As British Prime Minister Benjamin Disraeli once averred, there are three kinds of lies: lies, damned lies, and statistics. Bitcoin is frequently on the receiving end of them all, whether it’s exaggerated statistics about energy consumption or damned lies conflating it with terrorism. We’ve rounded up 10 of the most pervasive mistruths and endeavored to set the record straight. The next time someone brings one up, send them here.
Also read: Dutch Columnist: Bitcoin Destabilizes the Economy and Undermines Banks
We’ll start with the most asinine assertion, although all of the entries in this list are pretty dumb. You know what funds terrorism? Terrorists and terrorist sympathisers. If you want to blame a currency though, try the U.S. dollar which has been used to fund more wars, proxy wars, bombings, hijackings, and insurgencies than any other.
Yaya Fanusie of the Center on Sanctions and Illicit Finance had this to say:
[There] are examples of terrorists using virtual currencies, but probably are not indicative of a major push. Right now, virtual currencies are harder to acquire and spend than, say, prepaid cards, or the most anonymous way to fund terrorism – cash. And most terrorists operate in a world where fiat, or government-backed, currency is needed for their expenditures, so a virtual currency where one has to figure out how to cash out without tipping off authorities only complicates a funding scheme.
Where do we even start with this one? No, bitcoin is not a bubble. It’s not going to come crashing down to earth and it’s certainly not going to return to zero. We’ve long passed the point of no return for that to happen. That won’t stop the B-word being trotted out every time bitcoin gains or sheds another $2,000 however. There will be corrections along the way – no asset in history has ever ascended in a straight line – but bitcoin is not about to pop. It wasn’t a bubble at $3,000, it’s not a bubble at $11,000, and it still won’t be next week after a dozen more op-eds have posed this question.
For those who don’t relish risk, there are certainly less exciting assets to invest in. Nevertheless, the notion that bitcoin is volatile and needs to be “tamed” is misguided. Hugely respected crypto assets expert Chris Burniske broke this down in a recent slidedeck, showing that bitcoin’s volatility is now lower than Twitter stock. There are still roller-coaster days, but for the most part the digital currency is blissfully calm.
If you’re not familiar with the much-cited case of tulip mania which swept 17th century Holland, your search engine of choice will furnish you with the backstory. The craze culminated in the price of a particular bulb reaching 4,600 florins. From there, the only way was down.
It turns out that tulips lack any sort of intrinsic value and make a rubbish commodity, just like seashells and pretty stones. Bitcoins, on the other hand, are easy to divide, imperishable, transportable and scarcer than tulips.
We could launch into a lengthy explanation as to why it’s ridiculous to blame a currency for the actions of a tiny subset of its users, but sometimes the simplest responses are best:
That claim might have been true in 2013, but today the vast majority of bitcoin transactions are for legitimate purposes. Chris Burniske also provided further evidence of this in his slidedeck which was cited earlier. Still, that won’t stop benighted hacks from the mainstream media trotting out this old chestnut whenever they can, usually accompanied by some variation of this image:
A Ponzi or pyramid scheme involves older investors being paid back through the capital from new investors, until eventually the racket becomes unsustainable and the whole thing collapses on itself. The workings of bitcoin are completely transparent and its adoption and growth cannot be controlled by anyone. The price of bitcoin is determined solely by what the market is willing to pay for it, not by a necessity to pay back previous investors. Bitcoin is certainly not a pyramid scheme. Bitconnect, on the other hand…
Bitcoin exchanges and cloud-based wallets can theoretically be hacked, just like anything else connected to the internet. The underlying code powering the bitcoin blockchain cannot be hacked however. Bitcoin has been stress-tested more thoroughly than possibly any other piece of code ever written. If you’re worried about having your coins stolen, take our advice and use a wallet which you own the keys to rather than trusting a third party.
You know what else was a fad? The internet and cell phones.
10. Bitcoin Uses Exorbitant Amounts of Energy
To invoke an apposite quote, a lie can travel halfway around the world before the truth can get its boots on. The next time fake news defames your favorite digital currency, drop in this link and set the record straight. Bitcoin is many things but it’s none of the above.
What other bitcoin lies should have made this list? Let us know in the comments section below.
Images courtesy of Shutterstock, and Chris Burniske.
Keep track of the bitcoin exchange rate in real-time.
This article has been updated to correct the units used to measure annual energy consumption, which should be TWh.
The post 10 of the Biggest Lies Told About Bitcoin appeared first on Bitcoin News.
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…
Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a…