Number Go Up: Inside Crypto's Wild Rise and Staggering Fall

by Zeke Faux

THE FUNDAMENTAL ABSURDITY of all this is that the numbers in the Bitcoin blockchain don’t represent dollars, or even have any inherent tie to the financial system at all. There’s no reason why a Bitcoin should be worth more than a Dogecoin or any other number in any other database. Why would someone burn massive amounts of coal just to get a higher number written in the blockchain for their account? At first, the theory was that Bitcoin’s value would go up once it became part of the mainstream financial system. The idea was that if Bitcoin was a superior financial technology, then lots of people would want to use it for their financial transactions. And if lots of people wanted to use it, they would need to first buy some. When that didn’t happen, Bitcoiners started referring to the currency as “digital gold.” Nakamoto’s design limited the total supply of Bitcoins to 21 million. They argued that the limited supply meant the currency’s price was sure to rise. But, of course, just because the supply of something is limited doesn’t make it valuable—only 21 million VHS tapes of Pixar’s Toy Story were made at first, and you can get an original on eBay for three dollars. For Bitcoin believers, the rising price became its own justification. On stage in Miami, many of the speakers resorted to a sort of illogical reasoning: The price of Bitcoin will go up because it has gone up. They wielded this circular argument to ward off doubt and call forth a future of infinite bounty. It bec...