Entry 304: I Don’t Understand This Even a Little Bit(coin)

As I mentioned in my previous post, my daughter Casey got engaged on Christmas Day.  What I didn’t say is that the guy she’s going to marry is a miner.

Now let me say at the outset that I have nothing against a blue-collar worker marrying my daughter, even if he has a sooty face from working long days down in the mines, singing traditional mining songs in a deep voice. But Casey’s fiancée Alex is not a blue-collar worker. In fact, he’s in the tech industry, so I believe he just wears t-shirts on the job. He’s a no-collar worker.

Also, the only time Alex spends below ground is when he’s on the subway. He’s not that kind of miner. He’s not digging for coal, or diamonds, or a heart of gold, or anything else that might be remotely useful.

He’s mining Bitcoins.*^

DISCLAIMER: For the remainder of this post I have absolutely no idea what I’m talking about.

For those of you who have not heard of Bitcoins, congratulations. You probably have not removed the skin from your scalp by scratching your head and saying, “What the hell?”

You get Bitcoins by mining them. Or, more accurately, you have a computer like the one shown at left mining them for you. I know, I know: it doesn’t look like any computer you’ve ever seen, and you would look silly sitting with it on your lap on a plane.  Nevertheless, Alex paid something like $1500 for just such a computer, and it can’t even play solitaire. As I understand it, all this computer does is solve mathematical puzzles all day long, and if it solves a puzzle before all the other mining computers in the world solve it, it wins Bitcoins, which is just like winning a Publisher’s Clearing House sweepstakes except no one comes to your door with an oversized check, and there’s no actual, you know, money.

As near as I can tell, a Bitcoin appears to be some sort of alternative, virtual, international, make-believe currency that may or may not be worth something and, if it is worth something, may be worth $766.70 or $76.67 or $7.67 or 76¢ on any given day. Evidently, it could have any of those values–or any other value–on consecutive days.

Bitcoins seem to be a tad volatile.

You may wonder what determines the value of Bitcoins. Again, as near as I can tell, the value of Bitcoins is determined completely at random, possibly via the use of dice. Or maybe some nut goes to a particular website every morning and says, “I think I’ll make them worth $1.98 today.”

Heck, for all anyone seems to know, Alex’s computer may be determining the value.

But let’s say you have some Bitcoins. What can you do with them? Well, you may or may not be able to buy things with your Bitcoins. Some bars and restaurants in New York have started to accept them. One guy managed to purchase a $100,000 Tesla automobile with them. And they seem to be very useful in the procuring of drugs, since they are supposedly anonymous and untraceable, and you have to be high in order to accept them as payment.

According to a definition I found online (where else?), Bitcoins aren’t money as much as they are a “proof of knowledge peer-to-peer payment network based on an open source protocol and a digital currency.” In other words, nobody has any idea what they are. And that’s part of their magic.

I do know that you will not find Bitcoins in a cash register or a bank vault. No agency is minting Bitcoins with pictures of imaginary presidents on them. You can’t carry them in your pocket, or flip one to decide who’s kicking off. You can’t use one to scratch off a lottery ticket, or to make a wish at a fountain. You can’t even toss them into a drawer with those pesos you brought back from Mexico because you couldn’t get rid of them all at the airport gift shop.

That’s because Bitcoins don’t really exist. People pretend they exist, just like many of the same people pretend that Klingon is a real language. But Bitcoins are not only a digital currency, they are a fictional currency. Like any work of fiction, Bitcoins were made up, in this case, by a developer named Satoshi Nakamoto, which is a pseudonym, and may not even be an individual, but rather a group of…well, I think I’ll call them pranksters.

I’m guessing that whoever he or she or they are has long ago sold his or her or their Bitcoins to people further down the…well, I think I’ll call it a pyramid, if you get my drift.

(As an aside, to prove that Bitcoins are fake, I offer the fact that Satoshi Nakamoto is an anagram for “tomato knish”** which everyone knows is not a real thing.)

Significantly, Bitcoins are not backed by any government or by anything tangible like gold. However, they are endorsed mightily by the famous Winklevoss Twins, who you may know from the movie The Social Network as the hapless guys who got totally ripped off on the Facebook deal and only walked away with about 65 million dollars. I bet they’re hoping Mark Zuckerberg buys a whole bundle of Bitcoins before Satoshi Nakamoto (who, as far as anyone knows, could actually be the Winklevoss Twins) says, “Ha, ha. Got ya!”

Call me old fashioned, but I’m not sure I want to live in a world where anonymous people can just make up money. Who in their right mind would ever get involved in such an obvious scam?

Oh, right.

You might think I’d have reservations about any future son-in-law who spends $1500 on a computer that does nothing but solve math equations all day so he can accumulate virtual money. But I acknowledge that I am so far out of the loop on this Bitcoin thing that if the loop we were talking about was the train in Chicago, I’d be in San Diego trying to hail a cab.

If Alex says there’s something to it, I believe him. Even after the following text exchange between Casey and my wife Barbara:

• Casey: Alex mined 7,000 Bitcoins today.
• Barb: Wow, really? Is that a lot?
• Casey: I have no clue.

Ten minutes later…

• Casey: Alex only mined 70 Bitcoins today. He had the decimal in the wrong place.

I would, of course, be worried if Bitcoins were Alex’s only way of contributing to their household. But he does, as I mentioned, have a real job.

However I can’t say I’m holding out a lot of hope that Casey and Alex will be supporting us in our old age.

See you soon.

*After I wrote this, Casey informed me that Alex was not, in fact, mining Bitcoins, and they had just been telling us he was mining Bitcoins because they didn’t want to confuse us (HAH!), and what Alex is really mining are Dogecoins, which are similar to Bitcoins but even dumber, because they began as a Bitcoin parody and are somehow based on photographs of shiba inu dogs that have been flying around the Web.  Seriously. The Dogecoin website even has this tagline: “dogecoin is an open source peer-to-peer cryptocurrency, favored by Shiba Inus worldwide.”  Having already finished the post, however, I decided to leave it as it was and just add this footnote, thus preventing my head from exploding.

^It is possible that there is no plural of Bitcoin and that you’re supposed to use it like you use the word “money.” In this case, the correct sentence would be “He’s mining Bitcoin.” However, my theory is that Bitcoins are not like actual money in any way, not even linguistically.

**If you don’t mind a few leftover letters.