Bitcoin

The revenge tragedy at the London Stock Exchange whose plot I outlined last month has reached its third act, but the carnage may not be over. Chief executive Xavier Rolet has left the building, rather than staying one more year as the LSE first announced, and declared that he won’t come back under any circumstances. Despite whispers that ‘aspects of his operating style’ sparked this row in the first place, Rolet is due a £13 million golden farewell — which the Daily Mail called ‘obscene’ but his fans see as fair reward for all the value he has delivered. Chief among those fans is LSE shareholder and hedge-fund princeling Sir Chris Hohn, who agitated for Rolet to stay and LSE chairman Donald Brydon to go.

Every time I write about Bitcoin you can probably take it as a major sell signal. The last time I did so was in January 2014, at which point Bitcoin was trading around the $935 mark. Had you been inspired by my golden words and invested immediately in BTC (as we aficionados call it), here’s what would have happened: within a few months their value would have more than halved. ‘Bloody hell!’ you might have said. ‘This is an idiot’s game. Clearly there is no future in this stupid crypto-currency malarkey.’ But investment’s all about timing, isn’t it? Had you hung on a bit, watched it drift to its 2015 lows of around $216 dollars and at that point splurged your pension savings on, say, 200, you would now be a millionaire.

Another week, another blue-chip in the dock. The US Securities and Exchange Commission has brought fraud charges against London-based mining giant Rio Tinto and two former executives in relation to an ill-starred coal venture in Mozambique. Whatever its legalities, this was a colossal corporate cock-up. In 2010, Rio paid $3.7 billion for Riversdale, an Australian company that controlled large coal deposits in the Tete region of Mozambique. The plan was to send coal by barge 400 miles down the Zambezi river to the coast, for shipping to Chinese power stations. But the coal reserves proved disappointing, while the Mozambique government refused to permit the barge operation and a rail link proved too expensive.

The FTSE 100 ended the year strong, at 7142, and reopened even stronger. For 2016 overall the index gained 14 per cent, with multinational mining giants as top performers, while the pound lost 16.5 per cent against the dollar — those facts being closely related, since they mean London blue-chips are still cheaper in dollars than they were 12 months ago. Current optimism rests on the idea of a Trump spending spree on US infrastructure, but such is the perversity of markets that if common City wisdom decides that Brexit will actually boost the UK economy, stocks may fall as the pound resurges and foreign investors take profits.

I’ve been looking at my predictions for 2016 made this time last year. It’s extraordinary — don’t check, just trust me — all 12 of them came true. If you had placed a £1 accumulator bet on my forecasts that Britain would vote Brexit, Trump would be elected US President, and that Scarlett Moffatt off Gogglebox would win I’m a Celebrity… Get Me Out of Here, you wouldn’t need to read The Spectator any more — just the Forbes Rich List, where you’d come just between Warren Buffett and Carlos Slim. 1. 2017 will be one long vampire scream from the liberal elite.

I confess to being an out-and-out Luddite when it comes to bitcoin and other so-called crypto-currencies. To the extent that I think about them at all, I think that they are an ephemeral by-product of those creepy ‘virtual worlds’ in which obsessed gamers eventually go mad; that only such lost souls could seriously believe unregulated online money might eventually supplant the state-backed real thing; and that fashionable belief in them can only lead to fraud and loss. In short, I concluded some time ago, they are probably the work of Satan.

What follows is a proposal for reducing the BBC licence fee and improving the corporation’s output while saving the British newspaper industry. All that’s involved is a basic understanding of pricing psychology combined with a digital currency for micropayments. Under my proposals, half the licence fee would fund the BBC’s Reithian purpose; the other £60 could be paid direct to the BBC as now or, if you chose, paid to you as a digital currency (6,000 Beebcoins). People could buy additional Beebcoins, which could be spent on BBC or competitor content — including content from newspapers. Notionally the BBC would lose out; in practice they would gain revenue, as they could now sell premium services.

Heathrow. The whole British story is there. Reading up around that debacle last week, I came across the eye-watering — and I think true — claim that, over the course of the second world war, Britain built 444 airfields. Four hundred and forty four. Although not all in the United Kingdom, probably. Some will have been in far-off lands, where Johnny Foreigner could be bought off in exchange for a pretty goat, or just shouted at, at gunpoint, until he went away. Hundreds, though, will have been here, on British soil — where it has now taken us over half an actual century to not quite build a new runway at Heathrow. 444. This is what we use to be able to do. So also trains.

These online crypto-currencies have made the financial world more fun. It’s all so gloriously bonkers. First there was Bitcoin, the ‘peer-to-peer’ online payment system founded in 2009. Almost nobody understood how it worked or what a Bitcoin actually was — something to do with chains of code, computer ‘mining’, and a ledger system — but that didn’t stop anti-government types everywhere embracing the idea. A decentralised currency that politicians and bankers cannot manipulate and spoil — what’s not to like? Following Bitcoin, all sorts of junior crypto-currencies have popped up, mushroom-like, across the web.

Here’s a thought to kindle a lovely warm glow of smugness and schadenfreude as we enter a new year: you didn’t lose your fortune in the great bitcoin bubble of 2013. The reason I know you didn’t is because few Speccie-reading types of my acquaintance even understand what a bitcoin is, let alone how you might go about buying one, or why it might be important for the future of everything. So let me try to explain from the perspective of a fellow Luddite and techno-phobe. You think about bitcoin, if at all, as one of those newfangled things that young people and child pornographers and hackers and other unsavoury types indulge in.

Bitcoins have been in the news, after a story about an unfortunate fellow who jettisoned his computer’s hard drive that contained (apparently) the code he needed to access his stash of this electronic currency — its value more than £4 million. I don’t even pretend to have an opinion on bitcoins. I only just, and most imperfectly, understand what this electronically traded currency is and why it appeals to people. But it has got me thinking. A bitcoin is a single currency, a global currency, a currency beyond the reach or control of national governments around the world. In theory (unless governments try to ban the bitcoin) it would be politician-proof.