Bitcoin fans are apparently spouting off lies and falsehoods to anyone who would listen to them. That’s according to Jason Bloomberg, an author at Forbes. In an article titled “Seven Lies Bitcoin Fans Tell Themselves” Jason details seven items that he feels are commonly spread falsehoods. Unfortunately for Mr. Bloomberg, nearly every assertion he makes is demonstrably not true. Let’s go over them with simple and easily provable facts.
Bitcoin Is Not Like Other Forms of Currency
Mr. Bloomberg asserts that bitcoin is nothing like U.S. dollars or gold. While they may have some similarities, he believes that the differences are too great to justify such a comparison.
Let’s consider a few basic points. Can USD be used in exchange to buy things? Yes, of course. Can bitcoin be used in exchange to buy things? Yes, it can. The primary purpose of money is to communicate value. Bitcoin does this expertly and does not require any intermediaries or translations across borders. It cannot be seized, censored, or manipulated by governments.
Is bitcoin exactly like the U.S. dollar? No, it’s better. And that fact doesn’t make it any less of a currency.
Bitcoin Is Not Secure
In Bloomberg’s own words, bitcoin is “appallingly easy to steal”. It also has one vulnerability after another. Bloomberg, however, fails to provide or cite even a single source to support what he is referring to when he says it’s so easy to steal.
It is quite possible that Bloomberg is confusing hacks that have occurred against exchanges, or phishing attempts, with bitcoin being stolen. This is not stealing bitcoin directly off the network. Instead, it is stealing from someone who has not protected themselves adequately or has fallen for a phishing scam. If bitcoin were, in fact, easy to steal, then Satoshi Nakamoto’s wallet that contains billions of dollars worth of BTC would have been emptied years ago.
Andreas Antonopoulos often compares bitcoin to software bug bounties, saying that bitcoin itself is the world’s largest bug bounty. If someone were to successfully, directly hack and steal the coin from the network, such a person would become an overnight billionaire. With so much at stake, why hasn’t this happened yet?
Oh, right, it’s because bitcoin isn’t easy to steal. It’s so far proven to be impossible to steal directly. The only way it has been stolen is from insufficiently protected intermediaries or those who have fallen for a phishing scam.
Bitcoin Isn’t Money
This line of thinking doesn’t even deserve its own point in Bloomberg’s listicle. It is simply rephrasing his first point, that bitcoin cannot compare with U.S. dollars or gold.
Bloomberg claims that bitcoin is more of a speculative vehicle and “exhibits few of the properties of money”. This statement is so ridiculous to anyone who’s used bitcoin in real-life situations that it may seem like it does not even deserve a rebuttal. For the sake of those new to cryptocurrency, let’s briefly go over why this statement is false.
Bitcoin can be used at thousands of businesses across the globe. Buying some bitcoin in Germany and spending it in India requires no foreign currency exchanges, no wire transfer fees, and no foreign exchange fees. Can the same be said for the Euro, the Dollar, or the Yen? No. Bitcoin isn’t “money” in the way Jason Bloomberg thinks of money. That being pieces of paper that are shackled to one country, or the whims of one government or central bank. However, Bitcoin checks all the boxes in meeting the description of what “money” is.
The Classic ‘No Intrinsic Value’ Argument
Scraping the absolute bottom of the Bitcoin naysayers’ handbook, Bloomberg once again dredges up the old meme that Bitcoin has no intrinsic value. This is not the first time he’s made such a claim. He even admits in this article that the last time he made this claim, no one cared.
Even though this argument has been debunked time and time again, allow me to debunk it one more time.
Bitcoin is a pure free market valuation item. It gets is value from what people give it. It is not backed by physical products, it’s not backed by governments or companies. It’s value is purely what those who buy and sell it are willing to give it.
They say gold has intrinsic value, but what is it? It has a few physical properties that make it practical and attractive, and it’s rare. Beyond that, its value is cultural — people have used it as money for thousands of years. And if the worth people bestow on something grants it intrinsic value, then bitcoin has it too.
Sorry Jason, but if you’re going to attack bitcoin, you’ll need to be more creative. You can’t just keep regurgitating the same old nonsense and expect to get more attention or new insights.
Bitcoin Is in a Bubble
You thought the “no intrinsic value” argument was the oldest and most overused anti-bitcoin claim? Well, Bloomberg is about to hit you with a one-two punch of silliness with the ever pointless “bitcoin is in a bubble” argument. His rationale is that bitcoin is only valued by speculation and absolutely nothing else.
I would suggest Mr. Bloomberg that you go to China, Venezuela or Zimbabwe and have a look for yourself — and see if what is powering bitcoin’s valuation is nothing more than rampant speculation by those in the first world. I would also suggest that you have a chat with the people of Greece.
Like any asset, bitcoin prices will fluctuate. Just because they are experiencing growth or dips in value does not absolutely mean that they are in a bubble. You said it yourself, bitcoin is unlike other assets. In this case, I actually agree with you. Bitcoin isn’t like other assets. Its behavior is not absolutely indicative of a bubble.
You Haven’t Made Any Money on the Bitcoin You’re Holding
Let’s say I bought 100 shares of Microsoft stock 10 years ago and I am still holding onto them now. According to Mr. Bloomberg, I have not made any money on it. It is by this logic that he is claiming that those who have made unrealized gains on bitcoin have not truly made any money.
Let’s consider two points. The first one is a bitcoin, unlike shares of stock, can be spent directly without converting to another currency such as dollars. Right now, I can log on to overstock.com and purchase all-new furniture for my house with nothing but bitcoin, and at the current valuation of bitcoin. Can I do the same with shres of stock? Since with bitcoin I have this buying power without needing to sell, on what grounds can you possibly argue that I have not made any money?
Secondly, The cryptocurrency space is growing to include various lending platforms that will allow you to use bitcoin as capital to borrow against. Even if I never sell my BTC, I can still use it as collateral in order to get funding or a loan.
Please, Bitcoin Fans – ‘I’m [Not] Full of Crap’
The last section of Bloomberg’s piece is to essentially declare himself as immune from all criticism. He does this by laying a shield over himself and saying that any attack against his article is a personal attack against him.
There’s no reason to attack you directly, Jason Bloomberg. I respect you as an individual and you have the right to have your opinions. Attacking the validity of your regurgitated “ideas”, however, is fair game. Playing the victim card in advance will not make your claims any more or less valid.
Are bitcoin fans dupes? Do you agree or disagree with Bloomberg’s points? Tell us what you think in the comments.
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