The digital currency's wild fluctuations in value have skeptics saying "I told you so"

Bitcoin has been on a wild ride this week. The once-underground digital currency peaked in value at $266 per virtual coin, and then plunged to $105, causing one of the biggest Bitcoin exchanges, Mt.Gox, to temporarily halt trading.

The fact that prices eventually leveled out is proof to some that Bitcoin is a resilient, feasible form of currency. To others, like Slate's Eric Posner, however, the last week shows that it's nothing more than a libertarian fantasy. (Confused? Check out our Bitcoin explainer here.)

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Bitcoin appeals to tech-savvy libertarians, Posner argues, because of its anonymity and lack of oversight:

Fundamentally,Bitcoinunites futuristic left-wing internet anarchism the fantasy that the web can provide the conditions for agovernmentlesssociety with the cave-dwelling right-wing libertarianism ofgoldbugswho think a stable money supply can be established without government involvement. It is proof for both that government is not needed for much, or at all. [Slate]

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Libertarians wouldn't necessarily disagree. (You can, in fact, currentlymakedonations to the Libertarian Party in Bitcoins.)In Libertarian News, Michael Suede defends the recent fluctuations:

There were some banking panics that took place prior to 1933 (much like the Bitcoin exchange panics we see today), but the only times America experienced a major depression under the gold standard were the periods when the central bank monkeyed with the money supply (something that wouldnt be possible under a 100 percent reserve privately run gold standard). [Libertarian News]

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Read the rest here:

Is Bitcoin just a libertarian fantasy?