The Fear of Bitcoin

For years, pundits have called for the demise and death of Bitcoin. Many have called this a bubble, a fad, nothing more than a ‘digital mirage’. Why does Bitcoin and cryptocurrency incite so much fear?

Fear The Bitcoin, Fear The Future

To answer that question, we first need to look at those high-profile pundits, who they are, what they have said — and even what they are saying now. My first personal favorite is Peter Schiff. Taking a quote from him in a recent rant — er, I mean interview Peter was quoted as saying:

“The main benefit of bitcoin — the only segment of society where it’s used for something other than speculation — is crime,”

If that statement is not intended to be fear-mongering (and full of ignorance), I simply do not know what is. Peter has also made numerous other ridiculous claims including this gem from his brash interview with Max Keizer “no merchants are pricing their products in bitcoin”. Has he never heard of www.bitpremier.com? Care to explain Dubai and the new condos for sale with bitcoin prices? Looks like those are priced in bitcoin to me. But heck, what do I know. I am living in a bubble, right?

So why would an intelligent businessman make such a false claim? One reason could be fear that Bitcoin will replace gold as the new age store of value — and with Peter being the Chairman of Schiff Gold (and a total gold schill) it’s pretty clear how that line can be connected. So, his views can be explained as such and we in cryptoland have pretty much accepted that. Except one thing. Read this tweet from Peter on Sept 6th.

Here is my new question (and one I have asked myself for some time) …could Peter be a hidden bitcoin holder? Interesting debate when you stop for a moment. Here is an intelligent man, making seemingly short-sided assertions against bitcoin and then sending a tweet touting both BTC AND Gold as being better than fiat? I could be way off, but seems like Peter has a set of private keys himself. Here is a nice excerpt from the article that can be found on schiffgold.com:

Does this mean you should avoid Bitcoin and other cryptocurrencies completely?

Not necessarily.

Bitcoin has significant upside. BTC and precious metals both offer alternatives to government monopolized fiat currency. They play a similar role as free market, sound money. But as with any financial instrument, there are potential pitfalls. Diversifying your cryptocurrency portfolio with precious metals can help mitigate some of the potential downside and put you in an overall stronger financial position.

So, I think we have explained why the fear spews from Peter’s mouth. We have summed it up as either simple ignorance of bitcoin and a strong passion for gold and his businesses; or just shilling gold while leaving just enough for those that research bitcoin to ignore his words.

Every investor and businessman must (and needs) respect the accomplishments of Warren Buffet. For decades, Warren has made extremely intelligent and well calculated moves and decisions. However, this is one that I cannot disagree more with him on. Warren is missing the point. He likens bitcoin to a check or money order of all things. Only a method to transfer money. Needless to say, the technology is something he is not grasping. As intelligent as he is, Warren has not done his homework on bitcoin, blockchain or cryptocurrency and fails to see the bigger picture. Our world is changing to an all-digital world. Fiat in its current form will die. If it wants to survive the reality is — fiat needs crypto more than crypto needs fiat. And honestly, no single person born this side of the turn of the century as ANY interest in lugging around gold or silver. Technology will win.

Now, let’s touch on the hundreds of posts and opinions I am consistently sent calling for the ‘banning’ or ‘end’ of bitcoin. The vast majority of the articles and opinion pieces hang on buzz words uttered from the likes of Schiff and Buffet. They lack the research and knowledge required to make and defend intelligent counterarguments to cryptocurrency. All attempt to prove or assume that governments can somehow shutdown a decentralized network run by many but no single person at the same time. Sure, good luck with that one. For those of you that read my blog post Crypto and Blockchain Is a Bubble — But Not the Bubble Experts Think, I made a few strong statements. One of them being:

“No one can control that which cannot be controlled.”

One of my favorite opinion pieces was pointing out how many countries have ‘banned’ crypto. The list being: Bolivia, Ecuador, Bangladesh and Kyrgyzstan. All economic power houses of the world, right? Ok, I will make this clear for us all. Expect any and all 3rd world (or near 3rd world) countries and countries lead by dictators to ban cryptocurrency. Expect all countries known for oppression of their people to do so as well — or at least attempt to place incredible controls around cryptocurrency. But do not use them as the example for which modernized and free 1st world countries will make their banking and financial decisions in the future. Its common sense. Instead let’s look at the meccas of the financial world. Japan now accepts cryptocurrency as a legal form of payment (a recent reversal after intense pressure from banks and retailers alike). Dubai, as mentioned earlier, is now legally selling condos in bitcoin and Canada has recently announced their first legally approved and regualted ICO. In the US, there is now a bill gaining traction to remove any and all tax burdens for bitcoin transactions less than $600 — Governments seem to be attempting integration with cryptocurrency. Not banning it.

Finally, Robert Shiller, a Nobel prize winner in economics, has likened bitcoin and cryptocurrency to a bubble. Now, in fairness in one of his interviews he did try and down play his opinions. Robert also did pay respects to blockchain technology (though I am unclear if he knows the term blockchain), however I am still strong on the fact that he is missing the mark. Let me point out to you his interview with Quartz. Here is the excerpt for you to read and make your own conclusions on the depth in which the esteemed (and very intelligent) Robert Shiller has placed on researching and understanding our beloved crypto.

Quartz: Have you by any chance looked at initial coin offerings?

Shiller: No, what is an initial coin offering?

Quartz: It’s like using a crypto token, not bitcoin itself but the blockchain architecture, and issuing these virtual encrypted tokens almost like shares, even though they say they’re not shares.

Shiller: How is it different from bitcoin?

Quartz: It’s somewhat like crowdfunding. Say you’ve started a bar, and you want to fund it by issuing these tokens. A token is worth one beer, but your bar will only ever serve a set number of beers. If people think it will be a really hot bar, the value of the tokens trades for up to $100 or $200. People are raising hundreds of millions of dollars this way, with pretty thin business plans.

Shiller: Yeah, that’s a classic bubble. I’ll have to read about that. There are a lot of cryptocurrencies but they don’t have as good a story as bitcoin. Maybe there’s a new narrative. Maybe this is a more viral story. You’re making me think about writing something about this. You have my thinking going.

In closing, the fear of bitcoin can be summed up as this: Ignorance and fear-mongering. All of the above esteemed individuals I have pointed out clearly have not done their homework. Schiff making claims that you ‘cannot buy anything in bitcoin’ and that its ‘only use outside of speculation is crime’. Buffet calling bitcoin a ‘check’ or ‘money order’ and finally Shiller, not even knowing what an ICO is (and seemingly attempting to cash in on bitcoin by being its opponent) — look for his book on the ICO bubble soon.

My message to you all, educate yourselves. Look not only at the narratives that bloggers like myself and financial pundits alike are pushing regarding bitcoin and crypto. Look deeper at the underlying messages and hints laid out for us. Fiat is struggling, some may say dying. If this does occur, do we HONESTLY see ourselves ditching the convince of our digital world and lugging around gold or silver to the grocery store? I think not.

The future of crypto is hidden somewhere between the FUD and the exuberant excitement I and others write.

Be wise, but do not fear.

~CryptoJayson~

Follow me on twitter @crypto_jayson

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