If you want to get a bitcoin mogul upset, just ask them how well their investments performed in 2014.
The usual response is to look at the long term picture. Bitcoin is still up over 1500% since the beginning of 2013, and up much more since inception. The early adopters are still sitting on a very nice profit, although that profit has been hurt by their faith in the concept of cryptocurrencies. Since the peak, the currency has lost 75% of its value. If you have faith in bitcoin, you’re getting punished for that faith.
The performance of bitcoin has confirmed Warren Buffett right after he said it’s a mirage best avoided.
The faithful say a rebound is coming. They also say new cryptocurrencies are going to take the world by storm.
Joke-turned-bubble Dogecoin took the Jamaican bobsled team and Nascar driver John Wise by storm, but it’s been clear skies elsewhere in the world. One Dogecoin will get you 0.000145 USD, or a loss of 87% from the top.
Unlike with Bitcoin, Dogecoin’s early adopters have not seen any profits at all, and the losses from the currency were enough to erase many of the profits from holding bitcoins. At least with cryptocurrencies, diversification is not a good thing.
And for the general public, actually buying and using cryptocurrencies remains too… well, cryptic. Few Americans have heard of it, and those that have, do not understand it. That makes buying, let alone using the currency, difficult to say the least.
While the general public misunderstands cryptocurrencies, it also seems that cryptocurrencies fans misunderstand money. In a speech to the London School of Economics, sociology professor Nigel Dodd lambasted the currency and its followers for fundamentally misunderstanding what money is. Arguing that money expresses a social relationship, Dodd says the failure of bitcoin and other cryptocurrencies is in its attempt to remove money from its social context—a logical impossibility.
Cryptocurrency fans will not relent, however. Their love of their bitcoins, litecoins, and dogecoins transcends many very concerning signs.