Let's talk about how the media portrays cryptocurrencies. The example of North Korea coverage is particularly instructive.

A look at recent headlines about Bitcoin and North Korea

This week's coverage by CNN is a pretty good example: "North Korea may be making a fortune from Bitcoin mania".

The hysterical tone is repeated by Bloomberg, saying "Bitcoin is the perfect mechanism for North Korean money."

CNBC thinks you should know that you're supporting North Korea with every trade in Bitcoin.

What's the basis for these claims?

CIA-linked researchers claim to have found evidence of one iPad in North Korea being used to make a few payments. In addition, "hundreds" of bitcoin nodes came online around the time the WannaCry ransomware attack happened.

Wow, hundreds of nodes––that sounds impressive, doesn't it?

Let's run the numbers and find out.

For the sake of looking at a "worst case scenario," let's assume all these nodes are mining with modern equipment acquired at competitive prices. (If you know anything about communist economies, you know these assumptions are generous to the point of absurdity.)

• Three hundred nodes
• 14 TH/s AntMiner S9†
• Equipment cost per node: $7,773
• Cost per kW hour electricity: $0.12††
• Gross profit per node: $7,325
• Net profit per node: (-$448)

Total annual net profit: (-$134,400)

So North Korea likely lost money on Bitcoin before appreciation!

And even when you account for the amazing appreciation of Bitcoin’s value since May 2017 through the end of this year, all that Bitcoin is still worth less than $2 million even if they kept it all. Remember, this is a country with a GDP of $12.8 billion. Even in a worst case scenario, that money is a drop in the ocean.

But what about all the Bitcoin North Korea is making from ransomware?

When it comes to state-funded ransomware hacks enabled by Bitcoin, no one knows how much North Korea earned, but the WannaCry attack cited by this research appears to have netted less than $100,000 globally.

Again, that’s hardly a “fortune” for any state actor, even a broke one.

And remember, Bitcoin is a $250 billion market now. Claims that a quarter-trillion market should be defined by how such a vanishingly small amount of it is acquired is laughable.

In summary, this is the flimsy type of stuff the media uses all the time to frame cryptocurrency for the public as shady and dangerous.

Don’t buy it.

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† I'm no mining equipment expert, so please feel free to offer more plausible options.

†† Yes, I know that the DPRK subsidizes electricity delivery to appear absurdly cheap, but that's not the actual cost to the state. I assume their aging power grids probably can't produce electricity any cheaper than in the U.S., but it's likely much more expensive.