The End Of Bitcoin’s Beginning

This week’s halt, and possible collapse, of the Mt. Gox exchange may or may not prove to be the beginning of the end for Bitcoin – but to borrow Winston Churchill’s phrase, it is certainly the end of the beginning 스냅이엑스.

Mt. Gox had already lost its place as the leading Bitcoin exchange before the murky chain of events that led the Tokyo-based site to shut down. An apparently leaked internal document indicates that the site may have been the victim of a major theft, in which perhaps more than $300 million worth of Bitcoin “disappeared” from the exchange’s accounts. I put “disappeared” in quotes because, of course, Bitcoin has no physical manifestation.

Bitcoin exists only as the product of a computer algorithm whose origins are unknown and whose ultimate purpose is unclear. It has attracted a varied collection of users, including individuals who want to keep questionable dealings private, people who may want to keep part of their wealth hidden from authorities who have access to conventional financial accounts, and end-of-the-worlders who think civilized society is on the highway to hell and that for some reason they will be better off owning bitcoins when we all arrive there.

Bitcoin enthusiasts like to call it a digital currency, or cryptocurrency because of its encrypted nature. But it is clear now, amid the wild fluctuations in Bitcoin’s price, that it is not a true currency at all. It is really a commodity whose price fluctuates according to its quality and according to supply and demand.

As of this week, there are two grades of Bitcoin. One of the Mt. Gox variety, which nobody can access while the site is down and which may no longer truly exist at all, was worth only about one-sixth of every other bitcoin yesterday.

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