthwhile, no doubt. What is dubious is the value of a virtual currency made scarce by manufacturing a cap.

Must Read: Big Mama's and Papa's Pizzeria Tried Selling Me Oscars 2014 Apparel This Morning

Don't you understand that this is the future?

Actually, what I don't understand is why we are diverting resources to "mining" virtual currency and that people actually place value on the practice.

Can we place value on the technology of transferring an item from one computer to another? Absolutely. This is breakthrough.

But bitcoin as money?

If this is about "the future," I wonder why we are using all of these resources towards mining things in the virtual word instead of trying to figure how to mine things in the real world, cure cancer or develop a more fuel efficient car.

A market economy is about the efficient allocation of resources. If we are allocating resources towards solving ever-increasing-in-difficulty hash blocks in order to "mine" digital bits in virtual reality rather than solving real world problems, I think we have lost our way a little bit...

Have you even studied the protocol going through the hexidecimal hash-blocking algorithm which creates value to bitcoin as a currency?

I have seen the slide show, yes. I think what is happening is people are so focused on engrossing themselves in the details and processes that they are missing the larger picture.

Best explanation of it was given to me by Walt Whitman:

WHEN I heard the learn'd astronomer;

When the proofs, the figures, were ranged in columns before me;

When I was shown the charts and the diagrams, to add, divide, and measure them;

When I, sitting, heard the astronomer, where he lectured with much applause in the lecture-room,

How soon, unaccountable, I became tired and sick;

Till rising and gliding out, I wander'd off by myself,

In the mystical moist night-air, and from time to time,

Look'd up in perfect silence at the stars.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Eric Oberg worked in fixed income, currencies and commodities for Goldman Sachs for 17 years before retiring as a managing director.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs