Crypto keeps bouncing back

This time it was surely all over. As inflation started to rise towards a 40-year high, as central banks started raising interest rates for the first time in more than a decade, and as the monetary printing presses finally stopped running, the cryptocurrencies crashed.  What a crash it was. Bitcoin, the best-known crypto, fell all the way from $61,000 last November to less than $19,000 in June, a spectacular drop of more than two thirds. Ethereum, Solana and other, frailer ‘coins’ – as well as the even flimsier digital collectors’ items known as NFTs – all tanked. This appeared finally to confirm what the doubters had said all along. Cryptocurrencies

The ancient problem of the man who threw away £150m in bitcoin

James Howells has spent years trying to persuade Newport council to allow him to spend millions digging up a rubbish tip to find a computer hard-drive, possibly containing yet more millions, which he threw away in 2013. The ancients, who found obdurate behaviour fascinating, often explored such human failings in their myths, many of which featured horribly appropriate outcomes. Erysichthon (‘one who pulls up the land’) provides a good example. Let the poet Ovid explain. Erysichthon, a man who never sacrificed to any gods, hacked away at and pulled down a much-venerated oak tree, hung with votive offerings and sacred to Ceres, goddess of the grain that feeds the world;

The madness of El Salvador’s Bitcoin city

A golden city on the coast of the tropical Pacific. A metal walkway suspended above a verdant volcano. And a glossy marina that looks like it belongs in Monte Carlo rather than a near failed-state besieged by some of the world’s most violent criminals. The detailed gilded model released this week of ‘Bitcoin city’ – the first ever dedicated cryptocurrency trading hub, to be built on El Salvador’s western shore and powered by geothermal energy from a volcano – is nothing if not spectacular. The grandiose project is the brainchild of the troubled Central American nation’s headline-grabbing populist president, Nayib Bukele, arguably now the world’s foremost cryptocurrency evangelist after foisting

Crypto is dead

When Britain voted for Brexit, Macron boasted that Paris would eat the City of London’s lunch. It didn’t quite work out that way, with most league tables continuing to put London as the number one or two financial centre, with not a single EU city in the top ten. Emmanuel Macron’s government has now announced that it has invited Binance, a crypto exchange site, to set up a European HQ in Paris. You have to ask: has Macron leapt on a bandwagon which has already started to lose its wheels?  The warning sign for cryptocurrencies is not so much that they have crashed – Bitcoin is down 50 per cent from its peak last

Like it or not, cryptocurrency is here to stay

There was a time when you could read a book to keep up to date about a subject. Well, that’s over. If a week is a long time in politics, in crypto it’s like a geological period. By the time a book on crypto hits the shelves it needs to be in the ancient history section. The Cryptopians is an attempt to sum up ‘the first big cryptocurrency craze’ by Laura Shin, a financial journalist who writes for Forbes and who has a successful crypto podcast. Its scope is the first decade of crypto, from the creation of Bitcoin to the current frenzy of DeFi (Decentralised Finance) and NFTs. But

What Bitcoin’s crypto critics get wrong

What’s the truth about Bitcoin? Critics couldn’t be clearer: it’s a fad that can’t decide whether it’s a currency or a speculative investment. ‘You’re betting, essentially, on being the last person holding the bomb before it goes off,’ wrote Sam Leith on Coffee House. Many others agree. But Bitcoin’s critics are wrong: there’s nothing faddish about it. Bitcoin is a monetary revolution and is here to stay. Perhaps it’s no surprise that Bitcoin has attracted its sceptics. Understanding what it’s about isn’t easy. In short, Bitcoin is a monetary network, an incorruptible ledger, with the money supply fixed by code (there will only ever be 21 million Bitcoin). It allows

The Bitcoin delusion

Cast your mind back a few years to last week – when there was much laughing and wailing at the collapse of Squid coin, a meme cryptocurrency launched to capitalise on the popular Netflix show. It had gone to market, had rocketed 23 million per cent in value to $28,000-odd a unit… and then plummeted to zero on Monday morning after the creators cashed out for real-world money. Yet like the battle-hardened protagonist of the show, amazingly, the currency is down but not out. Yesterday it was reported to have been the top gainer in the global crypto market, having rocketed more than 800 per cent in 24 hours to…

Will China’s ‘digital yuan’ reinvent money as we know it?

What’s behind China’s latest crackdown on crypto? For some time, Beijing has banned bitcoin and other cryptocurrency exchanges from operating within its borders. Last week, the Chinese Communist party extended the ban to criminalise anyone dealing in crypto. ‘Virtual currency-related business activities are illegal,’ declared the People’s Bank of China. The CCP would ‘resolutely clamp down on virtual currency speculation… to safeguard people’s properties and maintain economic, financial and social order’. China accounts for nearly half of the world’s crypto mining, a process in which high-powered computers are used to generate the digital currencies. Most of China’s crypto mining takes place in the country’s most remote regions, such as Inner

Bitcoin’s whiplash volatility is still a problem

Crypto markets were in a tizzy over the past week following rumours – later quashed – that Amazon was planning to accept bitcoin for payments. Last Thursday, Amazon posted a job opening for a digital currency and blockchain lead, prompting a media frenzy that culminated with a report that the company would accept bitcoin payments by the end of the year. Bitcoin prices had been declining since April, but they surged by almost 15 per cent to hit £29,000, before moderating to around £27,000 yesterday after Amazon denied the report, saying the speculation around specific plans for cryptocurrencies was not true. Another roller coaster ride was to come, after Bloomberg

Should the EU diversify – with blockchain?

The European Investment Bank has warned that the EU is not investing enough in blockchain — the technology that underpins cryptocurrencies — and artificial intelligence. In a report released Tuesday, the EIB wrote that the EU is falling behind both China and the US in these two areas, with the funding gap estimated at between €5 billion and €10 billion annually. This is problematic because, as the bank argues, AI and blockchain are two of the most significant disruptive technologies of our time, and they will have a major impact on the future economy. At present, the US and China account for more than 80 per cent of annual equity

Comedy gold: the economics of internet irony

If you’re looking for proof we live in a computer simulation, consider the farcical story of dogecoin. Named after an internet meme about a talking dog, the joke currency was created as a parody of bitcoin. Dogecoin has no practical uses, yet online investors have ploughed billions into it. ‘We thought it would just make the viral rounds on social media,’ said founder Jackson Palmer. Last week the valuation passed $68 billion — more than Kraft Heinz and Ford. Palmer is now worth several hundred million dollars. Not bad for a Twitter gag. Although it’s seven years old, dogecoin wasn’t a big deal until a few months ago, when supportive

The problem with investing in cryptocurrency

‘This time next year Rodney, we will be millionaires.’ If Only Fools and Horses was still being made I imagine the scriptwriters would have got Del Boy disastrously deep into cryptocurrencies. Dodgy, Get Rich Quick schemes, skirting around the law always were his forte. And that is how I view cryptocurrencies.  The bulls will cry, Louise you are wrong! The price of Bitcoin has doubled since the start of the year and up over 500 per cent in a year. The value of rival cryptocurrency Etherium has risen more than 1,500 per cent in the last twelve months. But cashing in depends on buying and selling at the right time

Are cryptocurrency transactions the future?

To most of us, cryptocurrencies remain an esoteric world, beloved by nerds and incomprehensible to the rest of us. Does Visa’s announcement this week that it will now process payments directly in a cryptocurrency called USDCoin change that, and hasten us to a day when we will all have cryptocurrency accounts which we use to do our day-to-day shopping? You don’t need to understand the mathematics of cryptocurrencies and blockchain to work out that the prospect of shopping with crypto is rather concerning for two reasons. Firstly, cryptocurrencies are an unregulated Wild West. While the pound in your pocket is backed by the Bank of England and the pound in

Sell bitcoin, buy Tesla

Which is madder, bitcoin at $41,500 — oops, make that $31,000 on Monday — or Tesla shares at $880 apiece? Don’t get me started on the crypto-mania in which the Financial Conduct Authority has warned gamblers ‘they should be prepared to lose all their money’. But Tesla, relatively speaking, is a real thing: a California-based carmaker which has expanded the frontiers of the electric vehicle market that’s going to become huge in the next decade and could soon make carbon–fuelled road transport extinct. Put that way, it’s not so surprising — in tech stock terms — that investors should value Tesla higher than the rest of the US auto industry

Philip Green will be remembered as a nasty stain on capitalism

There really isn’t much left to be said about Sir Philip Green as his Arcadia fashion empire collapses into administration, taking the Debenhams chain down with it, unless a new rescuer steps in. An aggressive rag-trade wheeler-dealer since he started selling cheap jeans in the 1970s, Green was also once regarded as a brilliant merchandiser — until, it seems, he got too rich to bother keeping up with online competitors such as Asos, rising brands such as Zara and price-slashers such as Primark. So he won’t be remembered for his fashion sense — as the era’s other trouble-prone ‘King of the High Street’, George Davies of Next and Per Una,

Beware online investment apps and ‘experts’

Remember day trading, the fad for retail investors trying to emulate the hotshots of Wall Street from their spare bedrooms, and losing much of their money in the process? It is back with a vengeance, this time driven by a range of ‘disruptor’ apps which seek to lure risk-hungry traders by eliminating the cost of buying and selling assets. This time, the bets are even bigger. Controversially, some apps offer traders the chance to ‘leverage’ their bets: that is to borrow money to increase their gains. Or losses. The story of canny investors looking to outsmart the system — and the charismatic ‘experts’ that lead them — is as old

Has Hammond saved the high street? No, but every little helps

How much did Philip Hammond’s giveaway Budget help dying town centres? Not enough, say campaigners, but let’s give the Chancellor some credit. A one-third relief in business rates for retail properties with a rateable value of less than £51,000 means an annual saving of up to £8,000 for a huge number of small businesses; pubs where people still drink beer and spirits in old-fashioned style benefit from a duty freeze that one industry body says will ‘secure upwards of 3,000 jobs’; and there’s money to help convert disused premises into homes. On the other hand, there was a £3 billion sting for the growing army of freelance ‘consultants’ and techies

Data breaches show we’re only three clicks away from anarchy

An IT glitch afflicting BP petrol stations for three hours last Sunday evening might not sound like headline news. A ten-hour meltdown of Visa card payment systems in June was a bigger story — as was the notorious TSB computer upgrade cock-up that started on 20 April, which was still afflicting customers a month later and was reported this week to be causing ruptures between TSB and its Spanish parent Sabadell. Meanwhile, what do Fortnum & Mason, Dixons Carphone, Costa Coffee and its sister company Premier Inn have in common with various parts of the NHS? The answer is that they have all suffered recent large-scale ‘data breaches’ that may

Enjoy your feelgood summer – there may be trouble ahead

I’ve been on a mini-tour, full of echoes and warnings. First, to the Grange Festival in Hampshire, where we might still have been enjoying the summer of ’87: a moneyed audience in a Barings mansion laughing at funny foreigners in John Copley’s retro Seraglio (see Richard Bratby’s crit last week). Then to Oxford, to show an American friend the gardens of my alma mater, Worcester College, and recall the sweltering heat of ’76 that distracted us from revising for finals or noticing the Labour-driven economic crisis that would blight the start of our careers that autumn. Then to London, to make light of Trump with other American friends — and

High life | 15 March 2018

Gstaad I never made it to Zurich but met up with Steve Bannon through the miracle of technology, thanks to my hosts at the Swiss weekly Die Weltwoche, who gave him my telephone number. He rang at a civilised time and we had a very cosy chat for an hour or so. I don’t know how it was done, and don’t ask me for details, but I could see him and apparently he could see me too. The first things I said were that I was 100 per cent heterosexual and what a pity it was that I had to be initiated into this technology while talking to a man