By Brett Arends, MarketWatch
If you’ve ever wondered what “cryptocurrencies” such as bitcoin, litecoin and ethereum are for, ask one of their legion of techie-libertarian fans.
And it’s dollars to dogecoins (yet another one) that the conversation will go something like this:
You: So what’s the purpose of bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.13% ?
Fan: The technology is absolutely amazing!
You: Yes, but what’s it for?
Fan: Really, the “blockchain” technology is a total masterpiece, way ahead of its time!
You: Yes, yes, I understand that. But what is it actually for?
Fan: You don’t understand! It’s a completely decentralized money system! Totally revolutionary!
You: Honestly, does it have a purpose? Any purpose at all?
Fan: It’s the wave of the future!
And on it will go.
It’s now an $82 billion market
Cryptocurrencies, or cybercurrencies, which were in a massive financial mania until their sudden selloff that started last month, have two actual applications: online gambling and money laundering. Neither is the heart of a major business model. But that’s it.
And these, preposterously, are the fundamentals behind a mania that has driven these currencies up thirtyfold, so that today, in aggregate, the market for them is a staggering $82 billion.
None of the defenders’ other arguments stack up.