How Bitcoin could destroy the state (and perhaps make me a bit of money)

Last time I was here (two weeks ago; how’ve you been?) I briefly mentioned Bitcoin, an emerging internet currency I didn’t understand at all but via which I had nonetheless made a bit of money (£57). Since then, I’ve been reading up and the whole thing has gone supernova, largely thanks to the extent that the EU is dicking around with real money in Cyprus. God, but I’m just bang on trend, aren’t I? Good old me.

So. The first thing you need to know about Bitcoin is that it’s a peer-to-peer, digitised crypto-currency. No, please, don’t stop reading. Just hold that one in your mind while we talk about the second and third things you need to know about Bitcoin, which are far more exciting. For example, you can buy drugs with it! I mean, sure, you can buy plenty of other stuff, too, but I’m really not sure anybody actually does. According to one study, Silk Road, the main ‘buy drugs with Bitcoin’ website, has a monthly turnover of around a million quid. And thirdly — you’ll like this one, you capitalist Spectator types — its value is rocketing. A month ago — out of interest, rather than a desire for heroin, Mum — I bought £100 of Bitcoin. Two weeks ago, like, I said, it was worth £157. Today, it’s worth £213. Interested yet?

Actually, the second and third things aren’t as important as I made out. Mnyeh, drugs, you can buy them anywhere. And, sure, Bitcoin is bullish at the moment, but the value notoriously bounces all over the place (in 2010 somebody spent 10,000 of them on a pizza, a sum which would today make that pizza worth £465,368). So, no, far more interesting than the drugs and riches is the core idea, which is this peer-to-peer crypto business. For the non-tech-savvy among us, this basically means it’s not quite like any other currency we’ll have ever used. It doesn’t have a central bank. Nobody is in charge. A Bitcoin is a thing that simply exists, like gold.