Bitcoin is all the rage at the end of 2017. The interesting question is not why it has risen so high and so fast, but why it has not been made illegal. The most impressive observation about Bitcoin (and its block-chain brethren) is it has been allowed to run free, sucking in all and sundry, most who have no idea what a block-chain is, but who know their friends and neighbours have made a fortune from it. The mass media has been neutral-to-supportive of the speculation.
The question is why those that control the monetary system (i.e. the rich and powerful) have allowed this run given the revolutionary nature of Bitcoin? If Bitcoin succeeds they will lose control of their wealth and power to a bunch of computer anarchists with a cool idea.
The powerful if they wanted could shutdown Bitcoin and all the other block-chain currencies tomorrow – when you are using as much electricity as a medium-sized country you can’t really hide. Despite the risk nothing has happened. They are not stupid (well the people advising them anyway), so it does not make much sense that Bitcoin has been allowed to continue.
The only rational hypothesis I have been able to come up with is the intention is to ensure the general population do not just feel indifferent to Bitcoin (this would be the result of an earlier crackdown), but that they must totally hate it and the whole concept of the block-chain. Hate Bitcoin so much that no future idea like this can ever gain popular support.
With this in mind, the rise of Bitcoin makes much more sense. When the inevitable crash comes it will burn a huge number of ordinary people who have been sucked into the hype and speculative mania. The aim appears to ensure that Bitcoin (and by association all block-chain currencies) are seen as the greatest scam of the last 100 years.
If what I am suggesting is true then Bitcoin has some way to run yet (my guess is at least six months). The risk of overturning the current monetary system (and the wealth and power than comes from controlling it) is far too great to ever let any alternative arise. Bitcoin has to more than fail – it has to fail spectacularly. Everything is on track to ensure this outcome and the pain from the economic fallout will be long and deep (for the little people anyway).