Mar 18
Bitcoin Is NOT A Scam
Seriously.
Over the last 14 years, Bitcoin has gone from nothing to spawning an entire cryptocurrency market that’s worth billions of dollars. With that sort of swift rise you are going to get a lot of people who really love the technology, but also a lot of people who really hate it.
Strong opinions are to be expected with this sort of thing. Some of the people who love or hate Bitcoin don’t even really have decent reasons why, they just kind of picked a side. However, there are people out there with a good understanding of Bitcoin on both sides.
However, what seems to happen is the most knowledgeable people on the subject don’t get the most attention. This is due to various reasons. A lot of times the people who are knowledgeable aren’t necessarily focused on educating others. Even if they are their videos, books, or podcasts might just not be what the wider audience wants to watch.
Someone who loves Bitcoin would prefer to watch a video that is focused on how one Bitcoin will be worth a million dollars, rather than a video that breaks down the intricacies of how Bitcoin functions.
A Bitcoin hater would prefer to watch something that reinforces their belief that Bitcoin is bad rather than a more educational video that maybe explains Bitcoin on a technical level.
If you are someone who takes the time to watch the super educational deep dive videos, awesome, but that just isn’t what the average person is doing.
This kind of behavior then leads to terrible ideas being perpetuated in each community. People in the crypto space start thinking that an obvious scam coin is “THE NEXT BITCOIN”. Only to lose their entire investment a week later.
In Anti-Bitcoin communities you see the idea that Bitcoin is just a scam and anyone who is a fan of it is either an idiot or a grifter. Which is just not true.
It isn’t wrong to say that the crypto space as a whole is full of idiots and grifters because it is, just like a lot of spaces. The crypto space attracts a lot of people who want to get rich quick. It’s unregulated so many people create scam cryptocurrencies and NFTs, sell them, then run off with the money. But that is only part of the story. There are tons of people that genuinely love what Bitcoin is doing for the world and want to see it succeed.
The fact that these scams happen and that many people get into Bitcoin just to get rich quick really doesn’t affect the integrity of Bitcoin. In fact, Bitcoin was such a revolutionary idea that it attracted enough people to spawn these sorts of problems.
Bitcoin was initially created as a response to the current monetary system. Satoshi Nakamoto, the anonymous creator of Bitcoin, wanted a decentralized currency that couldn’t be controlled by some central entity. Satoshi felt that the current financial system was a scam and that maybe he had a way to fix it.
Just a few months after Bitcoin was launched, Satoshi wrote,
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
Satoshi worked on Bitcoin for quite a while before it was launched. He also worked on it with the community for several years before finally leaving the project altogether.
Shortly after Satoshi left Bitcoin, Mike Hearn (an early Bitcoin Developer) wrote satoshi asking if he would ever rejoin the project.
Satoshi responded by saying,
“I’ve moved on to other things. It’s in good hands with Gavin and everyone.”
So the person behind Bitcoin had good intentions for it and worked hard to make sure that it would succeed. Then when he felt that he had done all that he could for Bitcoin, it was handed off to the community who could continue working on it.
Some may say that Satoshi and this community were just focused on getting rich from Bitcoin and that’s why they wanted to work on it, but that wasn’t really any of their goals. The early Bitcoin supporters were ideologically driven.
Bitcoin was a niche project that not many saw the potential of. Even those working on it gave it a very small chance of succeeding. Today it’s a massive asset that people all over the world own, but in the beginning, it was just a small project that a few people were passionate about.
Satoshi Nakamoto clearly didn’t seek fame or fortune from his creation. We don’t know who Satoshi was and he has been completely silent since he left the project.
Satoshi is also suspected to have accumulated up to a million Bitcoins, but after well over a decade he still hasn’t sold any of them. Meaning he probably never will. It’s likely that those Bitcoins were just a by-product of him being one of the first consistent Bitcoin miners. Today his fortune would make him one of the richest people in the world, but his dedication to the success of the Bitcoin Network has likely been the reason that they have never moved.
Maybe the early community behind Bitcoin had good intentions and worked hard to make Bitcoin something special, but as time has gone on things have gotten a little crazy and now Bitcoin is a shell of its former self.
After all, most Bitcoin transactions are based on speculation not purchasing goods or services. Bitcoin’s price is also very volatile which isn’t great for a currency.
Right?
These arguments get thrown around a lot when Bitcoin is accused of being a scam. And it makes sense as to why. The intentions of early Bitcoin adopters were clear, but now many just see it as a way to get wealthy.
Many traders make a full-time income trading Bitcoin and other cryptocurrencies. They often don’t really know or care about the fundamentals of Bitcoin.
Some of this can be explained by growing pains. The more money that flows into something the more it is going to be worth. Compared to more traditional assets Bitcoin is very small. So when it gets a large amount of attention its price can move a lot. This has spawned many speculators who want to make a quick buck.
However, as time has gone on Bitcoin has gotten less and less volatile because the amount of money going into it has gotten larger and larger. In the early 2010s, you could make a lot of money by just investing a few hundred dollars into Bitcoin. But today you just aren’t going to get those same kinds of returns. Moving the price just isn’t as easy. As Bitcoin matures it is likely going to become more stable making it a more viable currency.
There are many claims that those promoting Bitcoin now just want to make their own net worths larger. They already have large sums of money in Bitcoin so getting others invested is just going to help them become wealthier.
While this may be true for a very select few people, most malicious investors in the crypto space are not using Bitcoin. They are using smaller cryptocurrencies that can be more easily manipulated in price. Many are even just creating their own Crypto or NFT projects.
There is also a common claim that Bitcoin increasing in value at all is a problem for it as a currency.
The issue with this argument is that it is entirely missing the point of Bitcoin. It was created to increase in value.
Fiat currencies like the US Dollar lose value over time. The federal reserve intentionally tries to keep inflation at 2%. This causes those who hold their dollars for a long period of time to actually lose wealth. The goal is to encourage individuals to spend their dollars rather than hoard them.
Conversely, Bitcoin is meant to be a way to preserve your wealth. It was designed with a limited quantity so that it could be a currency that benefits those who hold it. Satoshi Nakamoto was not satisfied with the money printing that many countries were doing during the great recession. This money printing benefited those at the top while hurting those who were most vulnerable.
Having a government in control of the money supply allows them to debase it as much as they please. This is exactly what Satoshi Nakamoto wanted to prevent. Yes, Bitcoin can be used to buy goods and services, but since it can’t be debased it is also perfect for storing wealth. Something that is not true of fiat currencies.
Bitcoin is still in its infancy. It has only been around for 14 years. There are tons of unknowns about its future. We don’t know how governments will decide to regulate it, who will decide to use it, and how they will decide to use it. As time goes on these things will become more apparent, but for now we are left to wait and see how everything pans out.
