Bitcoin is getting more famous. It's still bullshit.

 Let's take a break from the heavy stuff to point out what should be obvious, but apparently is not.  If you have been following economic news (the Coinbase IPO, more volatility in bitcoin's price, etc.), we are inundated with more and more stories about cryptocurrency, and bitcoin in particular.  It's still bullshit.  I have managed to dig up my original files from the "Bitcoin is bullshit" series, which I wrote when I was doing The Unmutual Political Blog, so at some point, I'll probably repost that somehow, but for now, I'll just issue a few reminders.

-  Regardless of any news you read now, the basic logical problems of bitcoin and other cryptocurrencies have not been solved.

-  The first problem is that any volatility in the price of an asset, including upward movement, makes that asset useless as currency because a currency needs to be a stable store of value.

- Downward movement means inflation.  The value of the asset is going down, and you can buy less over time, so sellers don't want to accept it.  They'd rather take a stable currency.  Like... a dollar.  Amid downward movement, you need to pay a premium, and at any point-to-point transaction, a seller that accepts cryptocurrency gets to determine the conversion price.  The list price will be in dollars.  You wanna pay in crypto?  OK, here's the crypto price.  But if I'm watching the cryptocurrency inflate, I'm gonna make you pay a premium to use that cryptocurrency to cover my risk.  Or... you can just pay in dollars, dumbass.

- Upward movement means deflation.  The value is going up, and you can buy more over time.  If that is happening, a rational buyer won't spend it because the rational buyer should keep it and let it accrue value.  If, for example, the price of gold is going up, people with gold don't offer it to stores in exchange for goods because they'd rather offer the store a dollar, and let the gold keep accruing value, but I'm not getting into goldbuggery today.  Instead, consider a stock, or at least, an ETF share.  You may have an ETF share as an investment vehicle.  In principle, you could offer that to a store to pay for a good, but if the S&P 500 goes up by an average of 8-10% per year, then using a portion of an S&P 500 ETF index fund rather than a dollar to pay for a good would be fucking stupid, right?  Same thing, if you think bitcoin is going up in value.

- That means either way, volatility makes an asset useless as currency.  Bitcoin is useless as currency to anyone with a brain, and since it has no use as anything other than currency, it is useless.  It is nothing but a vehicle for speculation.  Just because more people are involved in that speculation doesn't change the fact.  If you sell at a high, you made money.  You also got lucky.

- The core problem, though, which means that bitcoin can never really be anything other than a speculative vehicle is that you'll never be able to pay your taxes in it.  The government can't let you without undercutting the financial markets.  Might they issue their own blockchain currencies?  Perhaps, but they'll never let you pay your taxes in another currency.  Governments don't have debt crises when they denominate their debts in their own currencies, so you'll only ever be able to pay your taxes in dollars, not bitcoin.

- That means every bitcoin transaction involves pointless, stupid, unnecessary transaction costs.  You have to convert your dollars, from your paycheck, to bitcoin, and then the seller who sold you the goods has to convert the bitcoin back to dollars to pay taxes on the transaction.  That's two currency exchanges, and two sets of transaction costs, on which someone gets a cut.  If everything just happens in dollars, none of that money bleeds out of the system.

- That means bitcoin is intrinsically, necessarily, mathematically inefficient.  Always and forever.  Unless people stop charging you to exchange currency, conducting your business in bitcoin will always cost more money than conducting it in dollars, and it gets you fucking nothing.

- Unless your goal is to buy something illegal...

- Or you just want to make some pointless, stupid ideological statement, and you are willing to pay money to do so.

Coinbase's IPO changes none of this.  A dramatic rise, along with lots of dramatic drops in the price of bitcoin, changes none of this.  Idiots buying dogecoin... they aren't changing any of this.  And none of the arguments ever posed by bitcoin-bugs ever touch any of the logic here, which is the same as the logic I posed when I wrote the "Bitcoin is bullshit" series.  Why?  Because our politics have changed rather a lot, but math is still math, and logic is still logic, and bullshit is still bullshit.

Should you buy some bitcoin?  No.  Might you make money if you do?  Yeah, you might.  But you also might lose a lot.  Statistically speaking, you are better off with a diversified, passively managed portfolio.

And with that portfolio, you will read the occasional business headline about the loser in his basement who went from broke to millionaire on some obscure cryptocurrency or GameStop or whatever.  What you won't read are the headlines about the people who lost their life savings trying to replicate that and got the timing wrong.

Why?  The paradox of news.  Say it with me, folks.  "The paradox of news."  If you read a news story, that is because it is new, and different, and a break from the ordinary.  However, that tricks your statistically disinclined brain into thinking that it is the norm when the reason you are seeing the story is the very opposite.  I've been writing about "the paradox of news" for years, and I'll keep writing about it for years.  But I'm just some schlub, shouting into the void.  With a passively managed portfolio, because math works, and scams are bullshit.

Music.  Ranky Tanky, "Pay Me My Money Down," from Good Time.