Tech Crunch, promoter of all things digital, points out a problem with Bitcoin’s image. In a recent opinion piece John Biggs, the publication’s East Coast Editor, who has written for the New York Times, Popular Mechanics, Money and was former editor of Gizmodo.com, thinks Bitcoin is “on the verge of being wrong.”
“I’m a BTC fan,” he writes. “I understand the value of the system as a .zip file for wealth. But Bitcoin has an image problem. Its followers see themselves as freedom fighters, attacking outsiders with vengeance and talking up their own accomplishments in the language of the already victorious,” Biggs writes, noting the sense of arrogant inevitability coming from confident Bitcoin supporters. Biggs notes that Bitcoin chat forums, such as the one on Reddit are packed with “endlessly effusive, crowing that this cafe is accepting bitcoin and this dentist is filling cavities for bitcoin. These slight wins are literally meaningless, as important to the future of bitcoin as their decision to stock a certain type of Roma syrup. These incremental hoots make it seem like bitcoin is growing. It isn’t, at least not in a global sense. These new wins are simply PR ploys and the bitcoins exchanged are immediately converted into fiat currency.”
Addressing the “no regulation crowd”
Biggs takes aim at those who support little or no government regulation, noting that operating a payment system where there is no rule of law will further drive away respectable users. “As it stands now, bitcoin is used to buy drugs and maybe stuff from Overstock,” he writes. “There is no impetus for the average user to dump money into an unregulated system that appears as volatile as the currency of some banana republic run by a capricious dictator.”
His final dig is the charge that “bitcoin users are seen as misogynistic and sexist,“ citing derisive posts on Bitcoin chat rooms and in meetups when new users ask questions deemed simplistic. “If bitcoin users don’t want to be seen as sexist, insular nerds, then the change begins from within.”
“Fans of many dead creeds have also learned, too late, that fanaticism is not bedrock on which to build longevity, it is a mire,” Biggs writes, pointing to a warning. “Bitcoin is still in its infancy and the rise of potential bitcoin competitors wholly owned and operated by major corporations is coming.”
Bitcoin institutional takeover concerns some
It is here that another of Bitcoin’s image problems arises – that of an institutional takeover of the digital currency, which can be used to track individual usage and control a population with NSA-like precision. While the strain of Bitcoin criticism Biggs espouses is aimed at the fanatics, there is a more subtle concern with a digital currency or payment systems that has the ability to track users to a historic new level. This concern is voiced in dulcet tones by those who note with growing alarm the apparent abuses of the US Constitution by the security apparatus and the potential for abuse, both real and imagined. Concerns were only increased when praise was initially heaped on Bitcoin by institutional mechanisms of control – the US Department of Justice, Federal Reserve and Securities and Exchange Commission. When an apparent coordinated press release touted Bitcoin, propelling its legitimacy, it surprised privacy advocates, who were more troubled to see large banks following suit.
First, it was Bank of America Merrill Lynch initiated coverage of Bitcoin similar to a stock – a major milestone on the path to institutional success – then Wells Fargo recently convened a meeting of regulators to discuss regulation of the digital currency. From one perspective, this was viewed as positive, a move that would help bring Bitcoin into the mainstream. To those who have been watching the ever-more-controlling US government spy apparatus establish tentacles into once private lives, it was another chilling trend. While fear exists that the government might abuse this technology to control free speech and the democratic process, another concern is that spy apparatus may fall into the wrong hands. What is to prevent a government worker or contractor from taking the keys to amazing spy and tracking technology and selling it to a drug cartel, terrorist organization or other nefarious group?
While concerns exist, Bitcoin marches on. “Bitcoin needs to entrench itself in the same way the Internet has entrenched itself,” Biggs writes. “However, unlike the Internet, there is no clear way forward, no use case that the average user will accept as valid. The Internet changed the way the world did business, but there is no calm, stolid Amazon.com, Inc. (NASDAQ:AMZN) for bitcoin, just warring fiefdoms blowing hot air. A clear, central message is key. Just as the Internet’s message was ‘Get it all done, faster,’ Bitcoin’s message should be, ‘send money for free.'”
Just like much of Bitcoin rhetoric, the “send money for free” message isn’t exactly what it seems. The fees generated from Bitcoin’s usage are taken from the entire ecosystem, as the Bitcoin “miners” mint new currency as payment for processing transactions. Just like a sovereign government printing endless amounts of currency at some point it diminishes the value of that payment method.
As the “Bitcoin revolution” roles forward, concerns remain and are growing louder as well.