Bitcoin - too crazy, too late?

This is sort of IT related, so thought I would share my thoughts on the virtual currency Bitcoin and crypto currency, which seems to be all over the news at the moment. I have been keeping an eye on Bitcoin from the early days and I nearly did buy some, but I kept thinking, is it all a bit crazy, am I too late or is it just another scam? To be honest, I wasn’t really interested in the money side (although a big plus mind - could have been a millionaire, money in pounds sterling thank you very much) it was more about building a massive server (years of IT could be put to some use) to so some mining, more on that further down.

Just a quick bit of background. At the moment, in the real world, if I was to say buy a television, the man in the shop scans my card and my bank comes back says I am good for the money and everyone is happy. It has been this way for a very long time. Now, if I want to spend Bitcoin there is no bank but there are lots and lots of "book keepers" all keeping tabs on my account. While, the man in the shop may not trust one individual bookkeeper he will trust all of them to tell him I am good for the money. What is in it for the book keepers, well every time a transaction happens one of them at random will earn some crypto currency for their work and in a very simplistic model this is what "mining" is all about. Now as virtual currencies become main stream, if I had a lot of virtual currency my concern is that the banks will start to fight back and in a fight (as much as I hate the "loads-a-money" bankers, I know who I would be betting on. 

While I can hardly say I am as green as a leprechaun's hat, I do like to think I do my bit for the environment.  So along came Bitcoin and all of a sudden people were buying high end machines with top end graphic cards to mine the currency (like I said nearly joined the "gold rush" but I was never really happy about the electricity usage for all of this, plus the kids wanted a big holiday and that won, kids eh?). Ever since then it seems to be getting ever more crazy -

https://99bitcoins.com/20-insane-bitcoin-mining-rigs/

Can you imagine living next door to someone with 50 or 60 high-end machines in their garage with fans to blow away an elephant? How long before someone burns their house down - maybe they already have. The problem is that even with the top end home rigs, they don't compare slightly to the massive server rooms being built across Iceland by the big players. In fact, more electricity is needed to power these server rooms than is needed to provide electricity to the locals. 

It isn't just Bitcoin, crypto currencies seem to be popping up all the time and every time a new currency pops up the miners turn their attention to the next big thing. At least now, you can buy servers on the cloud to do the mining for you. No doubt the criminals will get involved and somebody will hand over money to run 1000 servers when in fact they are getting a Pentium Pro (remember them). So while the bloke next door is trying to burn his house down or electrocute someone at least he knows what he is paying for and he may make a lot of money.

The whole crypto currency thing reminds me of the early days of social media. While I wish I had bought into Facebook, remember poor old ITV, who bought "Friend's Reunited" and the people who signed up for Bebo, there was always going to be winners and losers. While Bitcoin might go onto big things it's value can't just increase continually and people are talking of a bubble. We all know what happens to bubbles.

Anyway, back to why I did not buy Bitcoin, there's the bubble effect, the banks getting involved and I don't agree with the vast amounts of power being used. Plus as someone who works in IT, I am sure all those servers could be put to better use, even the search for aliens - not that ET has ever phoned back. More importantly, for those who remember the VW advert - "the man who bet a million on black when it came up red” the day I buy Bitcoin will be the day the whole thing will crash.

For more information :

https://www.theguardian.com/commentisfree/2017/dec/05/cryptocurrency-bitcoin-soul-damaged-faustian-pact-speculative-finance

https://www.bbc.co.uk/iplayer/episode/b09s3wbt/panorama-who-wants-to-be-a-bitcoin-millionaire