Why do you thinkd Brexit and Trump happened? Watt's Up With That?

[Steve R.]

Bitcoin and the other digital currencies (now numbering four total) have started to tank because ...

May be a bit premature the current decline may be temporary. (Update: Bitcoin is down over $1,600 at this time.) But based on the sudden rise of Bitcoin (an indication that it represents a bubble), the current decline may be an indication that the bubble is bursting. Time will tell, as will the agony of those who lost.

(a) the computation required for long-chain blockchain computations is expensive, and therefore so is the electricity for it, so its use can become prohibitively expensive in upkeep costs.

An interesting point. Somehow administrative/operational costs need to be "sucked-out" of each transaction. A surcharge perhaps (similar to a sales tax)?

(b) since it is unbased, it is essentially another "bubble" that was waiting to burst. If it is unbased, it is too easy to debase.

Technically the US currency is "unbased", but we can take solace in the fact that that it is backed by the "faith" of the government. Nevertheless, the US government (the FED), through its economic policies is debasing the US currency through planned inflation. Whether that is good or bad, I'll leave that for another day. But in terms of Bitcoin, should the system ever get hacked; it will be totally debased.

(c) many governments in the far east no longer trust it and therefore are either suspending or formally outlawing trading in virtual currency. They are concerned over its security. The fact that both China and South Korea (politically very different) have taken steps means they have seen a fundamental problem. I'm guessing that they are trying to prevent a shadow economy that they cannot control or track.

I believe that you are pointing out the real reason why Bitcoin and other currencies of its ilk will fail. They won't fail directly because they employ a bad business model, but will be forced out of business by government regulation that will make them illegal in the name of protecting the economy and populace.

Even in the US we are seeing the emergence of virtually every transaction, (being a phone call, stock trade, banking transaction, airline reservation) being tracked by the government. This oppressive trend continues to plod-on and become evermore onerous. Innovations such a Bitcoin, will be perceived as ways to circumvent government control, which to the government is an evil no-no.

If I recall correctly, the US many years ago forced Swiss banks to open their (formerly) private financial records to US investigators. Up until then, the Swiss banks were noted for keeping their clients financial transactions secret.

As an aside on this issue. My daughter and a friend were going to take a trip that required the purchase of an airline ticket. Prior to the trip, my daughters friend had to cancel because of a family issue. Of course the airline would not refund the money. I offered to take the friends paid for seat, but the airline claimed that I could not fly in her place due to "government mandated security reasons". Clearly a bunch of BS as there was nothing stopping me from buying a new ticket for the same flight, which I grudgingly did to be with my daughter.