Perry Glasser

WHAT WE TALK ABOUT WHEN WE TALK ABOUT BITCOIN

In Business, Economics, Economy, EDUCATION, Finance, Wall Street on February 26, 2014 at 6:53 pm

dollar20sign1Dollar$ is unable to resist the didactic opportunity of this ongoing story, but is not sorry to hit the many points over and over again.

Citizens can recover from flu; financial ignorance will cripple a lifetime.

Dollar$ expressed doubt about the entire enterprise shortly before Mt.Gox went dark, but finds the idea that sex traffickers, arms merchants, dope dealers, and other folks who need untraceable transactions are losing money to hackers and thieves not terribly disturbing

As for speculators caught in the downdraft, what did you expect for an asset that went from $12 $1,000+?  You did not have to be born in 1600 to know it was Black Tulip Time in Cyberspace again.

Some fools never learn.

You know a news story has legs when major news outlets are paying attention, but Dollar$ notes for the record that by the time The New York Times, ABC-News, or the Wall Street Journal catch the scent of a story, it is already too late for a Citizen. That aroma they detect is the aroma of burnt arse. You’d be far better off monitoring blogs—and so we humbly offer Dollar$.

The Great Casino

Banks LOVE transactions, which means any time money changes hands, as long as they are involved. That means credit cards and checks, and for most of us that means 90 percent of what we spend.

With small fees, they will eventually will own the universe. If there are parallel worlds, they will own them, too.

Think not?

Round up some friends and invite them to play poker at that neat green felt table in your garage. I won’t tell the cops if you don’t.

Supply poker chips, artichoke dip, chill the beer, but DO NOT PLAY CARDS. (Gamble??? Have I taught you NOTHING?? Are you an idiot???)

Instead of playing in your friendly game, after every hand, no matter how large or small the pot, extract a mere 2% before the winner rakes in 98%.

After enough hands, at 2% per hand, you will have every dime in the room. You will also have the keys to the cars parked in the driveway, several deeds to houses, and most of what had been future college tuition for the children of your players.

Look. Yours is a a friendly game. Your players are losing really slowly.

By comparison, Roulette at a Las Vegas casino rakes more than 5 percent. 220px-Roulette_-_detailThe amount dropped depends only on how many times the wheel spins. In your garage, the amount a player wins or loses in a night depends how fast new hands of poker can be dealt. Sure, a player or two will win many hands, and they may even quit winners some nights, but as long as the wheel is in motion and the cards are fluttering across the table, the house will eventually take it all.

The rake for Visa and MasterCard, depending on the merchant, is  between 2.5 percent and 3 percent. Walmart pays less—lots of volume. Mom and Pops Pottery Place pays more. The reason you can get discounted gas for cash  is that currency keep a transaction out of the hands of the bank.

And now you know why the financial regulators are sitting on their hands as the BitCoin Bubble floats away.

It ain’t their action.

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