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The Irish Reason Why Bitcoin Won’t Become The Global Currency

There’s a certain relish about the way this story is portrayed – for, of course, it had to happen in Ireland. Yes, obviously, it’s unfair, colonialist even, but there is a certain underlying assumption about Oirishness in the English psyche:

In early 2017 Clifton Collins, an Irish drug dealer, had a dilemma: where to hide the codes of his illicit €55m (£46m) bitcoin fortune.

His solution was to print them on to an A4 piece of paper and stash it in the aluminium cap of a fishing rod case kept at his rented home in Farnaught, Cornamona, County Galway. It seemed a good idea at the time.

Then three things happened. Police arrested Collins after finding €2,000 worth of cannabis in his car. He was sentenced to five years in jail. The landlord of the Galway house had it cleared out, resulting in Collins’ possessions being taken to a dump.

The codes are now missing, meaning the accounts cannot be accessed.

According to the Irish Times, which first reported the story, workers at the dump told the Irish police force, the gardaí, they remembered seeing discarded fishing gear. Waste from the dump goes to Germany and China to be incinerated. The fishing rod case has never been found.

To complete the joy of the story the courts have decided that he must give up that bitcoin fortune, derived as it is from drug dealing. It being, of course difficult to give up what cannot be found.

But once we step off that platform of the most horrible cultural sneer here is why bitcoin just never is going to become the global currency. It’s too easy to lose it permanently. That is, it is inherently deflationary. Each and every year, day perhaps, some more of it is lost on a blown hard drive, a password mislaid, meaning that the volume of the money supply decreases.

Yes, I know, it is gradually expanding with blocs being created but there is that hard limit to eventual issuance. And that some portion gets irretrievably lost reduces the size of that total issuance. And this will continue forever – as long as human stupidity exists at least, something we’ve never been in short supply of.

Eventually, that is, the supply of bitcoins will be asymptotically approaching zero – and if we measure it against GDP, rather faster than eventually – and that’s just not an attribute of something useful as a currency. Therefore it won’t be used as that global currency.

Sure, a lot of fun can be had between now and then but it just ain’t gonna work in the long term.

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4 years ago

All he had to do was lie about where a piece of paper was, and the cops give up on searching for his stash?

I’m not sure he’s as Oirish as we might imagine.

Quentin Vole
Quentin Vole
4 years ago

It costs almost nothing for data space in the cloud (1 TB comes ‘free’ with a MS Office sub), so there’s no excuse for not keeping a few copies with different providers. Double encrypt it, if you’re paranoid.

4 years ago

Can it be as hard for a computer programme to duplicate a set of codes as it is to generate a bitcoin in the first place?
Secondly how stupid is Collins supposed to be? He could have sent a lackey to recover umpteen items from his house during the trial (if he wasn’t on bail and able to do so himself) so the lackey would not have realised that the fishing gear was anything other than fishing gear.

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