Bitcoin fans say it's the best thing ever. Bitcoin haters say it's a lot of geeky hype. I've been described as a Bitcoin hater and I guess, for the most part, I agree. But this isn't unchecked hate just for the sake of hating something, I just don't see the point of it, Bitcoin that is, not hate.
If you think about it, traditional dollars, are just as digital and anonymous as any digital currency. On the anonymous front, if I toss a $10 bill into a Fireman's boot during one of his annual fundraisers while waiting at a traffic light, that's pretty darn anonymous.
When I hand some panhandler a fiver on the street, that's anonymous. A guy rolling up to a crack dealer on the corner and trading a $20 bill for a tiny bag o' crack is anonymous. What more can you ask?
As for digital, most of my payments go directly into my bank account via automated clearing house (ACH) or direct deposit. My wife pays our bills online. I buy apps, music, and Amazon.com goodies online with no apparent money, except digital, exchanging hands. I authorize the payment, they say they get it, I get my stuff and we're all happy. To me, those dollars are virtual. I never saw them go into my bank account and I never saw them go out—except for the changing balances. All digital. Very easy. All legal. Everybody's happy.
Now, let's look at Bitcoin.
You spend dollars to buy Bitcoins so that you can buy stuff with Bitcoins. Can't you just buy stuff with dollars? Or Marks? Or Francs? Or whatever currency it is that you use?
It seems to me that the whole Bitcoin phenomenon is like Stilgherrian* said in his post: Bitcoin: More ideology than trustworthy currency.
The ideologies and my responses:
- Distributed currency - Who cares? What's the real advantage to that?
- No government or bank controls it - OK. Again, so what?
- Transactions are anonymous - Not true at all but why should that matter unless you're doing something that requires anonymity**? Use cash instead.
There's just no legitimate reason for using Bitcoins. There's no advantage to it. There are many disadvantages. One is that Interpol, the FBI, and others are watching very closely. Anything done on a peer-to-peer network is suspect. Exchanging Bitcoins, drugs, porn, music, whatever it is—there's a good reason why people desire to keep it "secret" and between like-minded peers.
After all that, here's what I really think of Bitcoin and the whole Bitcoin frenzy:
- Bitcoin was an experiment—an anonymously created project and that's all.
- Bitcoin is interesting from a purely esoteric point-of-view not a practical one.
- People will fall for just about anything that they think is anti-government.
- People will fall for just about anything.
- Just about anything can be used as currency.
- Being distributed is no advantage.
- Being P2P is no advantage.
- Not being controlled by a bank or government is no advantage.
- Bitcoins are susceptible to theft and hacking.
- Bitcoin transactions are not anonymous.
- It's mostly hype and ideology.
- The hype is derived from a clever marketing plan perpetrated to artificially raise the value of something that has no value.
- Is more akin to cigarettes in prison rather than a real world currency.
- Just because people are jumping on the bandwagon doesn't make it something you should get involved with***.
- It's OK with me if people use Bitcoin, however, don't try to pay me with it.
- I don't care if there are Bitcoin vending machines. Cigarettes used to be sold in vending machines too.
- The perceived value is too volatile for a real currency.
- Bitcoin is a bad name. It should have been Bitbucks or Bitbux. Bad call.
- Just because you like it, doesn't mean anyone else has to. I don't like bubble tea either, so what.
- In ten years, Bitcoin will be one of the things you laugh about.
- If you have to purchase a currency in order to buy stuff that you can buy anyway, there's something screwy about that.
I'm willing to discuss Bitcoin with anyone, anytime but know this one thing: You'd better be ready with some better answers than what I've heard so far in its favor.
I'll even tell you my strategy for those discussions.
I'll ask you to explain to me what's so great about Bitcoin. Tell me its advantages and then back that up. The problem with ideology is that it's based on belief, not reality. If you believe that the distributed model is an advantage, you need to tell me why. Being distributed is not a valid argument. You believe that it's an advantage because you buy into the ideology.
Same goes for the P2P aspect, the non-control issue, mining, the 21 million limit.
If I have one bit (pardon the pun) of advice for you, it's this: Don't fall for schemes like this. Don't get involved in MLM schemes. Don't invest your money in something with no tangible or physical assets. Don't believe all the hype around something like Bitcoin.
Remember that if something sounds to good to be true, it is. If something sounds shady or underhanded, it probably is. If something is sold to you as anarchist, anonymous, distributed, P2P, or subversive, then chances are almost 100 percent solid that there's criminal activity afoot and the police are watching.
Dollars are better than Bitcoins. There's no doubt. I don't have to purchase dollars with other currency to buy things that I'd normally buy anyway. If I can't use dollars, physical or virtual ones, then I probably don't need whatever it is. If I have to buy another currency to get what I want, then I'll do without. Dollars will spend anywhere and I can use them anonymously or not. And without fear of anyone but my wife watching.
Now, to those of you who want to call me names on Twitter because of this post, here's what will happen: I'll block you. I know you want to be anonymous and virtual, but if you can't face me and say those things, then you shouldn't say them online.
I'll entertain any reasonable dialog on the topic, so please feel free to engage me. Use Bitcoin or don't use Bitcoin. I don't really care. But don't tell me that because I don't like it that I'm anything but entitled to my opinion. The fact that we disagree doesn't make you right.
*Stilgherrian - is that a first name, last name, or one of those mono name things like Cher or Shakira? Either way, I don't get it nor do I know how to pronounce it. I need to get myself one of those cool single names. I'll take ideas for one.
**If you think they're anonymous, you're very wrong. This from the Bitcoin FAQ: "Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, Bitcoin is not anonymous and cannot offer the same level of privacy as cash. The use of Bitcoin leaves extensive public records."
***Think IPOs of things like Twitter here. Pet rocks. Paying $300+ for a Tickle Me Elmo. How many do I have to name?