Eastman Kodak Company (KODK)

[JLS]

Sorry, Bitcoin Fans.
Digital Currency Is Still a Dream.

According to the website 99bitcoins.com, there are 89 companies that claim to accept Bitcoin as currency, including Subway, the Massachusetts Institute of Technology bookstore, and the Museum of the Coastal Bend in Victoria, Texas. But I can’t imagine anyone actually using it to pay for something. Who would use Bitcoin for a purchase when it might go up by $500 in the next 10 minutes? And who would accept Bitcoin when it could go down by $500 in the next 10 minutes?

Whatever the original intention, Bitcoin has morphed into an asset whose only purpose is speculation. “There is simply no way to predict what it will be worth,” said Pete Kight, a fintech investor who founded Checkfree in 1981. That is its fatal flaw as an electronic currency.

Or, rather, that is one of them. The other flaw is the very quality that many of its adherents love most about it: It operates separately from the government’s fiat currency. “I call it the tyranny of brilliance,” said Kight. “When you work in fintech, you often see engineering genius get out of synch with what works in the real world.”

In the case of Bitcoin, he said:
There is this thing called the Federal Reserve. Its first job is to protect the financial system of the United States. For a cryptocurrency to be successful, it has to work out with the Fed how it won’t undermine the banking system.

I can imagine that after the bubble bursts, Bitcoin will continue to be traded. Maybe a few of the other cryptocurrencies will have similar trajectories (though most will dissolve into nothingness).

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