The Guardian

The Guardian view on cryptocurrencies: bubble and chic | Editorial

The explosive growth of cryptocurrencies suggest there is more to the phenomenon than speculative froth. But what?
This picture taken on April 7, 2017 shows a man walking past a signboard informing customers that Bitcoin can be used for payment at a store in Tokyo. Frenchman Mark Karpeles, former CEO of collapsed Bitcoin exchange MtGox, heads to trial in Tokyo on July 11, 2017 on charges stemming from the disappearance of hundreds of millions of dollars worth of the virtual currency from its digital vaults. / AFP PHOTO / Toru YAMANAKA / Getty Images

All money is a work of the imagination. Pound coins, dollar bills, and even the fragments of computer code known as bitcoins can do their work only because of a collective agreement that they will. That doesn’t mean they are imaginary. Their power is real, but it arises from mass belief. When people lose faith in a currency it can lose all its purchase on the real world and or figures in a spreadsheet cell. So there is nothing unnatural in the efforts of libertarian computer programmers to invent their own money, and then to use these new currencies to buy things, among them old-fashioned currencies like dollars and euros. So long as enough people agree to believe in them, they exist like any other. Bitcoin, the oldest, best known and most valuable, has lasted for nine years now.

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