When the state recently announced plans to launch the first-ever municipal bond backed by Bitcoin, the news exposed a big hole in my knowledge base. Bitcoin wasn’t the problem, it was the bond part that baffled me.

I know about chemical bonds, town meeting bonds to buy fire trucks and James Bond, but none of those seemed to fit. So, I went hat-in-hand to James Key-Wallace, executive director of the Business Finance Authority, seeking wisdom.

My problem, he said, is that “municipal bond” can mean different things. The municipal bonds voted on at annual meetings are basically loans taken out by towns or school systems that must be paid back by taxpayers over time, with some special rules because a public entity is involved. No place for Bitcoin.

This latest proposal, however, is for a different type of municipal bond, called a conduit bond, he explained. That’s “conduit” as in “passageway.”

Under the plan, which still needs approval by the executive council and governor, the Business Finance Authority would act as an asset manager for what is basically a loan between a private company and a private lending agency, such as a bank or one of those confusing capital market thingies. The BFA, a self-supported agency (i.e., no taxpayer funding), would be a passageway for the transaction, taking a fee for ensuring that everything is aboveboard.

Conduit bonds are an old hat. What’s unique in the proposal is that the company borrowing the money, up to $100 million for a one-time transaction, can use Bitcoin as its collateral rather than cash or stocks or real estate, meaning the lender could seize the Bitcoin if the borrower doesn’t pay back the loan.

Decades of practice have made us comfortable with collateralized loans but many of those rules and practices don’t apply well to digital assets like Bitcoin. The point of this proposal, created by a company called Wave Digital Assets and shaped by the Business Finance Authority, is to put Bitcoin bonds into practice so people can get used to them.

That way, companies with lots of Bitcoin can get access to capital markets (in other words, make use of other people’s money) without having to sell the Bitcoin, just as companies with stocks can get access without necessarily selling their stocks.

“Wave’s goal is to build a bridge between the digital-asset ecosystem and the traditional debt markets,” is the way the BFA put it in a press release.

Notably, the proposal includes certain provisions that automatically kick in if the price of Bitcoin should fall so far that the loan is in danger of not being covered. That is important because Bitcoin’s value is erratic: It shot up by 60% after President Trump was re-elected and has fallen 19% in the past month. It could go either way tomorrow.

For us ordinary folks, the key point of the proposed Bitcoin bond, as Key-Wallace emphasized, is that taxpayers are not at financial risk. “This is not New Hampshire buying Bitcoin or lending money based on Bitcoin!”

We’re just a conduit for a Bitcoin-based loan.

Good thing, too, because, as I’ve previously written, Bitcoin is a pointless waste of resources the main value of which is letting people evade financial regulation, hence its popularity with scammers, ripoff artists and blackmailers. It is based on very clever technology but a decade of use has shown it has no viable role in modern economies which can’t be done better by traditional finance. The less our tax dollars are tainted by cryptocurrencies, the better.

Obviously that opinion is not shared by everybody, including a number of New Hampshire legislators who are gung-ho about making the Granite State a cryptocurrency leader. They’ve created a “strategic Bitcoin reserve” for the state to invest up to 5% of certain public finances in cryptocurrencies, and they tried but failed to make it impossible for towns to outlaw bitcoin mining, which involves doing enormous amounts of pointless calculations in hopes of getting lucky and winning a piece of a bitcoin.

Gov. Kelly Ayotte is among the crypto fans. She called the proposed Bitcoin bond “an innovative way to bring more investment opportunities to our state and position us as a leader in digital finance without risking state funds or taxpayer dollars.”

Innovative? Definitely. More investment opportunities? Probably. Drawing attention by being a “leader in digital finance” which might draw some businesses to the state? Absolutely.

Good idea? Not so much.

Crypto strikes me as the financial world’s version of the inaccurate writing and art generated by artificial intelligence technologies which is often known as A.I. slop. It seems like the real thing but the more you examine it, the less useful it is, and there’s a real risk its proliferation will undermine the whole edifice.

Crypto, in other words, is finance slop. We shouldn’t be so eager to embrace it.