Don’t fall for Rishi Sunak’s ‘Britcoin’

Do we need an officially-sanctioned, government-backed crypto-currency underwritten by sterling — a ‘Britcoin’ — as Rishi Sunak is said to be advocating? At first sight it is hard to see the attraction. Surely, there are two principle reasons why people feel attracted to Bitcoin and other cryptocurrencies. Firstly, if you are a drug dealer, you might hope that it is a way of keeping your stash of wealth beyond the reach of law enforcers. This hasn’t quite proved true, but you can understand why cryptocurrencies have their fans in the criminal world. Secondly, there is the hope of making a quick, speculative profit. The wildly gyrating values of Bitcoin and other cryptocurrencies make them pretty useless for day-to-day transactions, but it does have the ability to generate quick, massive profits for those who time it right — and corresponding heavy losses for those who get it wrong. This is the real reason cryptocurrencies have generated so much interest in recent years: they are a reinvention of the age-old ponzi scheme.