> This is a contributed post by Bill Harris, former CEO of Intuit and founding CEO of PayPal and Personal Capital.
I was not in the least bit surprised that what followed this disclaimer was by and large the same tired anti-Bitcoin arguments we've all been reading since 2010. Not to mention the title is a gross exaggeration and undoubtedly fishing for angry clicks.
The worst part is there's a nugget of truth hidden amongst this FUD: the danger of ICOs and other varieties of altcoin scams. There's really no value being created when yet another coin is created that's just an existing coin with a new PoW algorithm stapled on, yet the creator stands to make tens of thousands off of his or her 2% premine, because of people speculating that this might be the Next Big Coin.
For this reason, I think the cryptocurrency market is definitely in a speculative bubble. But so what? So is Silicon Valley. Is a Wi-Fi enabled plant waterer really worth $30 million in VC funding? Probably not, but that doesn't mean the Dropboxes and the AirBnBs of the market aren't adding value. The abundance of worthless altcoins doesn't mean the cryptocurrency market as a whole is worthless, but it does mean you should be careful what you invest in.
> the same tired anti-Bitcoin arguments we've all been reading since 2010
Agreed. Sounds like he read an article from 2013, learned that Bitcoin isn't a physical coin, then immediately turned to the internet with his opinion.
I'll repeat the other argument we've heard since 2010. It's not about Bitcoin – it's about Blockchain technology. It's probably revolutionary. Still too early to really know.
> Is a Wi-Fi enabled plant waterer really worth $30 million in VC funding?
When a VC-funded startup fails, the impact is minimal on the man on the street. That's not the case when every dude with a computer and his uncle starts investing in ICOs (or when pension funds invest in collaterized debt obligations).
"This is a contributed post by Bill Harris, former CEO of Intuit and founding CEO of PayPal and Personal Capital.".
"Cryptocurrency is best-suited for one use: Criminal activity"
"... rest of article..."
When something is 100% in one (from the authors view negative) direction and no technical, economic, social future potential gets mentioned something seems not right. I should not even post this, don't feed the troll.
I'm not sure if "Criminal Activity" is the most descriptive name. But "gray market" activity such as pornography seems to be a big market for cryptocoins.
IIRC, PornHub is experimenting with a cryptocoin (not BTC, but something else) because they don't like being subject to Paypal's whims. They believe they're in the legal clear, but banks don't want to be associated with that kind of business. And thus, there's a growing need of some kind of financial instrument for this politically unsavory, but legal, product.
But yes, the primary benefit of Cryptocoin seems to be about avoiding the standard regulations and standard financial institutions. And yes, a big chunk of that (ie: SilkRoad) is about illegal-activities. In short: "Criminal Activity" is pushing the hyperbole too far, but the core concept seems to be a hack around the US's conventional financial system and protections.
I think you're right that this is one (early/first) use case, as it was during the beginnings of the internet. Also, one could argue "gray markets" is complementary to "free speech" or "censorship resistance" - which is indeed one of the core ideas of cryptocurrencies.
Diversification in the cryptocurrency space is a myth. As soon as Bitcoin goes down, everything else follows shortly after. E.g. 2 months ago: https://i.imgur.com/f1Vaybt.png
This article is correct on a lot of points, but is overall an uncharitable rehash of every tired argument against Bitcoin.
For example, while I acknowledge that Bitcoin could easily end up failing and producing nothing of lasting value, and that regular investors should be extremely cautious, that does not make it either a "scam" or a "pump-and-dump scheme".
No, Social Security payments (USA) is by far the greatest scam. Bitcoin is a spec of dust compared to the number of contributors that will receive nothing when the vault is empty.
> Social Security payments (USA) is by far the greatest scam. Bitcoin is a spec of dust compared to the number of contributors that will receive nothing when the vault is empty.
The only way people would recieve nothing is if both the trust fund was empty and there were no current SS revenues (which would mean no labor, including self-employment, income.)
So, yeah, that's possible if capital captures 100% of value, but that's both extraordinarily unlikely and has a rather trivial policy fix if things ever change so that it no longer seems improbable.
No, it does not, and can't, because the population curve is irrelevant; the error isn't about the projection of exhaustion (which may also be wrong, but it is the current intermediate-scenario projection), it's about the basics of how SS works at what trust fund exhaustion means.
If the trust fund is exhausted (which the population curve does say something about), beneficiaries don't get nothing, they get benefits limited by current SS revenue.
There is no projection i am aware of under which people working today would not get a majority of their benefits.
Yeah and the 2008 bailout of finance firms was not a scam... Then the Fed creating money out of thin air and using it to buy up toxic assets from these very same finance firms (aka 'quantitative easing') is not a scam either...
Also I find it highly suspicious that they don't teach this in schools. Money is one of the most important things to mankind and yet schools don't teach is anything about where it comes from... When people finish school, they know a lot about sport, art, philosophy and even religion but they know almost nothing about money (except how to count it).
Sometimes I feel like both Bitcoin naysayers and Bitcoin aficionados are missing the big story with Bitcoin:
Bitcoin represents the breakdown in trust. Trust in institutions, trust in government, trust in the financial system, trust in currency, and trust in fellow humans.
One of the great goals of the Internet was to shed a light on all the forms of corruption and abuse that people in power were perpetuating. Back in our naivete of the late 90s and early 00s, we thought that meant that people would then fix those problems. Instead, many of the problems have been largely unfixable. People in power tend to hold on to power pretty tightly, and once thwarted a half dozen times or so, people tend to declare the whole system rotten to the core and unredeemable. (All except the winners, who are often the most blind to the threat to the system itself.)
Couple that with many of the Internet giants adopting business models involving psychological manipulation and a wholesale attack on the idea of a shared reality itself, and instead of people taking targeted action to fix the problems of corruption and abuse of power, they choose to opt out of the system itself. Bitcoin & other cryptocurrencies are the ultimate in "exit" strategies - if you feel like you will never get a fair cut of wealth in the current fiat economy, well, start a whole new economy where you hold all the tokens.
Bitcoin proponents correctly point out that if Bitcoin is a scam, so is money itself, but then miss the part where money is a useful scam, one which has allowed people to trade peacefully for millenia.
It's unlikely that the result will be a new crypto-utopia. Already we see the same problems with corruption and abuse of power showing up in most coin ecosystems, but worse than with mainstream institutions, which at least have developed checks & balances to catch the worst abuses. Instead, we're likely to see extreme fragmentation and conflict, more like a dystopian sci-fi novel than a utopia.
> if you feel like you will never get a fair cut of wealth in the current fiat economy, well, start a whole new economy where you hold all the tokens.
wait, so crypto is the foundation of the failboy economy? Clean your room and hodl? I... I understand everything now. ascends into the clouds in a blaze of enlightenment
Agreed, there is no real intrinsic value behind fiat money; old people who have a lot of fiat money essentially get paid to sit around all day doing nothing; they're not actually offering any real service to society so why should we value their currency?
At least cryptocurrency people are contributing though open source work. You'd be surprised how many general purpose open source projects are sponsored by crypto companies.
Wait, what? The second old people are no longer working their savings should immediately be devalued?
There is some rich irony in calling out the lazy old people sitting on fiat when easily 99.9% of "cryptocurrency people" are sitting around HODLing while they wait for their COINZ to MOON. If contribution is your value argument, at least make a modicum of effort to list some of the great open source work contributed by the cryptocurrency people. It seems that most of the "work" is either minimum effort ICO garbage meant to enrich the principals or is blockchain-for-the-sake-of-blockchain to get a marketing boost off the hype.
Hey guys let's just all agree to use govt controlled money through govt approved mediums.
Just accept inflation and quantitative easing as the way things are, any alternative is just a scam.
The Federal Reserve can self regulate, the people there all have good intentions and are very concerned that all your hard work isn't diluted by inflation.
These are the same tired arguments that have been brought many times before in the previous few years. What's the point of an article like this that contributes nothing to the discourse?
> It’s the job of the SEC and other regulators to protect ordinary investors from misleading and fraudulent schemes. It’s time we gave them the legislative authority to do their job.
Ah, I see, it looks like he's trying to drum up support for regulations that would help the banking-industrial complex that he's a part of.
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."
The first line of the paper says: Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments.
Aside from the technical solution proposed in the paper, the points related to "trusted third parties" and "financial institutions" are key. This is a product designed to circumvent institutions. It would most probably not be received well by the institutions. There is too much philosophy, religion, politics, and drama around Bitcoin - and is a great vehicle for all human folly to be on display - greed, fear, prestige, cultism and so on and so forth. Of course, No one really knows how this experimental product will play out but it is intellectually engaging and largely serves the function it was designed for.
It is fascinating to read critiques of this product (esp unsubstantive ones). There is no CEO, Customer Service, Executives, Managers etc that are really listening - unlike say, criticizing a company like Uber or Comcast. Therefore, most of the feedback just goes...nowhere and is just echoed amongst "people" (Echo chamber?). The inventor's mystique and politics further add to the cult-like qualities of this product - probably cognitive dissonance - because we have never seen a product launched like this ever before. As an author of these type of posts, one must really focus and ask what do they want to achieve. If they are warning the public about avoiding speculation (which is good motivation) then they need to make much better arguments.
This article is lazy. I would even generalize and say that this constant "thought leadership" around Bitcoin is one of the most tiring things about Bitcoin - with people doing it for themselves and not really making good deep arguments for furthering everyone's understanding.
It is tiring because all the points have been made - there is no new original thought (which would be great to discuss, actually). Bitcoin is an experiment. It is a pretty decent product, with some downsides (like inefficiency) for being "like money". Like a mycelium network [1] or Facebook, it spreads largely on its own. In some respects, Bitcoin is an amazing product.
Maybe we let the experiment play out. We will see what happens. What is playing out is truly fascinating :)
It would be great to see some new points being made so one can have an interesting discussion.
Well there's always Nassem Taleb's view of bitcoin which some might find worthwhile, particularly because he's a known skeptic of things generally. [1]
Okay, sure. Along with everything else. Things can be useful, and they can have moral value, but the whole concept of value relies on someone doing a valuation. Nothing has value in and of itself without someone valuing it. Bitcoin obviously has value (whether that value is founded on usefulness or not), because we see people valuing it... and contrary to the author's statements, it's not all Greater-Fool speculation, etc., even if you don't agree with the reasons they're valuing it.
43 comments
[ 2.9 ms ] story [ 102 ms ] threadI was not in the least bit surprised that what followed this disclaimer was by and large the same tired anti-Bitcoin arguments we've all been reading since 2010. Not to mention the title is a gross exaggeration and undoubtedly fishing for angry clicks.
The worst part is there's a nugget of truth hidden amongst this FUD: the danger of ICOs and other varieties of altcoin scams. There's really no value being created when yet another coin is created that's just an existing coin with a new PoW algorithm stapled on, yet the creator stands to make tens of thousands off of his or her 2% premine, because of people speculating that this might be the Next Big Coin.
For this reason, I think the cryptocurrency market is definitely in a speculative bubble. But so what? So is Silicon Valley. Is a Wi-Fi enabled plant waterer really worth $30 million in VC funding? Probably not, but that doesn't mean the Dropboxes and the AirBnBs of the market aren't adding value. The abundance of worthless altcoins doesn't mean the cryptocurrency market as a whole is worthless, but it does mean you should be careful what you invest in.
Agreed. Sounds like he read an article from 2013, learned that Bitcoin isn't a physical coin, then immediately turned to the internet with his opinion.
I'll repeat the other argument we've heard since 2010. It's not about Bitcoin – it's about Blockchain technology. It's probably revolutionary. Still too early to really know.
That doesn't mean his points aren't valid. There's no membership required to make anti-bitcoin arguments.
> Not to mention the title is a gross exaggeration and undoubtedly fishing for angry clicks.
I think that title accurately matches his points. And you even admit there's a "nugget of truth" in his post.
"Cryptocurrency is best-suited for one use: Criminal activity"
"... rest of article..."
When something is 100% in one (from the authors view negative) direction and no technical, economic, social future potential gets mentioned something seems not right. I should not even post this, don't feed the troll.
IIRC, PornHub is experimenting with a cryptocoin (not BTC, but something else) because they don't like being subject to Paypal's whims. They believe they're in the legal clear, but banks don't want to be associated with that kind of business. And thus, there's a growing need of some kind of financial instrument for this politically unsavory, but legal, product.
But yes, the primary benefit of Cryptocoin seems to be about avoiding the standard regulations and standard financial institutions. And yes, a big chunk of that (ie: SilkRoad) is about illegal-activities. In short: "Criminal Activity" is pushing the hyperbole too far, but the core concept seems to be a hack around the US's conventional financial system and protections.
dumb question: why would anyone “invest” in an ICO?
For example, while I acknowledge that Bitcoin could easily end up failing and producing nothing of lasting value, and that regular investors should be extremely cautious, that does not make it either a "scam" or a "pump-and-dump scheme".
I mean, at the very least, at this point one must be gracious and grant to BitCoin its success in being pump-and-dump schemes, plural.
Now, excuse me, I'm off to found an autonomous corporation to compete in the burgeoning field of PnDSaaS, a truly 21st century sort of organization.
Edit: grammar
[1]https://www.usatoday.com/story/money/personalfinance/retirem...
The only way people would recieve nothing is if both the trust fund was empty and there were no current SS revenues (which would mean no labor, including self-employment, income.)
So, yeah, that's possible if capital captures 100% of value, but that's both extraordinarily unlikely and has a rather trivial policy fix if things ever change so that it no longer seems improbable.
If the trust fund is exhausted (which the population curve does say something about), beneficiaries don't get nothing, they get benefits limited by current SS revenue.
There is no projection i am aware of under which people working today would not get a majority of their benefits.
Also I find it highly suspicious that they don't teach this in schools. Money is one of the most important things to mankind and yet schools don't teach is anything about where it comes from... When people finish school, they know a lot about sport, art, philosophy and even religion but they know almost nothing about money (except how to count it).
Bitcoin represents the breakdown in trust. Trust in institutions, trust in government, trust in the financial system, trust in currency, and trust in fellow humans.
One of the great goals of the Internet was to shed a light on all the forms of corruption and abuse that people in power were perpetuating. Back in our naivete of the late 90s and early 00s, we thought that meant that people would then fix those problems. Instead, many of the problems have been largely unfixable. People in power tend to hold on to power pretty tightly, and once thwarted a half dozen times or so, people tend to declare the whole system rotten to the core and unredeemable. (All except the winners, who are often the most blind to the threat to the system itself.)
Couple that with many of the Internet giants adopting business models involving psychological manipulation and a wholesale attack on the idea of a shared reality itself, and instead of people taking targeted action to fix the problems of corruption and abuse of power, they choose to opt out of the system itself. Bitcoin & other cryptocurrencies are the ultimate in "exit" strategies - if you feel like you will never get a fair cut of wealth in the current fiat economy, well, start a whole new economy where you hold all the tokens. Bitcoin proponents correctly point out that if Bitcoin is a scam, so is money itself, but then miss the part where money is a useful scam, one which has allowed people to trade peacefully for millenia.
It's unlikely that the result will be a new crypto-utopia. Already we see the same problems with corruption and abuse of power showing up in most coin ecosystems, but worse than with mainstream institutions, which at least have developed checks & balances to catch the worst abuses. Instead, we're likely to see extreme fragmentation and conflict, more like a dystopian sci-fi novel than a utopia.
If I had to guess, I'd say that the number of people who really believe that is pretty close to the number of conspiracy theorists.
wait, so crypto is the foundation of the failboy economy? Clean your room and hodl? I... I understand everything now. ascends into the clouds in a blaze of enlightenment
At least cryptocurrency people are contributing though open source work. You'd be surprised how many general purpose open source projects are sponsored by crypto companies.
There is some rich irony in calling out the lazy old people sitting on fiat when easily 99.9% of "cryptocurrency people" are sitting around HODLing while they wait for their COINZ to MOON. If contribution is your value argument, at least make a modicum of effort to list some of the great open source work contributed by the cryptocurrency people. It seems that most of the "work" is either minimum effort ICO garbage meant to enrich the principals or is blockchain-for-the-sake-of-blockchain to get a marketing boost off the hype.
Just accept inflation and quantitative easing as the way things are, any alternative is just a scam.
The Federal Reserve can self regulate, the people there all have good intentions and are very concerned that all your hard work isn't diluted by inflation.
> It’s the job of the SEC and other regulators to protect ordinary investors from misleading and fraudulent schemes. It’s time we gave them the legislative authority to do their job.
Ah, I see, it looks like he's trying to drum up support for regulations that would help the banking-industrial complex that he's a part of.
What's so hard to understand about Bitcoin as an alternative to fiat currencies?
Yes, its real, its a store of value, and you can use it for payment if the seller is willing to accept Bitcoin.
And yes giving your private keys to some offshore exchange or invest all your money into some dubious altcoin is probably a bad idea.
Doesn't change the fact that Bitcoin's promise is very simple and clear and no part of this is a scam.
- Abstract from https://bitcoin.org/bitcoin.pdf
The first line of the paper says: Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments.
Aside from the technical solution proposed in the paper, the points related to "trusted third parties" and "financial institutions" are key. This is a product designed to circumvent institutions. It would most probably not be received well by the institutions. There is too much philosophy, religion, politics, and drama around Bitcoin - and is a great vehicle for all human folly to be on display - greed, fear, prestige, cultism and so on and so forth. Of course, No one really knows how this experimental product will play out but it is intellectually engaging and largely serves the function it was designed for.
It is fascinating to read critiques of this product (esp unsubstantive ones). There is no CEO, Customer Service, Executives, Managers etc that are really listening - unlike say, criticizing a company like Uber or Comcast. Therefore, most of the feedback just goes...nowhere and is just echoed amongst "people" (Echo chamber?). The inventor's mystique and politics further add to the cult-like qualities of this product - probably cognitive dissonance - because we have never seen a product launched like this ever before. As an author of these type of posts, one must really focus and ask what do they want to achieve. If they are warning the public about avoiding speculation (which is good motivation) then they need to make much better arguments.
This article is lazy. I would even generalize and say that this constant "thought leadership" around Bitcoin is one of the most tiring things about Bitcoin - with people doing it for themselves and not really making good deep arguments for furthering everyone's understanding.
It is tiring because all the points have been made - there is no new original thought (which would be great to discuss, actually). Bitcoin is an experiment. It is a pretty decent product, with some downsides (like inefficiency) for being "like money". Like a mycelium network [1] or Facebook, it spreads largely on its own. In some respects, Bitcoin is an amazing product.
Maybe we let the experiment play out. We will see what happens. What is playing out is truly fascinating :)
It would be great to see some new points being made so one can have an interesting discussion.
[1] http://www.bbc.com/earth/story/20141114-the-biggest-organism...
[1] https://medium.com/opacity/bitcoin-1537e616a074
"A bitcoin has no intrinsic value."
Okay, sure. Along with everything else. Things can be useful, and they can have moral value, but the whole concept of value relies on someone doing a valuation. Nothing has value in and of itself without someone valuing it. Bitcoin obviously has value (whether that value is founded on usefulness or not), because we see people valuing it... and contrary to the author's statements, it's not all Greater-Fool speculation, etc., even if you don't agree with the reasons they're valuing it.
This is a good read. Basically this guy spent around 20 working days as "PayPal founding CEO" before he got figured out :D :D :D :D