BitCoin is hard to explain. It’s a currency but unlike currencies based on the backing of a government or a gold standard or…you know…something…BitCoin was based on…I don’t know…nerd’s tears and puffery.

And now the whole thing is collapsing. Here’s ZDNet:

Well, colour me surprised. A virtual currency, backed by absolutely nothing except the fierce belief in the integrity of a complex mathematical formula few of its proponents even understand, is proving to be little more trustworthy than the Zimbabwe dollar after hackers tested and defeated controls put in place to manage it fall at the first hurdle.

In developments that should surprise nobody, the disastrous decline of Mt Gox –which has filed for bankruptcy in the US after being systematically owned and dismembered by hackers – has been followed by hackers’ theft of 12.3 percent of the Bitcoin stored at the Poloniex exchange.

This is the third Bitcoin exchange to fall already, and the hackers are only just getting started. As best known methods for compromising Bitcoin are rapidly shared worldwide and new, purportedly-secure currency aggregation points fall like Fort Knox in Goldfinger, Bitcoin theft will likely surge – and then die off, as flagging trust and demand drive its value through the floor.

A currency based on a complex mathematical formula that few understand? What could do wrong?!?

Well, let’s recall that Attorney Dan Backer wanted BitCoin to be used for campaign contributions just a few months ago. Because donating to elections in bottle caps and Monopoly money is so 20th century.

Here’s an editorial Backer wrote for Politico in 2013:

The federal government is on the verge of issuing a decision that could revolutionize the ways political campaigns are conducted and, in the long run, affect the spending practices of every consumer in America. The Federal Election Commission (FEC) has been asked to issue guidance to political campaigns on accepting contributions in the form of a new digital currency called Bitcoin.

It’s a great idea. Bitcoin political contributions will expand the number of Americans who can get involved in campaigns to support the candidates they want, how they want. It is the next logical iteration of democratization of the political process enabled by the Internet.

And sure enough, the Steve Stockman campaign that Backer was the treasurer for wanted to accept BitCoin, FEC approval or no.

Rep. Steve Stockman says he’ll accept Bitcoins to help fund his campaign for the U.S. Senate against Sen. John Cornyn.

One catch: The Federal Election Commissiondeadlocked in November when asked whether political action committees and candidates could accept the virtual currency

Here’s what economist Nouriel Roubini said about BitCoin on Twitter.

Apart from a base 4 criminal activities, Bitcoin is not a currency as it is not a unit of account or a means of payments or store of value

— Nouriel Roubini (@Nouriel) March 9, 2024

Huh.Maybe it’s perfect for politics.

FULL DISCLOSURE: IN OCTOBER, 2013 I ASKED DAN BACKER IF HE KNEW ANYONE WHO COULD HELP FUND MY FILM ON THE PLIGHT OF CHRISTIANS AND OFFERED HIM A FINDER’S FEE.