When many people first encountered bitcoin in the early days, the response was something akin to disbelief. The proof of work algorithm appears haphazard, and it's not obvious at all that it creates a stable system. Could something like this really work? It seemed somehow impossible (and there were academic papers that supposedly proved it was impossible), and likely to be broken or fall apart. Then as the system continued to function as advertised we were forced to take a closer look.
For others, the response has been very different. A visceral emotional response has emerged in some people, who are somehow shocked and enraged that people might use a public currency. This is what we mean by "crypto" here: public currency - blockchains, bitcoin, litecoin, woodcoin, ethereum, and all the rest. We are not talking about privately issued currencies, paypal bucks, bank wire funds, wechat rmb, etc., even though these rely heavily on cryptography - as those have somehow not earned the moniker of cryptocurrencies. It is their private issuance, their fiat nature, that makes them somehow escape the wrath of the bitcoin haters - despite the obvious problem that their issuance cannot be regulated.
It's often important to accept emotional responses, as there's no way to argue with feelings. And later today we will discuss where these feelings might come from and what they mean, and how to deal with them. But first, as an introduction to this topic, we will look at some of the spurious arguments which are given as to why we should hate crypto. Sadly, many of the people who seem affected by whatever it is that makes a person a crypto hater are desperate to lash out at the ecosystem in any way they can, which doesn't wind up looking good in a logical sense.
The theme here is analogous to the catchphrase of FKN News' Deek Jackson's parody character "Conspiracy Clown", who says"
Because it's not enough your government are lying murdering scum. [They also have to be alien shapeshifting satanists]
Do you see the analogy? Instead of attacking the very real scammers going after your money, the fraudulent ICOs, the CFD trading casinos, the exit scams and honeypot markets... instead of going after the difficulties we will face in dealing with multi-currency systems and stacks of private keys to sort through... instead of analyzing the choices of bitcoin to use a geometrically growing supply, 1MB blocks, SHA256 as proof of work, or any other design choice... instead of this kind of worthy and important criticism the haters go for some total nonsense which is immediately identifiable as logical fallacy.
A strange technique indeed, why? Keep in mind here that we aren't saying that some people claiming to be governments aren't lying murdering scum, we are instead saying that people claiming they are alien shapeshifters are confused. Similarly, in this essay we aren't saying all crypto and everything around it is impeccably angelic. Ha! Far from it. But what we are saying is that the crypto haters appear very confused indeed.
Why? Is it something reminiscent of the mental struggles that create the conspiracy clowns of our age? Perhaps so. Every case is unique, it probably does not behoove us to lump people together in categories, but we can make some general observations.
First lets look at some of the nonsense you might have heard in regards to why you shouldn't touch public currencies with a 50 foot pole.
Spurious claims detracting from real criticism of bitcoin:
- For Criminals
- Energy Waste
- Market Manipulation
- No chargebacks
- Is stupid
- It's slow
- It's the mark of the beast
- It's money out of nothing
- Doesn't work without fiat.
- Doesn't solve any problems
There are more of course but lets keep it to 10 in the interest of brevity.
Maybe you've heard this one, that bitcoin and cryptocoins are "only for criminals" and so we should stick with using fiat currencies. The most obvious broken logic here is that cash - fiat cash - which apparently the bitcoin hater is trying to get us to stick with - is 90% in black markets. In other words, 90% of the outstanding cash is held by criminals (an estimate quoted by many sources including the Economist magazine). And this is the stuff that the bitcoin hater apparently would prefer that we use! It's like they are telling us to prefer the letter A over the letter B because B simply comes too early in the alphabet. Fiat cash is more anonymous and criminal friendly than any public coin.
To be fair, it's probably just a general smear. Remember the silk road? That was bitcoin. Bad stuff happened. OK, so sometimes we prefer propaganda to a real argument, point noted. But seriously, plenty of bad stuff has happened that involved fiat currency as well, wouldn't you say? Even criminal stuff? Even the really ugly stuff that I don't want to mention, that bitcoin haters often do mention (and yes, bringing that stuff only detracts from any logical arguments, kind of like my mentioning that Hitler used fiat makes my criticism of fiat seem week). It was purchased with fiat currency wasn't it. An important point to make here is that counterfeiters don't counterfeit cryptos, because lets remember that's the whole point of cryptocurrency, to eliminate a very specific type of criminal activity. So as for that part of criminality, we know it exists only amongst fiat issuers. Otherwise, why bring it up?
This is another extremely popular one amongst bitcoin haters, to the detriment of their otherwise potentially reasonable and important arguments. Again the goal seems to be a smear against public currency based on the choices of many people to use extreme amounts of electrical power for their mining operations. And sure, a lot of people are choosing to do so. Perhaps too many, as many operations have gone out of business when they can't recover the electricity costs. Many people argue the details of these analyses, but the main problem here is again the same one: if we cared about wasting resources, maybe we wouldn't price things in fiat currencies which are created from nothing. Criticizing a public currency itself for being wasteful (not some wasteful folks using it) is just a clearly broken assignment of blame - and it makes it even worse when you consider that the system they are defending is a far worse culprit. What about street lights? Christmas lights? Single passenger commutes? Oh oh, here's one that might be something of an energy waste: military occupation and the prison-industrial complex, supported by fiat issuance. How about fiat subsidies for oil companies, does that have anything to do with energy efficiency and use? Do you really think that instead of talking about the petrodollar and the biggest power companies and players - we should instead focus on fighting against the use of spare capacity to secure an uncounterfeitable public ledger? Even though people are willing to pay for it - even without subsidies from issuers? It doesn't make sense. Sure, there are plenty of clowns doing silly things with miners, and this is worth bringing up, but should it be used as a criticism of bitcoin and crypto in general? Hells to the no.
It's like, there might be a lot of reasons to hate axes and chainsaws -- but if your campaign against them is based on telling people that they suck at cutting down trees, you're going to be treated as a loony. Here, we are going after Proof Of Work systems which give us a badly needed rational approach to valuation of energy resources - and people are attacking it as being a reckless energy hog. It doesn't make sense, it just seems like a desperate emotional response, which is not what we need at this stage in human history. Our actions and these topics are too important for that.
This is another one that you hear a lot about if you try to seek out bitcoin haters and listen to their story. The cryptocurrency markets are manipulated! Well uh, yeah. There's a nice lesson here, in case you were unaware how markets work, take a look at the cryptocurrency markets. Every time you make a buy or a sell, you are manipulating the market. And if you are a whale (you have a lot of the goods being traded, a significant fraction of the total in the market), you have all the more power to manipulate the market. Do you think this kind of thing happens in other markets? Like for example, oil? Diamonds maybe? How about, any other commodity or consumer product you can name? Yes, they are manipulated. What about stocks and bonds and gold? Do you think some whales and market operators and big players have some games to play here? How about dollar issuers, do you think they might manipulate some markets? Of fucking course they do, you don't need to be a conspiracy theorist or bitcoin hater to know this - you can read about it in the wall street journal on every page.
Oddly enough, once again, the fact that public currency can be easily withdrawn (something referred to as instant physical delivery), means some of these games are a little harder to play in crypto markets. So we see once again that the attack on bitcoin here is built with a weapon that is more suited to attack fiat currency.
Here's another thing that bitcoin haters will tell you makes bitcoin absolutely inferior to traditional money: that you can't claw back a transaction after it occurred unless the other party wants to reverse it. You know, like cash - which also can't be pulled back without permission of the new owner. Right away we see that the argument against bitcoin here is exactly an argument against cash, which usually isn't what the hater wished to convey - they prefer fiat cash after all. To make matters worse, cryptocurrency allows for various levels of escrow, mulitsignature, and ways to make sure that all parties are satisfied before the account is settled. And of course, one can use traditional 3rd parties if one wants further such protection. Sure, we can make specific arguments against practices which are sloppy or risky, but is this an argument against using public currencies in favor of fiat? Obviously not.
This refers to the namecalling aspect here where the public coin user is stereotyped as being a neckbeard, conspiracy prepper, single white male, chinese miner, nerd, penniless parent's basement dweller (yup, that's what's driving these bull runs), mouth breather, and various other conflicting pejoratives too nasty to mention here. As usual on the internet, calling people stupid only makes us look even more stupid - and participating in stereotype pejoratives only makes our argument look weak. Why do people still fall for entering in such dialogs in this day and age? It's because we are emotional, as mentioned in the start of this article. If we could control that we would be much more powerful and useful.
Many folks complain endlessly about how slow bitcoin is, some folks because they are pushing their own coin (Woodcoin has 2 minute blocks, 5 times faster than BTC. Others are even faster.) and others because they just want to hate on crypto. In fact both are wrong, especially the latter. The case becomes clear if we lay down exactly what is slow: public confirmations. Public confirmations take time, in the case of bitcoin on average ~ 10 minutes. How fast are public confirmations in a pure fiat transaction? Well, there are no public confirmations. They are infinitely slow. Once again, hardly a reasonable argument for fiat from the crypto haters here is it. Another thing worth mentioning is that for retail, face to face business, and anything where you know your customer, the transactions are instant. Do the test of sending one LOG to a wallet and see how long it takes for a notification to pop up that the coin was received. A few seconds at most. Sure, if you are accepting anonymous deposits for larger amounts of money, you will need to wait.. and this is a point very worthy of discussion but once again - a really shitty argument to use fiat currency or to hate public currency.
Mark of the Beast
This one is kinda funny, I heard it first in a bar, like many of these other ones. The issue is that bitcoin puts a number on you, and is a single currency shared by the whole world, as foretold in revelations. Somehow, people hate the idea of public currency so much they try their hardest to push it into a box marked "the devil". In this case it doesn't work immediately on inspection because bitcoin is a million different currencies, and anyone who cares to can make as many addresses as they like.
Money for Nothing
This one I first heard from a gentlemen who hailed from Paris, at a french speaking meetup. He said that the thing he didn't get about bitcoin was that it seemed like it was money from nothing. I had to laugh but in fact I have since heard others puzzling over this. As you obviously know now, as you are reading here, bitcoin is exactly the opposite of money for nothing. In fact fiat currency is exactly and by definition that: money for nothing - as much and at any time that the issuers would like. Bitcoin is quite exactly the opposite - it comes at a clear schedule and for a fixed amount of energy, all publicly auditable - never for nothing (unless there's a premine). Of course it doesn't mean it has value or is worth pursuing, but it is clearly not from nothing. This might point towards one of the issues amongst crypto haters and why they are emotional about this topic: they don't want to think about or accept the fundamentals of the fiat system - they are angry because public currencies make their private ones look bad. Perhaps there is something similar here about why the Sri Lankan domesticated elephant sometimes hates the wild elephant. We don't want to think about the worst shit in our lives. The wild elephant represents something we have lost or have missed out on and we don't want to face it.
Doesn't work without fiat
This is another argument you hear from the haters - that nobody really uses public currencies, they only use them as intermediates for the private ones. Sure, there are services that convert payments in BTC to fiat directly for merchants, but there are others that convert currencies the other way. There are services that convert Wechat RMB to USD but nobody is going to say that Wechat RMB doesn't work without the dollar. It is immediately verifiable that public currencies work without private ones involved - simply install a wallet and make a transaction. No public currency involved. Sure, it's a valid point that much of the world still uses private currencies to price things and do regular business, but this is hardly an argument that public currencies won't work. After all, there was a time when Arabic numerals were new and most of the empire used Roman numerals. This was not due to any reliance of Arabic numerals on an underlying Roman numeral basis, but simply due to the history of the two systems in that location. Fiat doesn't need gold to function, and bitcoin doesn't need fiat to function, that should be obvious and claiming otherwise only will make people doubt all your other reasonable points. That's right I'm talking to you!
Doesn't solve any problems
This one continues to trip up eves in some high profile commentators. They say that bitcoin is a solution in search of a problem. Come again? What about the problem identified in the first block:
The Times, 03/Jan/2009, Chancellor on brink of second bailout for banks
You don't think that some people creating as much money as they like for nothing and other people having to work for it is a problem? This problem is so obvious and clear that it has been discussed continually by politicians basically forever. One example here is in a quote by Thomas Jefferson:
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
Despite this, some people like to stick with the line that there's no problem here. "Well there's no inflation" is a common answer.
This issue is probably closer to the heart of what gets folks emotional and angry about the existence of public currency, whereas the earlier mentioned gaffes are just jabs and defensive attacks. The core issue is whether there's a problem worth discussing or solving in the issuance of currency. It's clearly not nothing, as it is the largest business in the world worth something on the order of 10 trillion 2019 USD per year.
Why is this an emotional topic? Well I don't rightly know, this is something we need to ask ourselves: why we might feel emotional about it. Is it because we feel our core values shaped in our childhood depend on such a system? Is it because we are afraid of what we might do as nations or as peoples if we were not thusly arranged? Is it because a change would make us feel like we had been wasting our time or even worse - promoting a system which exploited us? These all seem like possibilities.
However we might also consider another scenario of general cantankerousness. Sometimes we have had a bad day or have done some stupid shit and feel bad, and we just wanna shit on someone. It could be that the emotional nature of bitcoin haters comes more from this side then from any emotional attachment to private issuance systems, who knows. One thing we can probably say for sure is that every case is different.
Another possibility is just that the majority of people don't use public currency. This means that those who might use public currency are a minority, and this means we are easy targets for slurs and general derision - for in some sense it is wise to derate anyone outside the norm. It is wise because only if you are confident in your minority view should you continue it. This is perhaps the nicest face I can find for the bitcoin hater - they just want to make sure we really are getting all our ducks in a row and being confident - and if we can't put up with some shit throwing from the internet - why we really should go home and stick with doing what everyone else is doing simply because everybody else is doing it.
In conclusion, we can say that as does all money, bitcoin sucks. What a buzzkill to have to think linear finance, and what a mistake to place a number on value. A necessary evil, in the shop perhaps, but maybe not even that. We still haven't mentioned all the scams, shitty software, fake hacks, psychotic promoters, dunces creating faux-republics, clowns, hype bandwagons, sea-steaders, nor offensive marketing campaigns. And yet despite all this, public currency is still perhaps a vast improvement over the counterfeiters-take-all system of private issuance and the shithawks that prey on it.
Or is it? Perhaps we shouldn't be too quick to discount the pro-fiat arguments. Just because the bitcoin hater appears to be emotional and possessed with an unlimited supply of logical fallacies doesn't mean there isn't some core argument here we are missing. Something about benevolent monarchies perhaps? Perhaps they could point to some places where the issuers have done something for the people and society, like maybe Switzerland or China? Perhaps the iron monetary policy of public coin will be what is hardest to face about our new robotic overlords? Keep an open mind dear reader, don't be fooled by the emotional bitcoin haters you see online - there might actually be a logical reason to hate the bitcoin and to prefer private issuance. Seems unlikely sure, but hey - we'll never benefit from closing our mind to other possibilities.