When Newsweek/The Daily Beast's Dan Lyons wrote about Bitcoins back in mid-June, that was a sure sign the digital currency had reached the mainstream. Now many readers -- from 70-year-old retirees to those drawn in by the newsweekly's cover that issue -- who might otherwise never have heard about Bitcoins, were aware of this completely anonymous form of money.
In that brief piece, Lyons lionized Bitcoins. "For the first time, you can buy anything online without giving your credit-card numbers or bank-account information -- leaving no trace at all," he wrote. But maybe the long-time technology reporter was too late to this story. It looks like the age of the Bitcoin could already be nearing its end.
Earlier this year, the price of the Bitcoin climbed to a high of $32. It then fell to about $18, which is where it stood when Lyons wrote his piece. But then it continued to fall. Just this past week, the first of August, the exchange rate dropped from $13.50 to under $7, as the chart embedded above shows. And it looks like it will continue moving in a downward direction.
The problem with Bitcoins is the same thing that people love about Bitcoins: They leave no trace. It takes an incredible amount of computing power to create new Bitcoins with a PC (you can also, of course, just buy them on an exchange, which is what most people using them do). And a complicated algorithm keeps the total supply steady. Once these digital coins are created, they're still just a handful of bits and bytes, a little piece of encrypted code. There is no fundamental value.