Biased Articles by ‘Old Guard’ Media on Bitcoin
By Dr. Chris Kacher of Hanse Digital Access on Altcoin Academy
Riding the Revolutionary Rocket with Cryptotechnologies… Entirely Evolutionary™
First published HERE.
Some Say ‘Bloomturd’
Just as the Wall Street Journal was slow to understand blockchain technology given its history of wrong-headed articles on bitcoin and blockchain, Bloomberg recently printed an article entitled “Bitcoin and Gold Are Monuments To Irrationality” on how gold and bitcoin are not rational stores of value. I’ve had numerous such anti-blockchain related articles put to me since 2013. The amount of falsely reported or twisted facts especially by mainstream media no longer amazes me. Fortunately, the tide is turning and some are reaching a deeper level of understanding, the above article notwithstanding. I would agree that while gold has been the fear of trade during times of crisis, over the long haul, gold fails as a good investment. Bitcoin, meanwhile, has so far proven out. No investment comes close to comparing with the price appreciation of bitcoin over its decade-long life.
Peer-to-Peer and the Dark Market
Let’s examine history. FDR made gold illegal to hold, then repriced gold effectively devaluing the dollar by 41% overnight. Likewise, the US could make bitcoin illegal to hold but this would just embolden decentralized exchanges and the D-market (Dark Market). Forbes magazine published an article some years back that the D-market at $11 T is the fastest growing market in the world. Further, bitcoin transactions can be done as they’ve been done since 2013- in peer-to-peer fashion via localbitcoins.com or, in more recent years, via decentralized exchanges. History since the 1990s shows the US tried to eliminate decentralized bit torrent technology due to copyright violations. They failed. Good luck doing this with bitcoin.
Just Gotta Have Faith?
The author writes, ‘Gold is only worth what people believe it is worth’. This is called faith which is true of everything. The question is what the market ascribes to the item. Excluding collectibles which are based on the perception of value, it typically reduces down to present utility as well as a future utility which translates into projected future value. That said, bubbles can occur where the value gets well ahead of rationality. Markets can behave irrationally, thus top traders continue to profit off of such excessive bouts of irrationality.
Gold has been one of the worst investments over hundreds of years though, in times of crisis, traders can use quantamental strategies to profit nicely off gold. Bitcoin, meanwhile, reflects store of value in the Age of QE where fiat currencies are being eroded by money printing which has pushed interest rates to record low levels.
The author says bitcoin is not a stable store of value. While I agree, give it time to mature. It is only a decade old.
The author says bitcoin’s price can be manipulated due to the top-heavy whales who hold it. Guess what? This is true of every bond, stock, and commodity. It’s called Wall St. institutional influence. But should whales try to push the price above or below rationality, market forces will correct for this excess. They know this thus have to pick their spots, just as the top gun portfolio managers on Wall Street do. Each whale is in it for themselves, so the idea they would all gang up against the market is a false notion. In real-time, some whales would take profits if the price went up too much, thus collapsing the intent of the ‘gang’.
Another Bloomberg article along similar lines shows a recent chart of bitcoin and concludes that for every year bitcoin gains, the next year, the gains are destroyed. What laughable bias. The author uses the following chart to ‘prove’ his case:
Meanwhile, if the author were unbiased, he would have shown the following long term price history of bitcoin:
$1 in bitcoin in 2009 at an average cost of $0.001 in 2009 (one-tenth of a cent) is worth more than $10 million today.
Bitcoin is not backed on faith alone but rather on a mathematical formula which so far has proven out. It is the only store of value technology that is truly decentralized. Nothing including fiat nor gold can make such a claim.
To quote the author from the first article cited above, “God forbid — Bitcoin”. Indeed, when it comes to economic matters, the masses often work on faith, not fact, but in the long run, fact wins.
(͡:B ͜ʖ ͡:B)