Welcome to crypto-currency land

These online crypto-currencies have made the financial world more fun. It’s all so gloriously bonkers. First there was Bitcoin, the ‘peer-to-peer’ online payment system founded in 2009. Almost nobody understood how it worked or what a Bitcoin actually was — something to do with chains of code, computer ‘mining’, and a ledger system — but that didn’t stop anti-government types everywhere embracing the idea. A decentralised currency that politicians and bankers cannot manipulate and spoil — what’s not to like?

Following Bitcoin, all sorts of junior crypto-currencies have popped up, mushroom-like, across the web. There’s litecoin, namecoin, novacoin, worldcoin, quarkcoin, feathercoin, alphacoin to name only several out of thousands. Are they the future of money, or just a series of Ponzi schemes? Nobody knows. The fun part is trying to figure where — if anywhere — the libertarian gobbledygook ends and the value begins.

For would-be speculators, the sensible advice is to be very sceptical. Crypto-currencies have been called the ‘new wild west’, and it’s easy to see why. Digital coins soar and crash in value, appear and disappear, on the whim of crowds or for no discernible reason. Sophisticated hackers will always be a thousand clicks ahead of the average punter. Every new crypto-currency that comes along claims to be safer than the last, but because they are beyond state control, there is usually no legal recourse if you find your digital dosh has been swiped overnight.

The whole ‘crypto space’, as analysts call it, is alarmingly anonymous: there’s a trading website, www.mcxnow.com — ‘Join the investment class today and leave behind your wage slave lifestyle now!’ — which has ‘rich list’ tables purporting to show the 25 biggest holders of various crypto-currencies. But who are they? Again, nobody knows.