I’ve received 10 blockchain and cryptocurrency announcements in just the past week. To save you time, I’ve summarized them here. I’m guessing the PR firms sending the announcements might quibble with my summaries. A market for investments you should never own now plans to use blockchain to track share ownership. You can buy a service that mines cryptocurrencies for you. Try to guess whether they price the service above or below the value of the mined coins. Another cryptocurrency exchange is opening. Hopefully, it won’t get hacked like the others. Another cryptocurrency is available. Cryptocurrencies are getting hacked. There’s another cryptocurrency app. And another app. Cryptocurrency “experts” are eager to get their messages published. Bitcoin could go to $30,000 soon. Of course, it probably won’t. “Experts” predict huge increases in cryptocurrency values. Of course, they might go down instead.

The technology used to create Bitcoin comes from the field I used to work in professionally. I’ve followed Bitcoin from its obscure beginnings to its recent bubble-like rise. After fielding so many questions about cryptocurrencies, it’s about time I organized my thoughts about Bitcoin as an investment and as a currency. To understand Bitcoin, you don’t have to understand the technology behind it. The big problem anyone can see with digital money is that after you spend it you still have a copy of it, so you can spend it again. Much of the effort in creating digital money centers on preventing this double-spending. Bitcoin does this with some clever cryptography and computer protocols called blockchain. Another feature of Bitcoin is that more money gets created over time. Those who do enough calculation with their computers get more Bitcoins. This is called mining, and is intended to roughly mimic mining for gold. Bitcoin as an investment Before Bitcoin’s meteoric rise, t...