Bitcoin explained in plain English

Like Paypal and Visa, Bitcoin is a system that can send money digitally.  The innovation that sets Bitcoin apart is that it isn’t controlled or operated by a single company.  Instead of having a company like Visa run the system, anybody can join the Bitcoin network and participate in the record keeping that keeps Bitcoin running.  Nobody owns the Bitcoin software or the Bitcoin network.  If an oppressive government wants to shut down Bitcoin, it can’t simply go after a single company.  An oppressive government would (in theory) have to go after everybody running Bitcoin server software on their computer to shut it down.

In practice, the decentralization doesn’t actually work.  Most people buy Bitcoins through exchanges run by private companies, which are subject to government-imposed laws and regulations.  While Bitcoin’s innovation is interesting, it doesn’t actually do anything useful in the real world.  However, very few people actually understand Bitcoin.  So, journalists and cryptocurrency fanatics can make up fancy stories about how Bitcoin or other cryptocurrencies will change the world.

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Some ways to short Bitcoin

The price of Bitcoin has fallen significantly from its peak… perhaps foreshadowing a quick collapse.  Perhaps short positions in Bitcoin will work out quickly.  But who knows… short positions may turn out to be extremely dangerous as Bitcoin may skyrocket even more.  Here are some quick notes…

For the image above, the columns are:

  1. Ticker
  2. Green = shortable, dark green = no borrow, red = Interactive Brokers won’t let you short it.
  3. Borrow rate (retail rates).

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