So, BitCoins? Where shall I start? Okay how about this. BitCoins are a scam, it is made up shit that an awful lot of people are buying into. This is a classic con game and I am pretty surprised no one has really figured it out yet. This is called “Pump and Dump”, it is a very easy con to pull off on stupid people. How this scam was done in the past is our ConMan would invest money in low priced stock. He would then pump up the price of the stock by pointing to his own large purchase as proof that something is happening there. He would also get stock brokers via payola schemes and kick backs to sell the stocks to unsuspecting buyers and finally, through Internet sock puppetry, get some excitement going about the stock. Our ConMan would then dump his stock at or close to its peak, doubling or even tripling his money practically over night. This worked beautifully during the day trader days of the late 1990′s. This con really does not work anymore in the stock market. So what do we do, we come up with a variation on a theme, and BitCoin was born.
My guess is the guy who came up with this scheme has hundreds of thousands of BitCoins hidden away. Seriously, he wrote the software and designed the algorithms, what was stopping him from creating his own BitCoins out of thin air, all he has to do is write a program to create the digital hash we call a BitCoin and place them in his wallet. It is possible he can create them at will. Now that BitCoins are worth $1000, he can slowly start dumping the things at his leisure and make millions dollars at the expense of all the late comers. Sure a few people will make money, but when it is all over, there will be more BitCoins than people who want them, they will be worth nothing and just like the Dot Com Bomb, a few people will be very rich and a whole lot of other people will be broke.
Update: Satoshi Nakamoto, the creator of Bitcoin reputability has over 1 million Bitcoins.