Don’t Listen to the Mainstream Media on Bitcoin, Blockchain, or… Anything Really
Bitcoin is a spanking-new, highly-specialized topic and even those deeply involved don’t agree on many points. So why trust a reporter who’s only given it an hour’s thought, max?
My well-meaning, non-tech friends know I’m interested in bitcoin — since I’ve written about it every day since mid-2013 and bewilder them with it on Facebook.
So they often send me links to bitcoin articles, usually from the mainstream media. In a way it’s a fresh perspective, since bitcoiners spend most of their days buried in chat rooms and Reddit, and forget the outside world.
I said fresh — but not particularly edifying. Quite the opposite, in fact. After the excitement of the immediate at bitcoin’s edges, it’s a bit depressing to see where the outside world is stuck.
One example that stands for many
The latest is this one, from John Naughton at The Guardian. Reading The Guardian for finance and economic commentary is like reading Hustler for the literary reviews, but some people do.
The first thing you see is a big photo of Estonian Prime Minister, Taavi Rõivas — and a caption saying his government is experimenting with ‘blockchain technology’.
Here’s the first red flag. As a proud (and upstanding) e-Resident of Estonia I’ve heard this a few times already. The link is tenuous at best — the laudable Estonian e-Residency program has a few links to the hypothetical BitNation project, but that’s it. As to what the blockchain experiment actually entails, the article doesn’t mention it. There’s more information in the sentence before this one.
Then we get to bitcoin, with this line:
“… in so far as Joe Public thinks about distributed ledgers at all, it is in the context of Bitcoin, money laundering and online drug dealing.”
I know the mainstream media’s modus operandi on unfamiliar topics is to single out a few tropes and flog them till they’re red and raw, but really? — this trope was old in 2013. That age of bitcoin yore when the price had just hit a massive high of $275 and the Dread Pirate Roberts still menaced the world on his good ship Silk Road, confounding equally swashbuckling DEA and Secret Service agents at every turn.
Do people buy drugs with bitcoin and other cryptocurrencies? Yep! That’s because it is money. People use digital money to buy goods just like they use paper cash. Paper cash, for the record, is still the most common way to buy such party goods.
Those hungry to link bitcoin with crime usually haul in money laundering, too. Theoretically it’s possible, though we’re short on actual case studies of this happening. Charlie Shrem was sent to prison for exchanging US dollars for bitcoins that were spent later by someone else on… you guessed it, drugs. Apparently that counts as money laundering, though obviously not the banker-class kind. No mainstream reports really questioned the legitimacy of Shrem’s prosecution for such a crime.
I’ll give Naughton some credit for not mentioning terrorism or child porn, though. Any time you see those two pop up together in the same sentence, stop reading right there and cancel your subscription or delete your bookmark to wherever you read it.
The technology behind bitcoin is far more useful!
The other example this article gives of blockchain technology in action is Honduras land titles. We see this one often too. Everyone can relate to real estate on some level, I suppose.
Then there’s the question of how records concerning physical real estate are made more secure by putting them on a blockchain. There still needs to be a third-party legal process to connect them, which trumps any blockchain record anywhere. If someone seizes your building, changes the locks and hires a security guard to rough you up, screaming “but it’s on the blockchain!” will not help you.
Mainstream media loves to talk about The Blockchain, “bitcoin’s underlying technology”, and its myriad uses — without ever telling us how a blockchain would be useful in any of them.
Finextra’s David Birch machine-gunned the whole ‘forget bitcoin, it’s blockchain!’ meme in this excellent piece last week — it’s a satisfying read.
The Guardian article concludes with some stuff about it being difficult to implement change in places like the UK because “we do things differently here”. OK, fair enough on that one. In the end, it may not matter. Bitcoin does not need official approval to succeed — it just needs to work on some level for its value to become self-evident, and users appear. Just as they’ve been doing since bitcoin began seven years ago.
You don’t need media gatekeepers like this
Anyway, here’s my point. If I take a week away from bitcoin news I’m left behind. I’ve seen at least one guy post about bitcoin development while the nurses were washing his newborn baby. Bitcoin moves that fast.
If you’re a mainstream journalist, even if business, tech and/or finance is your field, you probably don’t have a handle on where bitcoin is at right now. At least not enough to be writing columns for a major publication about it.
(Generalist mass media reporters covering any topic on which they clearly have no expertise is a big problem. See also: science, politics… and everything else. But we’ll leave that for another time)
With all that in mind, be wary of anything you see in the mass media. If it’s a topic unfamiliar to you too, don’t assume you’re getting an inside track by reading one of their reports.
The internet gives you the power to go direct to knowledgable sources on most topics — the real experts — and leapfrog the info-gatekeepers. Every topic has a specialist news service and hard data. For bitcoin, there’s CoinDesk, BraveNewCoin, BitcoinMagazine, Kaiko, Reddit, FollowTheCoin, and a bunch of others.
Single-person blogs, twitter feeds and news aggregators have more truth than newspapers and TV. If you want to get closer, jump there first.
January 25, 2016