Spent about forty minutes of Black Friday standing in the cereal aisle at the grocery store because apparently everyone in this town needed cranberry sauce and printer paper at the same time, and somewhere between the checkout line and my car I pulled up the Bitcoin price out of pure habit and just about dropped my phone. It crossed $1,000 on Wednesday. By Friday afternoon it was sitting around $1,240 on Mt. Gox, which is more or less what an ounce of gold was going for that week. People were actually typing the phrase "worth more than gold" without irony, and technically they weren't wrong.
I want to be annoyed about this. I am annoyed about this. But mostly at myself.
Back in the fall of 2011, right around when I started this blog, a friend of mine had a second computer running in his apartment that did nothing but hum and get hot. I want to say it was three graphics cards duct-taped into a case that was never designed to hold three graphics cards. The fans sounded like a hair dryer stuck in a wall. He tried to explain what it was doing: something about solving math problems to get "coins" — and I nodded along and thought, this is the nerdiest possible way to spend an electric bill. He offered to sell me some for basically nothing, a few dollars each, and I said no thanks, mostly because I didn't understand it and partly because I'd just paid rent and had about $40 to my name until the next paycheck. That $40 is a running joke between us now. Neither of us says the actual math out loud anymore because it stopped being funny somewhere around $50 and became something else entirely somewhere around $1,000.
Here's the thing that bugs me about how everyone talks about this online, though. It's split into exactly two camps and neither one is saying anything useful. Camp one is the guy on every forum thread insisting you're an idiot if you don't put your savings into it right now, tonight, before you miss out again. Camp two is the columnist calling it tulip mania and a scam for drug dealers, full stop, nothing more to see. Both of those takes require you to stop thinking about ten seconds after you land on them, and I don't buy either one. Something that goes from two dollars to twelve hundred dollars in two years isn't behaving like a currency, it's behaving like a chart people are staring at and refreiring (sorry, refreshing) every few minutes hoping to time an exit. That doesn't mean the underlying idea is fake. It just means the price right now has approximately nothing to do with anybody buying a sandwich with it.
My actual opinion, for what it's worth, since I clearly have no standing to have one: I think this specific number gets ugly before New Year's. Not because the technology is nonsense, but because anything that moves this fast on this little volume moves just as fast the other direction the second a few big holders decide to cash out for actual dollars to pay actual bills. Mt. Gox alone was reportedly struggling to keep up with trading volume this week, and an exchange choking under its own popularity is not exactly a great sign of a mature market. I don't think it goes to zero. I do think anyone buying in this week because of a headline is going to have a rough December.
None of which changes the fact that I'm sitting here doing the math on turkey-week 2011 again. My friend still has that mining rig, or he did last I asked, sitting in a closet now instead of running, because the electricity cost more than the coins were worth for a long stretch there before this month. He's the one who gets to be smug at Thanksgiving dinner from now until forever, and honestly, he's earned it. I got to eat two full plates of stuffing and go home. That's still a pretty good trade, most days. Today it doesn't feel like one.