This article explains a bunch of myths and scams that surround Bitcoin and other cryptocurrencies in a thorough, source-backed, hype-free way. Written for my peers.
The Bitcoin Hype is Real
The truth is there is so much f*cking hype over Bitcoin, we need thorough examination to demonstrate a well-rounded view for the beginners. Those who are a little financially bashful. Those are the people that Bitcoin needs to convince –it’s those who are critical of Bitcoin today who will be its strongest ambassadors, tomorrow.
There are a number of myths and criticisms of cryptocurrency that are beginning to wash out in the laundry, so to speak, as it reaches the mainstream. Just like every cutting edge technology, there’s either a bubble that bursts or there’s widespread adoption. Cryptocurrencies are moving forward for the latter; they are heading into the mainstream.
While altcoins built upon blockchain technology may come and go, the technology itself isn’t going anywhere. And in between the hills and valleys on cryptocurrency exchange charts, therein lies a crypto trader’s fortune.
But perhaps what’s more is the controlled deflationary nature of cryptocurrencies like Bitcoin –their value will rise over time and then safely level off in a fashion controlled by the very protocol that underpins them.
This means that while there are fortunes to be made today by risk-taking cryptocurrency traders, those who buy and hold will also stand to gain many times over their initial exchanges over time as well.
By now, you understand the reason for the hype. Let’s take a brief look at a number of myths and criticisms that surround Bitcoin and other cryptocurrencies.
Related: Best Tools to Buy, Sell, Trade, Hold, or Spend Crypto Currency
From algorithmic trading and Decentralized Finance to navigating the US tax system with cryptocurrency investments, Ivan on Tech has you covered.Take a Course
10 Myths That Bitcoin Needs to Overcome in Popular Opinion
1. Bitcoin is a Scam
As we previously discussed in “What is Money?” (course lesson) –you might be thinking the same of America’s greenback. It isn’t tied to a finite resource like gold anymore, after all. Now it’s just a piece of paper whose value rises and falls with inflation –and metrics most people hardly understand, on a ledger few are privy to see in its entirety, and printed without a known limit unhinged from gold. It’s spiraling out of control.
The further down the crypto rabbit hole you go, the more the status quo feels like a scam, doesn’t it? But I’ll spare you the rhetoric.
Yesterday a five dollar US note could buy you a meal, today it struggles to buy you a head of lettuce. It’s still $5 USD on paper, but its value is a moving target. According to the US Inflation Calculator, $20 in 1913 would pass for $494.86 at the time of writing this (August 2017).
Was that example too broad? Ok, $20 in 1981 would buy you a value of $53.90 today. That’s still a 169.5% rate of inflation. And most people’s working wages haven’t caught up.
The Difference Between the US Dollar and Bitcoin
Bitcoin is the most mainstream of all cryptocurrencies, so I will focus on it for the remainder of this article.
Bitcoin has a controlled supply baked into its protocol. Similar to gold, there is an established number of Bitcoins that will exist, and they are being introduced over time at a rate which is reduced by 50% on a schedule based on a range of predefined factors (approximately every 4 years).
The final number of all Bitcoins available on the market will be 21 million. When we reach 21 million Bitcoins, the cryptocurrency will be deflationary –meaning that if you buy 1 Bitcoin today at $3,000, that same coin will be worth much more in 3, 5, 10, or 20 years from now.
This thought is quite hard for many to wrap their minds around –but so was the internet, and look how that turned out; it’s considered a utility like running water and a human right by many governments today.
There is enough evidence in history to prove that any currency with a controlled supply will work –and those that sow uncertainty, fear, and doubt (FUD) rely on these emotions instead of logic to paint cryptocurrencies in a negative light.
When you look at the big picture it is easy to see that this first-of-its-kind digital currency is on a clear trajectory. Controlled supply works, and now without a governing centralized body no less –this is nothing short of revolutionary.
2. A Fixed Supply of Money is Dangerous
Some will argue that a deflationary fixed supply of money is dangerous because it will drive costs so low that the amount paid for them will no longer be equitable for those supplying goods and services and job creation will wane. This is symptomatic to what is known as a “deflationary spiral”.
Under the current system of national currency, market influences have the potential to sharply affect the value, or purchasing power, of a country’s currency –or a group of countries like the European Union. This often causes the prices of things you purchase to change (read: inflate) on a frequent basis.
Inflation leads to pressure on businesses to open their wallets up and pay a higher minimum wage, which in turn creates less jobs, and puts so much pressure on small businesses that many have to consider shuttering their doors as we’re seeing in Canada. In addition, the gig economy and the prevalence of temporary or part time jobs are compounding the system-wide problem.
Russ Roberts, professor of economics at George Mason University explains that a fixed supply of money is certainly different, however the rate of deflation posed by Bitcoin will occur at such a controlled rate that markets will have time to adjust.
“Elaborate controls to make sure that currency is not produced in greater numbers is not something any other currency, like the dollar or the euro, has.”
“That is considered very destructive in today’s economies, mostly because when it occurs, it is unexpected,” says Roberts. But he thinks that won’t apply in an economy where deflation is expected. “In a Bitcoin world, everyone would anticipate that, and they know what they got paid would buy more than it would now.”
From Bitcoin Wiki; “A deflationary spiral occurs when the value of a currency, relative to the goods in an economy, increases continually as a result of hoarding. As the value of the currency relative to the goods in the economy increase, people have the incentive to hoard the currency, because by merely holding it, they hope to be able to purchase more goods for less money in the future. A lack of currency available in the market causes the price of goods to further decrease, resulting in more hoarding.”
“The key difference is that people don’t foresee a fixed cost (unit amount) that they must pay with Bitcoin. If the value of the Bitcoins that they own increases, then any future cost will take a proportionally smaller amount of Bitcoins. There isn’t any fixed incentive to holding Bitcoin other than speculation”.
And elsewhere; “Keynesian economists argue that deflation is bad for an economy because it incentivizes individuals and businesses to save money rather than invest in businesses and create jobs. The Austrian school of thought counters this criticism, claiming that as deflation occurs in all stages of production, entrepreneurs who invest benefit from it. As a result, profit ratios tend to stay the same and only their magnitudes change. In other words, in a deflationary environment, goods and services decrease in price, but at the same time the cost for the production of these goods and services tend to decrease proportionally, effectively not affecting profits. Price deflation encourages an increase in hoarding — hence savings — which in turn tends to lower interest rates and increase the incentive for entrepreneurs to invest in projects of longer term”.
Simply put; deflation will likely have a positive effect on the distribution of currency, and the worst-case scenario for this hypothetical problem won’t happen overnight if it happens at all.
While hoarding Bitcoin is possible today (and oft suggested by early adopters), as more people use it and its value increases, the system will work itself out gradually and without turmoil.
Worth mention is that Bitcoin isn’t due to reach its final quantity of 21 million for another few decades or so –plenty of time to pivot and adjust should we need to.
3. Cryptocurrencies like Bitcoin are Illegal
Cryptocurrencies like Bitcoin are legal in most countries –namely G7 countries and the European Union—where the usage of Bitcoin is legal with differing regulatory rules and classifications. In many countries Bitcoin also has a legal status as money or a commodity.
Countries Where Bitcoin is Illegal
Instead of mentioning the long list of countries and territories where Bitcoin is legal, we thought it less time consuming to provide a short list of places where Bitcoin is illegal.
This list is as of August 2017, so you can also visit our sources for updates information (BitLegal, CNN, Wikipedia). Worth mention is that we are not lawyers and this is not legal advice. Nothing on this blog should be considered legal or financial advice.
Bitcoin is illegal in the following countries and/or territories:
- Saudi Arabia
Now that we understand it’s legal –I’ll level with you.
This may come as a surprise.
Like FIAT money, you can do illegal things with Bitcoin (gasp!). If you aren’t doing anything illegal, as with FIAT, you’ve got nothing to worry about. You will not go to jail for holding or trading cryptocurrency if your country and the country you’re residing in has declared it legal. All you need to do is a little research to protect yourself.
Bitcoin and Taxes
Here’s the rub: if you use Bitcoin or other cryptocurrencies and you want to stay above board, it’s probably best you keep up on your taxes similarly as you would with profits you gain on the traditional stock market. While it may be grey today, it will not be forever. I’ll discuss US politics here, because we all know they’re the biggest elephant in the room. But my advice is simple; talk to your accountant if you want to stay futureproof.
Regulators are beginning to work with cryptocurrency exchanges in the United States, and that isn’t all bad. Working with authorities has its benefits, this does not mean the heyday is over. It means that cryptocurrencies are taking steps closer to wider recognition and legitimacy.
First let’s look at a few reports which discuss regulation of cryptocurrency. Forbes has a report that illustrates the IRS’ predictable stance;
“The IRS considers cryptocurrencies, including Bitcoin, to be “intangible property.” Investors and traders holding cryptocurrency as a capital asset should use capital gain or loss tax treatment on sales and exchanges, with the realization method. For example, if you buy Bitcoins with U.S. dollars and later sell them for U.S. dollars, a capital gain or loss needs to be reported on that transaction.”
So on one hand you have the IRS –which is thought to be an unconstitutional entity by many, but I won’t go there—who thinks you should declare every little thing (surprise!).
On the other hand we have Republicans in US congress telling the IRS to take a step back. Score one for the Republican party.
In a fight between the IRS and Coinbase (one of the world’s most popular crypto exchanges), Republican members of congress stepped in and said;
“The (IRS) summons is estimated to affect 500,000 active Coinbase customers and would result in the production of millions of pages of associated records, many of which contain personally identifiable information … Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals,” says the letter, which is signed by Sen. Orrin Hatch (R-Ut), Chairman of the Senate Finance Committee, and by Vern Buchanan and Kevin Brady, who head the House Committee on Ways and Means.” (Emphasis is my own).
So my opinion is that we’ve got a battle on our hands, and there are some capable people fighting it for us. With a global phenomenon like cryptocurrency, it’s safe to assume that any moves to “negatively” regulate it will be met with severe backlash.
For now, your information is safe and what you do with Bitcoin or other crypotcurrencies is your business for the most part.c
Related: Initial Coin Offerings (ICO) are considered securities by the SEC
However, there are benefits of regulation.
Without regulation, exchanges can do some pretty shady things; they can forgo ample security measures, misuse your cryptocurrency, feign fake hacks and say they’re sorry, or not operate in a way you would expect from a reputable exchange. It’s my guess that some exchange hacks are inside jobs. But we’ll never know without someone looking over their shoulder.
One example that raised my eyebrow was the move Poloniex made when regulators came knocking. I won’t suggest wrongdoing, many exchanges are dropping US customers and I’m not a news source –but here’s the Poloniex example;
Poloniex claims they are regulated. That your money and cryptocurrencies are safe. But then they made a sudden move to suspend services to Washington customers because regulatory agencies asked to take a look at their books.
One can only wonder what they’re hiding, am I right? The move creates uncertainty and speculation. At the time of writing, Bitcoin alone has a market cap of $45,457,393,440. That’s a lot of money. No exchange instills much confidence when they aren’t fully transparent.
LedgerX is one such exchange that is friendly with regulators, as well as Gemini Trust (a cryptocurrency exchange created by Facebook ‘losers’, the Winklevoss twins). Both have the approvals they need to take cryptocurrency a few steps closer to a level of safety most seasoned investors and traders would appreciate.
Before I wrap this point up, if you choose to pay taxes on cryptocurrency today, and that’s still an if—at least you can still use it to avoid paying currency conversion fees on overseas transfers, avoid banking fees, avoid escrow fees, and much, much more.
This is only the tip of the iceberg, today I’m only telling you how to navigate the naysayers. There is still plenty for you to discover –and trust me, that’s a good thing.
4. Bitcoin is a Ponzi Scheme
When the United States, Canada, Australia, New Zealand, and the Entire European Union all give a “legal” status to something, you can bet it likely isn’t a Ponzi scheme.
These countries may allow banks to operate in a way that hurts their citizens (in my opinion), but you can bet your right arm they’ve been very critical of cryptocurrency. I could stop there, but let’s talk about how some people think Bitcoin is a Ponzi Scheme.
A Ponzi scheme is a dishonest top-down approach where founders promise investors that they’ll profit. The success of an investor in a Ponzi scheme comes at the expense of those who invest after them. In a Ponzi scheme early adopters rule the roost and it’s a zero-sum game for the majority who proceed them.
Think about that for a moment.
Early adopters of a Ponzi scheme, usually influencers, get in first. Anyone they pull in pays upwards to the early adopter –pay to play. That is an expense to late adopters. Crypto does not work that way, and neither does the stock market.
Anyone who thinks so needs to read up on MLM businesses who I’ve personally seen ravage the Philippines and their ambitious go-getters.
Pay to be able to sell, buy your first products at full price –get rich! Watch this video! Meet this guy! He was like you once! Emotion, emotion, emotion. And the early adopter gets paid a recruiter’s fee. I can’t say that’s Ponzi, but it sure feels like it. They’re legal, and yet much shadier than crypto in my opinion.
Anything where you make more money recruiting fools than doing actual business isn’t equitable for all, and that isn’t crypto.
Anyone who is investigating a new business to participate in will need to do their research –Ponzi schemes are old hat, and they exist in every industry. Even if they cling to legality by their toenails as many MLM businesses do because the truth is in the fine print.
If I had to suggest maybe there’s room for this in the cryptocurrency world, I’d point my wagging finger at BitConnect. It feels a little like MLM, I’ll be honest.
But Bitcoin, Ethereum, Dash, EOS, Golem, and hundreds of other altcoins I’ve personally researched are not Ponzi. Full stop.
Read an altcoin’s white paper, don’t be a fool. But anyone who says the entire cryptocurrency world, or even Bitcoin, is a Ponzi scheme –I’d ask just how much research they’ve done on the subject.
Is Bitcoin a Ponzi Scheme?
Let’s take a deeper look at Bitcoin; there is no central governing body and no promises of fame and fortune, just like the stock market. With Bitcoin and most other altcoins, both early adopters and late adopters can have a win-win outcome.
And like the stock market, those who get in on a stock (or in this case, a Bitcoin) early have the most to gain. So in that sense, yes, early adopters who bought in back in 2009 and held onto their cryptocurrency can stand to gain more than late adopters. Bitcoin has made many average people millionaires over the years.
But that’s why everyone wishes they invested in Apple before Steve Jobs came back. It doesn’t smell like a Ponzi, it smells like a lost opportunity.
And that is probably the central reason why some call it a Ponzi scheme. Sour grapes they didn’t get in early, couldn’t bare the risk, didn’t see the potential, and they continue to think it’s over. And I don’t think you’d be reading this if you thought it was over.
I say be happy those people exist, it makes buying in today easier.
5. Bitcoin Hacked!
Bitcoin and other cryptocurrencies “live” on a blockchain. Let’s speak in visual terms; imagine a bunch of blocks on a chain. Imagine each block is a full filing cabinet that needs processing. And a copy of this blockchain is stored on hundreds of thousands of computers around the world, not just one. Copies can be compared to one another for integrity.
If block 91 is currently being worked on and a malicious hacker wants to alter block 74 to make himself rich, he’d have to reprocess every subsequent block that follows it.
These computers are called “miners” (re: Bitcoin mining) and they are very expensive machines to purchase and run. The amount of resources required to accomplish this over the internet is astronomical. In addition, this hacker would have to complete processing blocks 74-91 before the 91st block is completed by all others who are currently processing it.
The amount of speed and electricity required to make hacking the blockchain possible makes it near impossible. As a result of this structure trust is baked into the system, so you don’t actually need to trust any of the humans involved. Let that soak in.
Hacking and Bitcoin
Now back to those humans.
Laptops, phones, routers, and exchanges.
To my knowledge there are no known cases where a paper wallet or hardware wallet were hacked. (The computer running the software that transfers your private keys to a paper wallet or hardware wallet can be).
However, exchanges have been hacked, laptops have been hacked, internet routers have been hacked, and phones –you should consider your smartphone the most open piece of tech you own. Use at your own risk.
My point is that the Bitcoin protocol itself has never been hacked. The devices that access cryptocurrency have. And this problem is on the individual level. So when someone says “wasn’t Bitcoin hacked?” you can say no.
Do not leave your entire life savings on an online wallet, or an exchange. Use paper wallets. Use hardware wallets. Keep your private keys safe and offline. Ensure your computer is up to date and virus and malware free.
If you can do this, you will minimize your risk. If you keep your private key or passphrases or paper wallet in your leather wallet and that leather wallet is stolen, you’ve lost it all. Humans get hacked. Bitcoin does not get hacked. It’s virtually immutable.
If you are worried about direct hacks to a blockchain, avoid newly introduced cryptocurrencies. Stick with the tried and true. This goes for any networked technology. Banking websites, too.
How to Protect Your Bitcoin from Being Hacked or Stolen
As previously suggested, keep the bulk of your cryptocurrency offline, keep your device’s operating system up to date, use antivirus software like Avira or AVG, and anti-malware software like MalwareBytes.
Advanced users can transfer their cryptocurrency’s private keys offline using a “live” operating system –one that is run from a read-only disc like a DVD, this is common with Ubuntu users. And do so when your computer is not connected to the internet.
Lastly, if and when you use an exchange it is wise to research their policies that discuss what will happen should they be hacked. Do they have insurance?
It is important to remember that just like paper money –if you lose it, it’s probably gone for good.
6. Bitcoin is Untraceable
A key attribute of the blockchain is that it’s a massive, decentralized, and in many cases, a public ledger. The value of your Bitcoin is associated to your public key, and it along with most altcoins are publicly viewable.
Take one of my Ethereum wallets for example –at the end of every blog post or page on Hobo with a Laptop I share my cryptocurrency QR codes for readers to leave a tip. That QR code is my public key, and there are websites that will make the value of any wallet available for all to see (even offline wallets).
Now with that said, it doesn’t have my name associated to it. Or does it? If I never associated that public key with my blog, and therefore my identity, would one be able to learn that it was in fact my Ethereum wallet?
While it is possible to create a wallet and never associate your true identity to it, one could follow the money to discover the identity of a wallet holder.
This is possible because exchanges where you can purchase a cryptocurrency with FIAT have identification requirements to ensure that you’re not a criminal. I use a verified wallet here in the Philippines, so there’s a paper trail that originates with it.
In some cases, one could deduce the identity associated to a wallet based on other wallets that have sent cryptocurrency to it. While not every wallet holder will verify their identity on an exchange level, many will. And those people can be cross-referenced with social media sites like Facebook to fill in the blanks.
There are ways to circumvent this –never buy Bitcoin on an exchange, but instead buy it from anonymous strangers. Sites like LocalBitcoins or Bitcoin ATMs make this possible. And I am sure there are many other ways to shake up or launder Bitcoin around the web, however the process is incredibly complicated, and sooner or later mistakes will be made. IP addresses of devices can be used to discover the physical location of a user, and how the money enters or departs can be tracked.
Some might even argue that physical FIAT cash is more untraceable than cryptocurrency. All digital currencies leave a trail for interested parties to follow –and this is probably why the war on cash is real. I’d go as far as to say it isn’t about terrorism as they say –it’s about ensuring that every single transaction you make is one that’s taxable.
7. Bitcoin is Used by Criminals
Based on the previous points made, it’s safe to say that somewhere along the way, the end to end use of cryptocurrency and converting it into FIAT will raise a red flag if you’re under criminal investigation.
The anonymity of cryptocurrency is almost a lie –there are far more touch points with digital currency than there are with paper money. It’s not impossible to use it anonymously, it’s just increasingly difficult.
When used carefully, like FIAT, Bitcoin and other cryptocurrencies can be used for nefarious purposes. It doesn’t make all cryptocurrency bad, just as all FIAT is not tainted by those in the drug trade or contract killings. It’s a silly argument.
The same $20 bill that was used to hire a prostitute last week could very well be the same $20 you gave your son or daughter as lunch money this morning. (That’s also why it’s probably a great idea to teach them proper handwashing procedures after handling money).
If you’re using cryptocurrency the same way you use FIAT –as a law-abiding citizen of the world, you’ve got little to concern yourself with.
8. Cryptocurrency like Bitcoin Will Be Shut Down by the Government
They may regulate it or ask you to declare it, but Bitcoin isn’t going anywhere.
Cryptocurrency could be legislated into the shadows, but that would be a lost opportunity for governments keen to embrace (and tax) it. Bitcoin’s market cap is far too great. And when you force something into the shadows, it smolders, grows, and becomes harder to manage by these governments. It simply isn’t cost effective.
Centralized entities can be shuttered. Decentralized peer-to-peer networks or protocols can’t.
That’s why liquor prohibition didn’t work, Tor and Bit Torrent still thrive, and mesh networks are a powerful way to communicate with chat apps during an internet blackout. The cat is out of the bag, Pandora’s box is opened, and it can never be closed.
And to digress somewhat; blockchain advocates envision a world coming to a laptop near you where the next internet will live entirely on blockchains –free of those who try to regulate it or kill Net Neutrality. The blockchain isn’t just for cryptocurrency. It’s only getting started.
9. Merchants Don’t Accept Bitcoin
As we’ll mention in the cryptocurrency systems overview (course lesson), there are plenty of ways to easily buy or sell goods and services with cryptocurrency.
There are two ways to do this; merchants can either accept it as it is, or consumers can use prepaid debit cards tied to their cryptocurrency accounts to convert it into FIAT on the fly at current market rates to make a purchase online or in-store.
Smart merchants like Fiverr, Overstock, Dell, Microsoft and even Expedia already accept Bitcoin, and both Visa and Mastercard have partnered with businesses like Payza or Bitpay to offer their own pre-paid debit cards.
10. Cryptocurrencies like Bitcoin are Worthless
Currently the market capitalization of Bitcoin is $56,040,229,674 USD, and that will probably be a higher number by the time you read this. A single Bitcoin is currently on the market for $3397.68 USD. And that’s up quite a bit from a week ago –about $500 higher. It’s currently worth more than gold. Still think it’s worthless?
Subjective Theory of Value
When asked “Why does Bitcoin have value?” most people will struggle to answer the question and turn to libertarian speech or talk about it as a platform. Platforms are much easier to explain away. The Bitcoin Wiki points to the Subjective Theory of Value, which Wikipedia quotes Menger, C. Principles of Economics as follows;
“The subjective theory of value is a theory of value which advances the idea that the value of a good is not determined by any inherent property of the good, nor by the amount of labor necessary to produce the good, but instead value is determined by the importance an acting individual places on a good for the achievement of his desired ends.”
This doesn’t sit well with the average person, and I won’t use it as a way to describe why Bitcoin, or any other cryptocurrency has value. It’s too unrelatable, and it doesn’t simplify it enough.
From algorithmic trading and Decentralized Finance to navigating the US tax system with cryptocurrency investments, Ivan on Tech has you covered.Take a Course
Why Does Bitcoin Have Value?
The long and the short of why Bitcoin has value is simple; it is desired by human beings. Much like gold, and yet it can’t be melted down and turned into jewelry. But neither can paper money, and in the US it isn’t even paired with gold anymore. Like a coupon, or an IOU. It’s technically worthless.
And yet Bitcoin has intrinsic value. Much like a startup initial public offering (IPO), for instance –even if that startup isn’t profitable, people assign a value to a stock, sight unseen, based on a white paper or an idea and the capability of the people behind it. And that’s all fine and well among critics.
Bitcoin has value that is based on one of the strongest human conditions –faith. And we’ve applied the complex framework of the modern stock exchange to it, to legitimize it, and make it easily available to those who want to put their money where their mouth is.
Bitcoin doesn’t exist. So, where does that faith come from?
Probably from the same kind of faith that believes the current financial system is doomed. But like I said, there is no room for libertarian speech in this article.
Bitcoin and other altcoins also result in energy expenditures. It has a cost to uphold it. For some, that’s another explanation of value. As time goes on, more electricity and processing power will be required to process a transaction.
Not satisfied? That’s okay, I’m not satisfied with my own answer either. It still only scrapes the surface of how Bitcoin has any value and I’ll be damned if I simply quote Wikipedia or throw around the usual rhetoric and move on.
All digital currencies have benefits other currencies don’t and these benefits increase their value.
Things also have value, and some things retain that value well. Like gold, or Hermes bags, or Rolex watches. There are a certain number of these items in circulation (when not identifiable knock-offs) and if you really wanted to transfer money anonymously from one country to another (or launder it) you could buy a bunch of them –say, Rolex watches, wear them on a flight from one country to another, and sell them for another currency.
But that’s a lot of work, and it certainly isn’t instant. Bitcoin makes transferring millions of dollars across borders easy and cheaper than any other legitimate system that has existed before it. That increases its value and why people desire it.
As mentioned above, the market value of Bitcoin (and many other cryptocurrencies) is astronomical –and rising. It has mood swings. Public opinion shapes its value which creates wild swings in its value which create investment opportunities and make people money. These wild swings create profitable opportunities for investors.
Bitcoin is Social
Bitcoin isn’t some centralized financial modality thrust upon the masses by political and legal force –it’s chosen. It’s got a following –a community (hell, it’s cult-like). And as Steemit, an altcoin demonstrates, it can literally become a social network. And like I said, human beings place speculative value on its potential. Bitcoin has serious traction around the globe.
A Blockchain is More Than Currency
The blockchains that underpin cryptocurrencies are capable of far more than just underpinning cryptocurrencies, and people don’t just invest in them for money’s sake. They’re investing in the future.
It’s already possible to earn cryptocurrency for writing a blog post, making a video, lending idle cycles of your devices’ CPU to others, creating “smart contracts” that facilitate business processes, lending physical items or providing services, tracking physical assets in a supply chain, controlling or maintaining the internet of things (IOT), and much, much more.
Bitcoin is Limited
I already mentioned this, but there are only so many Bitcoins in circulation, and that number will cap off at 21 million. It has scarcity. Even the US greenback doesn’t have that, thanks to the Federal Reserve “Bank”.
Bitcoin Acts as a Currency
While Bitcoin may not be a recognized currency in every country, it can certainly act like one. Businesses now accept Bitcoin and other cryptocurrencies for goods and services. When you put this into practice, it’s as good as money. And it will be for the foreseeable future.
Bitcoin Makes Many Financial Services Obsolete
Money saved by using cryptocurrency adds value. Here’s where I get into the fun stuff –currency conversion fees, escrow fees, money transfer fees, point of sale purchasing fees, account creation fees, monthly banking fees –and so many more fees are either drastically reduced or non-existent. Take that, banks.
Bitcoin Defunds Wars
While you may not be able to escape taxes, and I say may –you can certainly cripple the existing banking system, the Petro Dollar, and the Federal Reserve Bank in one fell swoop. And no, this isn’t a libertarian speech.
The deflationary attribute of Bitcoin and other cryptocurrencies is a sword in the side of the world’s most insane “I can’t believe that even exists” organization in the world –the Federal Reserve Bank. For that one, I believe you should do some research because if you don’t understand what the Fed is or how it works, you should be ashamed of yourself (sincere apologies, but it’s true).
If you watch one thing all day, watch this.
Aside from that whole can of worms, banks fund wars. If the world is unsatisfactory to you, it’s safe to say that banks shaped the ugly parts.
I won’t digress further, it’s a slippery slope and I don’t want to wrinkle my tin foil hat –but news outlets from Business Insider to Zero Hedge (and countless others) have provided ample information to back up this point.
Ready to buy your first cryptocurrency? Sign up for Binance.
Cryptocurrencies are not a scam, and they are girding their strength to change the world as we know it. Anyone who disagrees with that fact should borrow my tin foil hat. I bought it with Bitcoin.
On the contrary, while I am dipping into the black –some also say that a global currency is the work of globalists –the “New World Order”. Think about it; a transparent, publicly accessible ledger that appeared magically by a pseudonymed person or team, whose identity is hotly debated, at the height of the war on physical cash.
It’s just food for thought. The benefits at this point seem to greatly outweigh any conspiracy theory. The choice is yours to make. I’m just trying to help you make the most informed decision you can.
Free Online Cryptocurrency CourseLearn about cryptocurrency at your own pace! We took a more conversational approach to explaining cryptocurrency, pointing out tools and resources as we go along, in context of real-world situations.
The articles below are listed in the order of our own learning experience, moving through the different layers of cryptocurrency adoption from understanding criticisms and myths to the wide range of technologies that underpin it.
We've continuously updated and expanded on each article over time to ensure relevance. The last content review was February, 2020.
If you have any thoughts on this particular article, I’d love to hear your thoughts in the comments at the bottom of the page. Thanks for reading.