by Robert DeVoe
In a recent article that appeared in the New York Post on January 1, 2018, numerous false statements, fourth equivalencies, and misinformation are cited. The central theme of the article? Bitcoin is “not a currency,“ and anyone getting involved in it should be protected from “their own bad judgement.” There is a lot to unpack here, so read on as we go over some of the more pertinent points made in this opinion piece.
Bitcoin isn’t real
The author begins the piece by attempting to explain what bitcoin is by comparing it to Smurf Berries. These being the in-game currency from a popular mobile game, Smurfs’ Village. The author continues by stating that bitcoin’s aren’t real, they aren’t a currency, and also refers to Litecoin and Ethereum as “fake coins.”
As a rebuttal, we have already seen more than a few occasions of individuals purchasing homes and vehicles as well as many merchants accepting these currencies. The article describes the volatility another major barrier keeping bitcoin from becoming a genuine currency.
By this definition, the Venezuelan Bolivar is not a currency because it’s value fluctuates too much. Albeit the South American country is undergoing severe financial problems, this particular argument is unconvincing.
Lastly, the author claims that bitcoin is not currency because it can’t be used to buy things “without having to explain it.” This last point points merely to cryptocurrencies’ position on the innovation curve.
Fiat Aren’t Stocks
In the next section, the author suggests that you would not hold all of your money in a national currency with the expectation of getting a “15-fold“ increase in a year. While this is true due to Central Banks designing inflationary fiat currencies, individuals still earn profits via arbitrage across fiat exchanges every day.
A more accurate comparison would be comparing bitcoin to something like gold, which has a fixed amount and increases in value over time. Gold is worth more now than it has ever been and this doesn’t make it an unreal asset.
Gold, however, cannot be used to buy goods in a store, whereas some merchants and intermediaries can help local bitcoin transactions.
Bitcoin is a Bubble
Naturally, a negative piece on digital cash wouldn’t be complete without these words. The author asks why governments still allow people to buy bitcoin before concluding that the law is “slow.“
Before unpacking this argument, something concrete should be said about the bubble. Innovators and early adopters of bitcoin are aware of this characteristic, especially having lived through 2010, 2013 and the ensuing bear market. So, the inflated value of bitcoin is nothing new and in fact the digital currency has gone parabolic, before crashing, three times.
Moving to the argument that governments haven’t legislated Bitcoin quick enough, the author fails to realize that the cryptocurrency exists outside of national laws. It is unblockable, censorship-resistant, and transnational. Insofar as Satoshi hoped to create a non-mainstream option to monetary systems, it may, in fact, be working perfectly fine.
The author then goes on to say that bitcoin transactions are already “illegal“ in some cases, according to the SEC. The author refers explicitly to Crypto Co and their supposed misdeeds.
It goes without saying that just because one company does something shady, the entire bitcoin market is not to blame. By the authors logic, you could declare US dollars illegal because they are used in illicit transactions quite often.
Beware of Media Sponsored “Mania”
The author closes by saying that it is “hard for regulators to crack down“ when news outlets “encourage the mania.“ Her main point is that investors should be wary of bitcoin price hikes following the attention of large media outlets.
However, the author again fails to realize that bitcoin has been around for nine years now. During that time, it has appeared in major news outlets, television shows, newspapers, and almost any other media you can think of on a weekly if not daily basis, across the globe.
Instead, it may be more accurate to say that bitcoin is seeing a broader uptick in interest as more people learn what it stands for and what it means for the average person. A legitimate, organic growth does not necessarily constitute a mania. That being said there have been multiple occasions in which media have easily manipulated the price of an altcoin.
Ultimately, there are a handful of valid points that this piece brings up, but it does take delicate attention from the reader. As with anything in this sector, it is incredibly important to do your research.