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Robert Reed: One man's quest to comprehend cryptocurrency

Robert Reed, Chicago Tribune on

Published in Business News

Best as I can determine, under the rules of the aforementioned Satoshi Nakamoto, only about 21 million bitcoins can be issued. Right now, there's about 16 million in circulation, residing in digital wallets that make up the cyber marketplace. They bounce around there while demand builds for this limited supply.

There's even a handful of ATMs in Chicago that dispense bitcoins -- provided you put in cash to get them. No credit or debit cards accepted. By the way, anyone looking to spend bitcoin at a local restaurant, store or business is going to be hard-pressed finding someplace that accepts payment.

Meanwhile, the Chicago Mercantile Exchange and Chicago Board Options Exchange are getting their cryptocurrency operations up and running. They're following the lead of federal regulators, who have given them a green light, but are also preaching caution. Using the exchanges, investors will be able to bet on changes in bitcoin prices without actually buying bitcoin itself.

With regulators and exchanges providing greater legitimacy, are concerns about a bitcoin bubble overstated?

Well, let's just say a great big "POP" wouldn't surprise me.

I am loath to give personal finance advice, but my brief expedition into bitcoin land has uncovered way too much hype, confusion and uncertainty. I'm hoping nobody bets the monthly mortgage on it, nor overstocks a retirement portfolio with this type of speculative investment.

 

There's still much I need to learn about bitcoin. But, so far, here's my one big takeaway: Watch out or you're in for a fall.

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