Over the weekend the privately designed and created digital currency/investment vehicle Bitcoin (it was designed as the former, seems to be working more effectively right now as the latter) hit an exchange value of over $500–closing at $528.32–on its most prominent exchange, Mt. Gox. (And as of the minute I write this, it's already up to $640 today.)
You first probably heard of Bitcoin from one of your kooky friends, in the wilder ends of agorist economics (end the Fed, escape the State, black markets rule, you can buy drugs with them anonymously online!) and/or high-tech futurism (new technologies are giving us wider and wilder freedoms from state control than you could ever know).
The value of Bitcoin in dollar terms survived its first supposed bubble back in April (when it topped off at $266 before falling to $65 within a week), and the shutdown of Silk Road, its most prominent use for actually buying goods and services
Despite all that, in the short term at least, believing in the wild future seems like it was a very, very smart idea. There are various scruffy festivals and conferences I attended in 2011 where, if even half the people there were putting any money where their mouths were, the assembled wild-eyed dreamers easily have a market cap exceeding $40 million today.
For some perspective: if you dropped a grand on Bitcoin the first time (I believe) it was mentioned here at Reason, on April 20, 2011, it would have been worth around $4.4 million yesterday.
If you had spent a thousand bucks on Bitcoin on the day Reason.TV first ran a video interview with Jerry Brito about Bitcoin, for those who trust the image more than word, on June 1, 2011, you could have turned that yesterday into $54,465.
If, on the day that Wired magazine confidently declared that Bitcoin was through–"The Rise and Fall of Bitcoin," out on November 23, 2011–you spent a grand on the dead digi-currency, that would have been worth $221,982 yesterday–a lot of gift subs to Wired.
if you bought in the first time we wrote at Reason about Bitcoin's first known appearance in a lawsuit, on August 15, 2012, you could have cashed that out yesterday for $39,873.
If you dropped a grand at the height of the April "bubble," on April 10 this year, right before it all seemed to come crashing down, that would have been worth $1,986 yesterday, nearly doubling your investment.
If you had dropped that grand on May 21, the day my Reason article on government attempts to regulate or stymie Bitcoin appeared, that would amount to $4,292 yesterday.
If you had put a grand of U.S. fiat money into Bitcoin the day before the Silk Road bust–which you might recall led many to think a death blow had been struck to the currency–you could cash out that grand yesterday for $3,657. If you had dropped a grand on Bitcoin a mere month ago, that would be worth $3,139–substantially more than tripling in a month.
(All estimates based on the day's high via this chart for the buy price, and yesterday's close of $528.32 for the sell. And remember, this morning it has soared another 20 percent or so. This morning.)
What any of this means for the future of Bitcoin as either currency or investment vehicle is uncertain, of course as past performances are no result of future guarantees and all that.
And as anyone will tell you, wild fluctuations in value aren't really the best quality for something you want to use as a currency, as opposed to an investment vehicle. But it is worth noting that academics have found that even reports of the occasional hack, scam, and theft of Bitcoin seems to have no effect on its market capitalization or worth, and hacker types are doing their best to make sure Bitcoin can stay largely anonymous, though means such as "dark wallets."
But that lots and lots of people are putting their money into their belief that private, largely anonymous, state-free, black market friendly, digital currency vehicles are the wave of the future at the very least should put a smile on the shade of Sam Konkin, libertarian movement father of agorism and hopefully put a lot of change in the pockets of his fans.