Bitcoin is more than just a bit of a con

If you have one bar lying around, then I have a bridge to sell you.

Today, one bitcoin is worth R976,914.87. Yes, folks, a million SA bucks for an “asset” that you can’t see, taste, hold, smell or hear.

But wait, folks, there’s more. Not only does bitcoin have no physical tangibility — other than the ragged hole in your pension/bond/kids’ school fees — but its seesawing price makes a year 2000 tech stock look as stable as a grounded Boeing 747 with tumbleweeds jammed in its wheels.

A cursory survey of social media on any day will confirm that the world is in thrall to delusion. Just like the investors who lost not only their shirts but also their houses/spouses/trousers and reputations buying stock in the South Sea Co, an appalling concoction designed to stabilise Great Britain’s national debt by, of all things, getting involved in the slave trade.

“Investors”, ranging from royalty to shepherds, climbed in. In August 1720, the company’s share price topped out at £1,000, up from £100 less than a year earlier.

Then, those who could, sold. By September the stock was back at £150.

Unlike 2008, however, most of the company’s directors and various government officials were stripped of their ill-gotten gains, impeached, disgraced and, in the case of the British chancellor of the exchequer, jailed.

In the flotsam-strewn wake of the 2008 crisis, Warren Buffett ostensibly defended the credit rating agencies which, along with a lot of very greedy people, were the architects of the misery that followed the subprime mortgage debacle, saying that no-one could see the housing bubble for what it was because it was “a mass delusion”. Just like the South Sea Bubble.

In 1720, one of the promoters of the unfolding con job called it “an undertaking of great advantage, but nobody to know what it is”.

Which, come to think of it, may be the best description of bitcoin yet.