Two Bits, Four Bits
by Trey Nosrac
My sister, the cheerleader, used to leap around the house chanting, “Two bits, four bits, six bits a dollar, all for Mustangs, stand up and holler.”
Like many things, this confused me.
Holler what, and even more perplexing, how much were these bits?
It was not until the invention of Google that the bit cloud cleared.
In the United States, the bit is equal to one-eighth of a dollar or 12 1⁄2 cents. In the U.S., the “bit” as a designation for money dates from the colonial period, when the most common unit of currency used was the Spanish dollar, also known as “piece of eight” which was worth eight Spanish silver reales.
What does this have to do with harness racing? Maybe nothing. Maybe everything, certainly a little…bit.
Value is a slippery slope. What is a Muscle Hill breeding worth? What is a Beachtrea breeding worth? What is HIP #201 at the Lexington Select Sale worth? What are value bets? What are good odds on a horse race? What is the value of a broodmare? What is the value of a horse listed for sale ongait?
Value comes from what people believe, or what they believe others believe. You cannot eat, feel, or use a Muscle Hill breeding as a blanket. However, a Muscle Hill breeding has value because people believe it has value, and so it does. Currency, stocks, bars of gold, baseball cards and Treasury bonds are all consensual delusions.
This brings us to cryptocurrency and our little sport. Cryptocurrency may be an insignificant blip like my ill-fated investment in the Professional Frisbee Golf League. Then again, it may be as significant as Apple and the smartphone, both of which I did not invest in because they sounded far-fetched.
Time will tell if cryptocurrency is a Ponzi scheme to con poor dolts or if it is the wave of the future where blockchain encryption is a potentially transformative technology as some well-known venture capitalists have predicted.
The lifeblood of harness horse racing is gambled money that skims off a portion to run the business. The rules for collecting the money may vary, but without gambling money, harness racing is Frisbee golf.
The wagered money must be traceable — and it is. When I attempted to gamble in another country, I was blocked. A friend tried to open an account to gamble on a harness race in a non-gambling state without success. Should Trey one day pick a huge trifecta that pays thousands, they will track me down and make me pay taxes. Entities can follow the money in our current currency situation. This gives control.
Everybody from Jeff Bezos to Bozo the Clown can see that encrypted, untraceable currency would be a completely new world, a world with winners and losers. Horse racing does not want to be a loser.
Cryptocurrency seems confusing and mindboggling, just like the idea of seeing a movie or watching and wagering on a harness horse race from a wireless phone was mindboggling a few years ago. This new type of money may or may not be a bubble, but we do not want it to blow up in our faces.
Trey had a cryptocurrency problem on a less grandiose scale that required immediate attention. On my table was (A) buying a trotting yearling colt that will sell at Harrisburg (HIP # 312 – Major Irresponsibility) or (B) buying a bitcoin.
At this moment, one Bitcoin is worth $19,000. Purchase, staking and training of Major Irresponsibility will cost me approximately the same as one Bitcoin. Which is the best bet? Where do I place my disposable assets?
I took this problem to my financial advisor, a thirtyish fellow who is a regular patron of the Happy Daze Bar and Grill. We refer to him as Bart the Suit. The Suit works in a bank. He always wears has his short black hair neatly parted, enters with a briefcase, loosens his tie, pays his tab and enjoys professional hockey. He is soft-spoken and friendly.
The Suit listened to my agonizing dilemma — purchase of a yearling or a Bitcoin.
The Suit thought deeply, closed his eyes and answered softly, “Ethereum.”
I thought he said “delirium” or was speaking in tongues, so I leaned forward.
After a dramatic pause, the Suit popped open his eyes and explained, “Ethereum is the next Bitcoin in currency.”
This would have been more helpful if I knew what the first Bitcoin was.
The Suit finished his fiscal advice, “I know people who bought Ethereum recently and made a lot of money, a whole lot of money, like move to tropical island money.”
So now, Major Irresponsibility was in competition with Bitcoin AND Ethereum. Word spread to the gang at Happy Daze. Soon the game was afoot. Sides divided into pro and con Bitcoin camps. It was like listening to a poorly dressed CNN panel. Not a single member of the Happy Daze crowd owned a bitcoin. Most had few coins of any category, but this did not prevent them from arguing like demons. The high finance debate raged until the wee hours. A very entertaining evening was had by all.
In the end, Trey stayed true and bought the trotter.
In a year, we will learn how it all turns out. On January 1, 2019, we will run the numbers and learn if Major Irresponsibility was the correct portfolio.