It is commendable that the FT found someone credible to speak out against bitcoin (“Why bitcoin is worse than a Madoff-style Ponzi scheme”, FT Alphaville, FT.com December 22). The bitcoin hype is so strong that it is important to publish counter-arguments. Unfortunately, Robert McCauley’s piece reads like the musing of a dinosaur examining a large flaming rock in the air and wondering what it could be.
First, bitcoin is a completely new type of asset, so it is useless to analyze it as a security. If you have to shoe it in any traditional category, you will have a better time comparing it to a commodity, especially since it responds to the macroclimate in a similar way. Far from “pump and shower” (how can you “pump” an asset with a market capitalization the best part of $ 1tn?) Most bitcoiners treat it as digital gold – a type of gold that can be sent anywhere in the world in an immediate, weighs nothing and does not require expensive storage.
While it may be treated by some as a Ponzi, the majority of bitcoiners do the opposite and Hodl (“hold on for dear life”) for five years or more, according to the “Hodl Wave” metric. These accounts may not have to sell to realize the value of their investment, as they can borrow against their stack by using any number of innovative, inexpensive loans that take digital assets as collateral, including self-paying loans. Google it.
Finally, no bitcoin “hit” piece will be complete without evoking the environmental impact. The fact that McCauley turns to this zombie argument to support his thesis speaks to its faintness. This problem is already being solved by proof-of-game blockchains like Near, Cardano and soon ethereum, while bitcoin miners are turning to renewable energy sources. This is more than I can say for commodities like oil and gold, which continue to wreak havoc on the environment with few solutions in the pipeline (pun intended).
I understand that the world of digital assets is overwhelming and confusing. It’s a revolution and these things are chaotic in nature. But they do not go away either. It is better to accept evolution.
Chief Technical Officer, Bybit, Vientiane, Laos