Wednesday, April 10, 2013

It’s not the Markets, it’s the Participants.

UPDATE:  Bitcon nerds say the slump yesterday was not the result of a DDoS, but rather a surge in interest from legitimate coin buyers. The currency slump, however, still occurred as reported, as the lag brought on by the surge in interest caused current Bitcoin holders to panic sell. They also announced that today they're under a DDoS attack.

UPDATE 2: It gets even sillier.

Interesting doings with the buyers and sellers of Bitcoins today. 

Never heard of Bitcoins? Me neither, until I read Farhad Manjoo’s piece about the virtual currency at yesterday. So ironic that today the currency should crash, oozing more than $100 per coin in value as what appear to be market manipulators attack various Bitcoin exchanges, hoping to harvest a profit as Bitcoin holders panic, sell their coins, which the attackers then snap up at bargain prices.
We’ve seen such shenanigans in any market where money is concerned, from the stock exchanges to currency exchanges to the tulip mania that swept the Netherlands in the 17th century. That it happened to Bitcoin isn’t surprising; given human nature it’s always been a question of when, not whether. 

This brings us once again to the fundamentals of it all: It’s not the markets, but the participants, that cause the trouble. And it’s old-fashioned greed (or maybe the new-fangled lulz) that get people to do such stupid, stupid things. Remember than next time you joke (even I joke about it) the Bank of Evil. Because whenever someone creates a good thing, sure as shootin’ there’ll be somebody along sooner or later to do something bad with it. 

I’m not saying Bitcoin is evil or stupid. Sounds like any other investment to me. I just feel bad for those folks who sunk too much into Bitcoin they weren’t diversified when the DDoS started. Maybe this isn’t over. But lordy, it sure doesn’t sound good.

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