The Bitcoin Detractor Starter Kit
Anyone who is passionate about bitcoin has undoubtedly at some point attempted to proselytize it’s virtues to a boomer/ no-coiner. Over the past few years I have come across a litany of different arguments against bitcoin and why it is destined for a spectacular demise. I have decided to compile a list of my favorite anti-bitcoin arguments and rebut them with (my fully biased opinion).
Let’s begin with the most common arguments I am confronted with:
“Bitcoin is too volatile”: This reservation comes up most often and is a result of people viewing bitcoin through the lens of traditional investments. This is a frustrating logical fallacy that is perpetuated by many economists and “thought leaders” of our time. Bitcoin cannot be compared to preexisting assets because it is a paradigm shift in the way we understand value and money. Volatility goes hand in hand with revolutionary technology. With a new concept of value that has so much potential, it is no surprise the free market has a difficult time attaching a dollar amount to it. Similarly, with volatility comes risk, and without risk there is no opportunity. In the case with bitcoin, the opportunity is potentially so huge that the volatility matches that risk profile.
TLDR Version: Bitcoin is a paradigm shift in the way humans can store and transact value. Without the traditional fundamentals used to value stocks, bonds and real estate, the market has a difficult time pricing such a revolutionary asset, thus high volatility is a by-product
“Bitcoin is only used by criminals”: This one is a boomer go-to. The simple answer is yes, bitcoin is used by criminals. With that being said, The US Dollar facilitates crime in orders of magnitude over bitcoin. Not to mention, when transacting with cash, USD leaves no paper trail making is a much more appealing unit to conduct illicit transaction with. With BTC you are leaving a massive immutable, digital paper trail that is locked in time and globally public. In all actuality, bitcoin may be the worst instrument for facilitating crime in the history of monetary instruments.
TLDR Version: Bitcoin is used by some criminals that likely don’t understand the digital footprint they are leaving behind them. The US Dollar is a paramount currency for criminal transaction and will likely maintain that title for the foreseeable future. (Until the fed implements FED Coin)
“I heard it got hacked the other day”: Unfortunately, this is one I hear far too often. This is likely a result of skimming through click bait news headlines and drawing conclusions exclusively from that. To date, the Bitcoin has never been hacked. Since inception it has been fully functionally for nearly 99.98% of the time. What has been hacked are centralized exchanges, individuals who are not protective of their private keys, and online wallets with poor security protocols. With our current computing powers it is technologically inconceivable to hack the Bitcoin block chain and or crack a private key. I will concede that this is with our “current” capacity and that breakthroughs in quantum computing do propose legitimate threats to the security of Bitcoin. But that’s a long ways down the line.
TLDR Version: No, Bitcoin has not been hacked. You are conflating that with centralized exchanges enduring security breaches and individuals mishandling their private keys (Or lack there of).
“Bitcoin is too-complicated”: This is a less common one and the response is not cut and dry. Unfortunately, you hear many people concede: “OK, maybe all of these things are true but it’s still too complicated therefore no one will ever use it”.
In it’s current capacity Bitcoin is complicated. Sending transactions requires handling a daunting string of numbers and letters to be shared with an anonymous recipient and if you are so much as 1 digit off, your transaction is lost forever. Storing bitcoin in a sovereign way requires you to maintain your private keys and lock them away sort of like stashing cash or gold. These are all legitimate concerns although they are slowly but surely being solved. Many of the smartest programmers, engineers and venture capitalists are now actively investing their time and money into this crazy space in order to solve some of these fundamentals issues that separate bitcoin from the fringes into potentially being adopted on a global scale. If you think the Bitcoin user experience will never improve do yourself a favor and watch some of these videos discussing the early internet:
TLDR Version: Bitcoin is the first digitally sovereign monetary instrument and this brings risks and certain complications. There is friction in the user experience of bitcoin, although this is akin to the difficulties people had interacting with the internet it it’s earliest stages. Imagine thinking in 1995 the internet was not going to be valuable because it was too difficult to use.
Cue the infamous quote by Economist Paul Krugman (1998): “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
There are a plethora of arguments produced from the world of bitcoin detractors. These are just a few of my favorite and most common. That being said, not all arguments against bitcoin are bad. Many actually carry legitimate merit. The common theme I have noticed in those who are against bitcoin is that they are arguing against something they don’t understand/don’t care to understand. Most of these talking points are regurgitated from news sources who have proven they view bitcoin as a real existential threat to the status quo. All of this further enforces my belief that bitcoin is a viable player in an increasingly digital world that is enthralled by economic and political uncertainty.
Disclaimer: This is not investment advice.
Special thanks to my Boomer dad who provided me plenty of inspiration for this article.
Follow me on Twitter @Crypto_Select