From bankers to academics, Bitcoin has always attracted a loud crowd of naysayers. While most of the skeptics have gradually changed their tune, there’s one singing the same old tale. This offender is NY Post’s John Crudele.
In a post published on NY Post on Wednesday, he says that Bitcoin may soon be worth nothing. But as is his habit, the post doesn’t comprise of valid arguments or analysis, but mere name-calling and blabbering.
Crudele begins by expressing his disappointment that the “fake currency” called Bitcoin isn’t dead yet — despite of his wishful thinking. But he still hasn’t given up on his prediction that Bitcoin is headed for “a value of zilch” soon. This is his whole rationale:
Bitcoin’s price rallied to over $6,600 yesterday, but it had been well under $6,000 last week. Even at $6,600, bitcoin is still worth 70 percent less than it was at the beginning of the year. I use the term “worth” cautiously because bitcoin is really worth nothing since it’s backed by nothing or no one. It’s a confidence game that has value only because people are convincing other people that it’s worth something. Got it! Ponzi scheme. Confidence game. Fraud.
Crudele may be citing the drop in price of Bitcoin for his doom prediction because it’s convenient. But it is worth noting that even after this drop, Bitcoin’s price is still 13 times more than what it was when Crudele last predicted the Bitcoin doom in 2014 ($500 approximately). That doesn’t seem to be a sign of a sign of its imminent death.
“It’s backed by nothing or no one” has been the central argument of Crudele pretty much ever since. In all these years, he clearly hasn’t bothered to learn about how Bitcoin works.
Bitcoin is not backed by “nothing or no one,” John. The entire idea of Bitcoin is that there is no need for a central authority to have the currency function. It is backed by this thing called ‘blockchain technology.’
Since you clearly don’t know, let me try and explain. The technology backing Bitcoin ensures that all records of the money being exchanged between people is recorded on a permanent ledger. No one can temper with this ledger. That’s why it is said to be immutable. Also there’re actual people involved as well. These are called miners and their role is to verify the transactions in the blockchain. These people, however, don’t have the power to manipulate the transactions in any way. Unless there’s a 51 percent attack, but that’s a different scenario, and you aren’t smart enough to understand it. If you want to learn more about how blockchain backs Bitcoin, there’re some good resources here – not that I expect you would actually bother to peruse them.
As far as it being a “confidence game” or “worth only because people are convincing other people that it’s worth something,” have you taken any economics classes lately? Because that’s how all money works — literally all of it. If this concept is alien to you, I have a reading recommendation — Adam Smith’s Wealth of Nations. The book was first published more than 200 years ago, because that’s how long people have been aware of this concept.
But given that you haven’t bothered to read about the basics of Bitcoin in four years, I am not sure how willing you would be to read a book. So, here’s a funny video explaining the concept of how assets come to take the value they take (tl;dw — they get convinced by other people):
I have given it a try, but I have a feeling that my explanations will just go futile. People with better knowledge of cryptocurrencies than me have tried to explain the concept to Crudele, and failed.
Bitcoin developer Jameson Lopp tried to do it back in 2014. Crudele, obviously, resorted to the same blabber he has come to be most well-known for.
I had no expectation of convincing John; I consider this a win b/c some NYPost readers may visit http://t.co/9yiK2sKdTc & educate themselves
— Jameson Lopp (@lopp) July 27, 2014
It is worth noting that Crudele took a dig at Dell and Massachusetts Institute of Technology (MIT) being the only two popular organizations acknowledging Bitcoin at the time. An overwhelming number of governments and organizations all across the globe have since adopted cryptocurrencies and blockchain technology.
People who don’t want a government or central bank to have more control over their money than they do — or want to explore alternative means of exchange for whatever reasons they deem fit — use Bitcoin. They bring the value, and there’s nothing wrong with it. If all the readers of NY Post were to suddenly stop believing that it offers any content of value — it will be worth zilch as well. That’s how the world works.
As far as Bitcoin is concerned, it is not going anywhere, anytime soon.
Published July 5, 2018 — 15:25 UTC