People Aren’t Actually “Investing” in Cryptocurrency, They’re Just Gambling
Last week — one day before Bitcoin took its biggest single-day plunge ever — I published an article entitled Bitcoin Is Dead. The article re-stated my strong belief that Bitcoin Is a Giant Ponzi Scheme and outlined the eight reasons why I believe Bitcoin won’t be the global currency of the future.
I don’t check stats on Sunday, but when I woke up Monday morning, I realized that I may have set Medium on fire over the weekend:
As I spent the morning wading through the cesspool that is the comments section, it occurred to me that many of the responses sounded the same — sometimes word-for-word verbatim — like pre-rehearsed lines from a Scientologist.
Most of all, it made me realize that a huge number of people who comment online have lost the ability to reason.
The Socratic method, which has sustained fruitful public debate for thousands of years, seems to be going extinct. Supposedly invented by Socrates, the method is “a form of cooperative argumentative dialogue between individuals, based on asking and answering questions to stimulate critical thinking and to draw out ideas and underlying presuppositions.”
To be clear, I don’t care if people disagree with me. I don’t even care if they insult me, so long as it’s funny. But if I have to spend hours slogging through comments, I want to find highly intelligent gems that stimulate my thinking.
But when it comes to Bitboys and their undying support for Bitcoin, their “arguments” seem to fall almost exclusively into ten categories, and as you’ll see, they 1.) never address the actual arguments, and 2.) rarely use proper spelling and grammar.
My hope is that by sharing some of these comments with you, you’ll appreciate the need for society to tune up our argumentation skills. I hope it will also equip you to have fruitful conversations with people who are blindly pro-crypto (as opposed to the more healthy stance: rationally pro-crypto.)
1. The Personal Insult
“You’re a typical pro control freak Liberal Socialist Communists that has no concept of how capitalism works and evolves. Basically you’re a self aggrandizing idiot full of bullshit.”
Another person called me a Boomer.
Rational response: I am a 35-year-old award-winning author, filmmaker, and top Medium writer in Politics and Future. A quick look through my nearly 500 published articles will make it clear that I abhor government and corruption, that I’m anti-partisan and don’t vote, and that I have an extremely clear understanding of how capitalism works — especially for those who control it. Unfortunately, you haven’t convinced me that Bitcoin isn’t a Ponzi scheme and will become the global currency.
2. The “I Can’t Even” Guy
“So much fals information.. I don’t even want to explain it all to you.. its not worth my time.”
“Stop breathing air! You are taking away air that other people could breath!”
“Didn’t read, just came here to downvote.” (*Which you can’t actually do on Medium.)
Rational response: Unfortunately… you haven’t convinced me that Bitcoin isn’t a Ponzi scheme and will become the global currency.
3. The Market Manipulator Accusation
“You’re just trying to drive fear into the market for people to acquire BTC cheaper.”
“How does it feel to sellout to whoever paid you for this ahead of them crashing the price today? lots of good people got fucked and you helped it happen.”
Rational response: No one paid me to write this article, but I appreciate that you think I have the power to wipe out half a trillion dollars with a single post.
I’ve never owned BTC and never will. I don’t care if the price goes up or down — I just want to protect people when the bubble bursts and folks realize they got caught up in the hysteria of the biggest Ponzi scheme in history.
4. The Stock Market Diversion
“By this reasoning, how is the stock market not a Ponzi scheme?”
Rational response: You aren’t comparing apples to apples. Unlike Bitcoin, companies create and sell products and services and pay dividends to shareholders. Versus Bitcoin, which is essentially a video game when you only win if someone else buys your coins for more than you paid for them.
Granted, more and more speculators are treating the stock market like a Ponzi scheme —looking at you, Tesla shareholders — which is a great reason to introduce a transaction tax to curb day trading and a heftier capital gains tax on passive income.
Unfortunately, a malcomparison between crypto and the stock market doesn’t convince me that Bitcoin isn’t a Ponzi scheme and will become the global currency.
5. The Bear Play
“After every significant BTC price drop, these types of bearish sentiments come to the fore…Bitcoin’s volatility is nothing new. It will keep being volatile. Long term holders have gotten use to it.”
Rational response: Volatility isn’t what we’re talking about here. Bear in mind I published this post before the massive price drop, and that I published my previous Bitcoin post when BTC was at an all-time high.
6. The Gold Bug
“Precious metals are the same as crypto Gold, is the biggest asset by market cap in the world. What made gold valuable? People’s consensus and speculations. Gold and all precious metals do nothing. People decided they are precious, same as Bitcoin and other crypto.”
Rational response: I agree! Gold, like crypto, is worthless without a collective public delusion to back it. Your assertion doesn’t refute my point but actually reinforces it.
7. The FOMO Cynic
“Looks like someone is jealous they didn’t get in early.”
“You couldn’t FOMO more.”
“Well this article was quite salty and misleading in everyway. Sounds like you got into crypto last month and faced your first downhill and instantly sold at a loss.”
Rational response: The fact that you mention “getting in early” belies the fact that crypto speculation is a Ponzi scheme.
8. The Bitboy
“I’m an early adopter of BTC. Invested $2,000.00 back on July 19, 2010 when BTC was @ $. 09/ea. Do the math…”
Rational response: What this supposed billionaire doesn’t understand is that this doesn’t refute the Ponzi argument at all. To be sure, many fortunes will be made in the years ahead, but an equal amount of money will be lost. How did this alleged early adopter make his money? By having later speculators buy in.
9. Strength In Numbers
“145,813 validators staking 4,665,846 ETH are all wrong????”
Though I won’t go so far as to agree with Oscar Wilde, who said that “everything popular is wrong,” but he was certainly on to something.
I don’t mean to be crass, but Germany once voted for Hitler, and TIME Magazine dubbed him their Person of the Year. Popularity is irrelevant.
Rational response: The lemming mentality is certainly alluring to most homo sapiens, but just because a scheme has ~145,000 participants doesn’t mean it will become the global currency and isn’t a Ponzi scheme.
Probably the laziest response of all, writing off my critiques as fear, uncertainty, and doubt.
Rational response: I have nothing to fear as a non-holder in BTC and ETH. I have no dogs in the fight. I am certain that Bitcoin is a Ponzi scheme. And there’s nothing wrong with seriously questioning and critiquing anything that sounds too good to be true. Typically, we call that “wisdom.”
100,000+ views and hundreds of comments later, not a single commenter made a genuine effort to refute my proposition that Bitcoin is currently being treated as a Ponzi scheme and that BTC won’t be the global currency of the future.
Because the honest folks stay quiet.
Though plenty of people speculate on forex markets, true investors don’t “invest” in American dollars, Mexican pesos, or British pounds, because they know currency is just a representation of underlying value — be it actual real value or just government-sanctioned violence. Bitcoin has neither of these underlying properties.
Here’s what actually happens when you speculate on Bitcoin:
- You make a bet on human psychology.
- You profit someone else who bought earlier than you.
- You hope to turn a profit by selling to someone who will buy later than you.
- You hand over (albeit highly corrupted) legal tender for some bytes in a file. Because that’s all cryptocurrency is: bytes in a file to which people have temporarily assigned extravagant prices.
I’m not saying you shouldn’t buy Bitcoin. I think it’s a wonderful way to vote with your dollars in protest of government manipulation of fiat currency. Just stop pretending that crypto is a sound investment with real-world value.
There’s a reason why governments make Ponzi schemes illegal — because in the end, the vast majority of the speculators lose their money and society is poorer for it.
When “Satoshi Nakamoto” started Bitcoin, his/her/their/its dream wasn’t to create a Ponzi scheme where people would buy and hold coins until the price increased. It was to spread power, create a distributed ledger, popularize blockchain technology.
Now, because of human greed, the industry is best known as a get-rich-quick scheme. And if we know anything about governments, it’s that they’ll use this hysteria as an excuse to crack down on crypto speculation.
And maybe that’s not a bad thing, because then blockchain technology can re-focus on fulfilling its ultimate destiny — not as a casino to snatch quick cash at another’s expense, but as a means to revolutionize the banking, insurance, healthcare, remittance, voting, contract, securitization, and education industries.
A Call For Reason
I hope this article has been insightful. I hope it helps you have more sensible conversations with people who think uncritically about cryptocurrency.
None of us will ever perfectly master the art of rational debate, but it’s vitally important that we try.
In the meantime, I hope my lovely haters will take the time to re-visit the works of Plato and Aristotle and learn the Socratic method so we can have a fruitful discussion that builds up our society. I’m strongly pro-blockchain, but I also want to protect millions of people from getting burned by crypto. This technology is far too important to not steward it well.