The price of Bitcoins is skyrocketing at a head-turning rate—they're currently worth more than $200 each, up from $90 when we wrote this piece on the phenomenon two weeks ago—which has everyone wondering: Is this a bubble? And should you buy anyway in the likely event that it is? Here's what people are saying:
- Farhad Manjoo at Slate gives a first-hand account of the confusing and frankly downright shady process for buying the coins. "You've got to take several leaps of faith, trusting sites that look like they were put together by teenagers," he writes. But that's why he thinks this bubble still has legs. Bubbles, he theorizes, take off when mainstream buyers get involved. Once better Bitcoin sites appear, the masses will arrive, and "prices will begin to get really crazy."
- Speculators "are just laughing at all the people who are dismissing Bitcoin as a bubble," writes Henry Blodget at Business Insider. Because the most you can lose on Bitcoins is 100% of your money—and you stand to make much more than 100% back. Like, say, 600% (which investors have made in the last six weeks). That said, lots of things could obliterate the market, like hacking, or a government crackdown.
- Timothy Lee at Forbes thinks Bitcoins are a bonafide disruptive technology. "The Bitcoin economy today looks a lot like the PC market circa 1978," he observes. "Most people today look at Bitcoin and see an impractical curiosity." But Bitcoin isn't a product, it's a platform, and one with lots of room to grow.
- But Kurt Eichenwald at Vanity Fair is far, far less convinced, calling the system "very cool. But also very foolish." Bitcoins aren't a currency anymore—currencies are based on "a rational expectation of relatively stable valuation," and Bitcoin prices are anything but stable or rational. "In essence, the market is a fantasy," based on speculators and investors. And when they stop buying, who will replace them? "My bet? No one."
- It's worth noting that the price took a really nasty hit today, falling 24% from its intra-day high of $266.