Joey DeVilla was (and still is) one of my favorite bloggers. Calling himself the Accordion Guy, Joey has been writing cool stuff for most of this decade, and he recently hopped on the bitcoin train by posting a long how-to in the vein of my own guide to mining. His is quite thorough in his process, but it sets an old HP all-in-one to the task, which resulting in very slow mining speeds and, as a result, a tangible waste of resources, including time, energy and computer wear.
For all his hard work, Joey saw between 3.4 and 4.4 cents. He also notes that his post, on his acceptably trafficked site with about 6,000 pageviews a day, netted him about $40 in advertising money. He made more money writing the post – which arguably took more work – than bitcoin mining.
Bitcoin is the perfect expression of Internet riches. It seems free (but isn’t), is easy to enter (but hard to maintain), and, in the end, as one wag, Joe Taiabjee pointed out on Joey’s post, it is the perfect example of the old adage “you make a lot more telling people how to make money on the Internet, than you can actually make on the Internet.”
So where does that leave the currency? The recent failure of trader Bitfloor and the recent rough and tumble ride that the market took these past few weeks make the world of Bitcoin a bit daunting. Continued DDOSes and attempts at phishing make it inaccessible and even dangerous, and the average computer user knows little if anything about Bitcoin at all, making it a reserve for the hacker with a bit of pocket money or a lot of powerful GPUs.
The question then is whether the “real world” should care about getting their change in BTC? I would wager they should, but not for the reasons many proffer. Anonymity is not overly important for the average computer user, although they could use a bit more security. Traditional money transfer systems like PayPal are rife with problems, mostly stemming from overzealous customer protection representatives.
The world needs Bitcoins to exist, even if the mass of humanity doesn’t use it. The goal of the currency is to disassociate the old methods of money transfer and to allow people true freedom in their ability to transmit value from one person to the next. A poor grandmother in the home village could receive money quickly and easily from the grandchildren without resorting to fees and trips to Western Union. Those on the move could hold their money in an account that is as liquid as quicksilver, allowing them to perform fee-free transactions anywhere. Refugees would no longer have to carry gold and instead could carry bitcoin. The utopian possibilities are, in a sense, endless.
But then we have the last mile problem. Where can you shop with bitcoins besides a few places that are accepting the currency as a marketing gimmick? Where is my BTC ATM? Will they take Bitcoin at the exchange desk in the airport? All of these issues – and they are essentially issues related to the acceptance of a “value-less” currency in the world marketplace – hurt the general approachability of the currency.
Bitcoin is only worth as much as the market says it’s worth, and without the ability to short without regulation the danger of holding money in Bitcoin is far too great. While the BTC market is one of the “purest” markets in the world, this also makes it one of the most tumultuous. Systems are being built to recreate traditional equities and currency markets, but instant, anonymous transfers don’t instill trust in non-risk takers.
I can imagine a day when Bitcoin will be worthless. That day could come soon. Or the naysayers could be wrong and BTC could be accepted worldwide. In some ways I’d like the latter to be true, but the pessimist in me says it will be the former. However, it’s a blast to watch this New Millennium currency get its legs.