First of all: Happy New Year and a great 2015 to all! We will be kicking off the New Year with a special little article about a “report” from the people over at Bloomberg who claim that Bitcoin was the worst currency in 2014.
The article, full of bile angry and small minded conclusions, is full of mistakes. This is something that a writer at Bloomberg since 1991 shouldn’t be doing since it is a rookie mistake ( but then being paid to trash Bitcoin and digital currency with the purpose of holding its price low so every fat cat can climb on is a new fad these days). However I do not expect anything intelligent from people that insinuate that “the credit card users’ debt is their fault because they are greedy”. Whenever I hear these kinds of responses it makes me chuckle because those guys and girls only think in black or white certainties. Grey or shades of grey, which mean a variety of situations, don’t come into their mind, which is sad, and we should pity their limited cognitive processes.
Let’s take a look at this “article”. Mr. Mark Gilbert begins by stating “facts”. The BTC price hasn’t gone to 1130$ in 2014 as he claims but according to Bitstamp, one of the leading exchanges out there, the BTC price was 919$. Just go to the Bitstamp website and you will see. If you want adequate numbers you need to do better research because every exchange has a difference in BTC price. If said “man” has used Coindesk BTC prices, well that is a bad move since Coindesk isn’t an exchange and it is hard to verify where exactly their numbers come from. It is like doing research and only using tertiary information that people wrote about and not actually looking at the source material.
Some might point out that “this is another sign of the scam/Ponzi whatever scheme”. However different prices of THE SAME Company are also found in the real world if we look at the stock exchanges. For example the Belgian company Delhaize. Their stocks are on the NYSE and the BEL20 and both are the same company, though their stock prices are much different. Are those also a scam? I don’t think calling a Belgian company that is over 148 year old and still growing on a world scale a scam. Well some less intelligent people might but hey that is their opinion.
“Bitcoin claims to provide Web buccaneers with a secure store of value free from the risk of government confiscation or interventionist devaluation, making it the currency of choice for old-fashioned money-launderers and modern-day snake-oil salesmen”(located just below that fabricated graphic in the aforementioned article). This is just a completelie because of the following evidence. On a quick note this evidence will be quantifiable, accessible and REAL, not like the fabricated BS that Mr.Gilbert tries to peddle of as “THE TRUTH”.
Bitcoin isn’t a scam because:
· Less corruption: because of the decentralised nature of Bitcoin it is very hard to be influenced by corruption. There is no central institute that can be infected. Yes there is something like “representatives“ of bitcoin, but then there are a whole group of Bitcoin enthusiasts that have banded together to from groups. Even in a runt of a country like Belgium, we have the Belgian Bitcoin Association, which is registered and on good terms with the Belgian government. Nevertheless, Bitcoin is a coin by the people for the people so to speak.
· Absolutely no Scam: If Bitcoin is such a scam, why then are tech guru’s like a Bill Gates, other Venture Capitalists, charity organisations like the Red Cross, international banks,etc. so interested in Bitcoin and Bitcoin technology? Why would they even go on tv and media proclaiming their beliefs about Bitcoin as being “not a scam”? Well Mr. Gilbert what are you going to say next or are you going to insinuate that these people “haven’t got a clue what they are talking about”? I hope that you aren’t that arrogant, but seeing you labelled everyone that has “debt” as “it’s their own fault and good riddance”, I’m not too sure.
· Huge volatility: Yes that part is kind of true but bankers/traders love the volatility of stocks. That is where they make the big money. Let’s not pretend that volatility is an “exclusive digital currency problem”. When I started day trading on the stock exchanges I bought, along with some friends, a stock called Lernout and Hauspie, which were one of the most technically advanced speech software company out there.
I bought shares of that company from the beginning. It rose from around the 0.5Euros to 140Euros. Then they split it up which meant that every owner that has stocks will see them double (so if you had 15000 you get 30 000). So they “reset” the price and started again from around the 1 euro mark which rose to 41 euros in no time. Everyone, including Bloomberg and all the other big fat cats on Wall Street were saying “YES invest in that Belgian company”.
However I felt something was up and I dumped every stock/ share I had. That was a smart move because the company stocks plummeted. Some say it was a CIA plot to bankrupt a non US great company ( since speech recognition is one of the key instruments to identify and hunt down potential terrorists). It is also noteworthy that every single developer ,programmer, and IT specialist at L&H received job offers from the US. Suffice to say that I have had made a lot of profit. This is just one example of many about stock and volatility. There is also the commodity market where they are gambling on food products, water, precious metals, etc.
· Bitcoin is just a coin/currency/company: again this is wrong. Bitcoin is a currency and it is linked with every company that is Bitcoin based, in a sense at least. Bitcoin is more than just a currency or “just a stock/share” thing. It is a true “currency” that I call a “world currency without restrictions”. Anyone can use it around the world and it can be exchanged to local currency. It is new because a “global currency” hasn’t been available yet, at least in a sense that Bitcoin has. Some might point to the US dollar, EU or Yuan but these aren’t currencies that you can send to your struggling friend in Zambia (because of a persisting drought) for example, unless you’re prepared to: wait a long while for it arrives, be prepared to pay high fees, etc. All you need with Bitcoin is: connection to internet, a bitcoin wallet, your friends Bitcoin wallet address and you are all set. When using Bitcoin there are no extra fees (unless you use escrow but between friends I find it a bit useless), its fast and your struggling friend will receive funds needed. Bitcoin is: easy, cheap to use, no extra fees, extremely fa
st (especially when you are comparing it to other currency transfer systems).
· Bitcoin is used by dodgy criminal bad guys: This again makes me laugh. It is the same old record that is being played from all the years before and gosh what a shocker, no evidence is given on the how or why (only “the price volatility” with some laughable graphic that counts as “evidence” with unverifiable data or work method). Go and talk to the Bitcoin community and educate yourself. There are people out there that lost their job, because of the banksters ( and their so called financial experts) speculation, and were only able to stave off repossession of their house and belongings because of Bitcoin. They day traded bitcoin, some even piecemealed a string of different BTC jobs together to make ends meet, some even schooled themselves as developer and are making way more money now than before, others got enough funds together to create their own company, etc.
There are some other insinuations in there but I won’t be getting into them because they are the same old “I say that Bitcoin is bad because it is” without fact based evidence. Yes we might consider Bitcoin as a new/emerging invention. With everything new there is a lot of shouting and screaming by crazed people that do not know what: 1) technology /new product is ( or are too lazy to do some real research), 2) How the new product(s) work, 3) are being paid to trash a new invention/product/innovation movement in such a way to bamboozle ordinary people that haven’t gotten a clue what the new technology /innovation would mean, etc.
It happened with speech technology when it reached the ears of the general public. From financial “experts” to Jack and Jane average had an opinion on it. “it is bad, it will never work, it is a scam” and other critics were heard. Nowadays speech software is being used by secret service and by yours truly when he is dictating this article using a speech program. Hey I broached to subject so why not use the technology that is available (and my keyboard is dying on me). I also wrote/dictated my 260 pages thesis using this program, called Dragon Naturally Speaking, so it really works great (look at the youtube clip in the references).
The same thing that has happened with everything “new” and “revolutionary/evolutionary”, like speech recognition software, can be extrapolated to Bitcoin and the “naysayer camp”. It is always the same song, but a different tune depending on which innovative product/idea they are bashing.
If you want to talk all business, ok no problem here are some “all business signals”: 1) Bill Gates is calling Bitcoin and the Bitcoin tech quite innovative, 2) a wide range of government official and newspapers as the FED revised their vision on Bitcoin as “not as disruptive as previously thought… and that it could be innovative”, 3) some banks openly declared that they are looking toward Bitcoin and bitcoin technology 4) Fidor bank is actually is allowing Bitcoin transaction to take place in their financial eco system, 5) No scammers would ever organise a St-Petersburg Bitcoin Bowl and help generates extra stimulus for the local economy, 6) has better security than credit cards, 7) credit card companies are running scared as evidenced by the recent rant video’s against Bitcoin, 8) FED members that are consulting Bitcoin companies, 9) etc.
So is Bitcoin the “holy grail” for everything? No of course not and Bitcoin does have some problems but it is way better than current systems in place. The banking world is realising this also because innovation in banking sector has been stagnant. Now I think, like many others, that the Bitcoin price is held low artificially. This is being done to let more people get to know Bitcoin at a lower price. At a certain point in time, or maybe when the next financial crisis hits which might be very soon, the BTC price will shoot up once again.
Still if those “righteous” and “protectors of the common folk” financial people want to begin a crusade against Bitcoin they should first look into the modus operandi of banks and credit cards. I included 2 links in the references that shows some ugly practices. I know for a fact that an existing business owner that wants to expand and has great ideas and structurally sound plans and everything in between but misses a key piece of finance will have a hard time getting a loan from a bank. But people that are already in debt can get more loans, credit cards etc. If these self-proclaimed “righteous” people, though I call them hypocrites, want to tackle something they should focus in on the glib sales tactics, the persuasive tactics of “bank sales men and women”. However most of these people are on the payroll of the banks and credit card companies anyway so they won’t bite the hand that feeds them.
One of the biggest lessons I’ve learned during my day trading adventures is that you can’t trust the banks at all. If they say “no” it means “yes”, especially when dealing with investments/stocks/shares. If we link it back to the whole Bitcoin situation, though for some it reads like a full blown hysteria, we see the exact same tactics; trying to dissuade people from getting in on Bitcoin while behind the curtains the wealthy are getting ready for another big buy-in. The future is terra incognita but I think 2015 will be interesting to say the least.