The great mystery and puzzlement behind Bitcoin may already be fading or disappearing. We recently questioned what the value would be for the price of gold or the price silver, based on speculators and consumers bidding up a virtual currency. Our argument was very simple: in time, a buck is worth a buck. We are not alone in thinking that the draw to Bitcoin is a bit silly. Now we see that Mt. Gox, the world’s largest official Bitcoin exchange, is down yet again.

Our case is not truly a case against the future of digital currency, or even against virtual currencies. We have supported and would continue support anything that allows the most efficient and most cost-effective method of transferring money from consumer to companies and/or consumers to peers. The problem is that the history of Digicash, eCash and other virtual currencies have never been able to stay afloat. Ditto for micropayments, with most of those exchanges having shut down as well.

After trying to go to the Mt. Gox website on Thursday before noon EST, all we saw was a 502 Bad Gateway message on the website. The translation is that its servers are not communicating properly. That website is back, up but we took a snapshot of the image to capture it.

The copy/paste function of the exchange says, “Trade with confidence on the world’s largest Bitcoin exchange! Mt.Gox is the world’s most established Bitcoin exchange. You can quickly and securely trade bitcoins with other people around the world with your local currency!” At 12:03 p.m. EST, we see the following U.S. dollar quotes from Mtgox.com:

• Last price:$94.40000
• High: $95.00000
• Low: $83.00000
• Volume: 175987 BTC
• Weighted Avg: $90.71355

Maybe it will be Amazon.com Inc. (NASDAQ: AMZN), with its own currency, that will win long term. EBay Inc. (NASDAQ: EBAY) has the wildly successful PayPal unit, but its fees can be high. Maybe the answer is merely Square and its competitors for transacting credit card payments right through your smartphone. Regardless of what the effort will be in the future, it seems unlikely to us that Bitcoin will rule the roost in the future.

How can you have a virtual currency trade at a premium or discount to intrinsic values, and then not be able to trade because the systems cannot handle the volume or because servers will not properly communicate? The answer has to be “not very long.” Keep in mind that the real world currency markets are almost 24/7, and they are the most active and most liquid of all world markets. Imagine having a currency that could be worth more or less than its real value but not being able to even trade it.

Bitcoin is losing its luster. If Bitcoin ultimately goes the way it looks today, we don’t want to take credit for assigning the name “BS-coin” to it. Sadly, “BS-coin” will likely be its name.

Here is a Bitcoin price chart from Mtgox.com:

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