Posted by: DeepDotWeb
June 11, 2014
Bitcoin has gained tremendous support since its conception, and, moving into a new technological era, is being regarded by many as the new way to trade. Many others, however, view Bitcoin as a danger to potential investors. This article will outline some of these opinions, and provide a side-by-side comparison of some of the biggest names the economy and their opinions on that crypto-wonder named bitcoin!
These opinions will be represented in a positive/negative order, to provide optimal examination of argumentation.
1. FINRA on Bitcoin , “buying and using digital currency such as Bitcoin carry risks.”
FINRA is a self regulatory organization concerned with investor safety. With this goal in mind, they released an official warning to potential investors.
-The organization first points out that Bitcoin is “not legal Tender”. They go on to say that the existence of Bitcoin as a non-federally regulated currency is cause for skepticism because, as an investment, bitcoin is subject to mass deflation at the hands of the few that accept/pay in Bitcoin.
- Next, FINRA elaborates on the ability of a digital platform (bitcoin) to be hacked. They state, “Platforms that buy and sell bitcoins can be hacked, and some have failed”. Next, FINRA states that the digital wallets are also susceptible to hacking.
- The next issue brought up by the self-regulatory organization is the amount of fraud that is possible through bitcoin. Capitalizing on the example of a person posing as a Bitcoin exchange, FINRA stresses that the susceptibility not only to hacking, but also to fraud is something to be very aware of when examining the prospect of Bitcoin as an investment.
- Again examining the idea of the Bitcoin payments themselves, They bring up one of the possible biggest issues of cryptocurrency: no refunds! Financial Industry Regulatory Authority, Inc had this to say about the issue: Bitcoin payments are irreversible. Once you complete a transaction, it cannot be reversed. Purchases can be refunded, but that depends solely on the willingness of the establishment to do so. Yet again, FINRA reaffirms its belief in Bitcoin being an area of investment to be avoided by bringing forth some questionable areas.
- Finally, FINRA ends on what may be their most convincing point against investing in Bitcoin: its possible illegal activity. “In part because of the anonymity Bitcoin offers, it has been used in illegal activity, including drug dealing, money laundering and other forms of illegal commerce. Abuses could impact consumers and speculators; for instance, law enforcement agencies could shut down or restrict the use of platforms and exchanges, limiting or shutting off the ability to use or trade Bitcoins.” says the Authority on the legal issues possibly associated with Bitcoin.
FINRA’s general opinion on Bitcoin can be summed up by the broader statement: ‘It isn’t safe.’ The safety of Bitcoin, and cryptocurrency in general, has been foremost in the minds of many potential investors. These concerns are partly assuaged by the constant reassurance by the current investors in Bitcoin, who seem to believe that safety is mostly dependent on the precaution of the investors themselves!
2. IT Professionals?… “Out of 847 responses to a questionnaire sent to Tech in Motion’s 18,000 members, 51.12% answered “yes, absolutely,” to the question “Would you be interested in being paid for your work in cryptocurrencies like Bitcoin?” A further 18.06% ticked “Maybe, let’s see where Bitcoin is in a year or two,” with the remainder saying that they would prefer to be paid in traditional currency.”-bloomberg news
- Although the experience in investment may not be as valued in these professionals as in FINRA, the fact that so many see opportunity in Bitcoin certainly shows promise. The professionals in the market seem to see Bitcoin as the revolutionary form of payment that it seeks to be.
- In reference to the FINRA warning, many still believe that Bitcoin is no more easily corruptable that mainstream currency. As for illegal activity opportunities, the attitude of many is one of apathy. Simply said, ‘if I am not using it illegally, why does it matter?’
- It is important to examine the opinion of the common man as well as the professional for several reasons. First, the worth of such a new currency is partially dependent on its usefulness. If more are interested in being paid in Bitcoin, we can expect its worth to reflect such a thing. Second, public interest in Bitcoin shows that Bitcoin is becoming more mainstream, thereby finally getting its chance to become the next big thing!
Not just IT!
- In addition to IT professionals specifically, many freelancers and private employees are now willing to accept payment in Bitcoin. In fact, several communities of individuals seeking to trade their services for Bitcoin.
- One such example is the reddit site r/jobs4bitcoins. This reddit site is filled with over 5000 readers, and recieves hundreds of ‘for hire’ and ‘hiring’ posts a day. In addition, Coinality is a site with the similar goal of giving the cryptocurrency a sizable service market. This means that, not only IT professionals, but many freelance professionals are now accepting Bitcoin (including this writer!)
3.Warren Buffet, “The idea that it has some huge intrinsic value is just a joke in my view.”
Warren Buffet is an American investor noted for his keen eye for investments, and, apparently, for his disdain of Bitcoin!
- Mr. Buffet warns against Bitcoin on an asthetic level, first pointing out that Bitcoin has no intrinsic value. By this, the investor is voicing the concern of many who first discover Bitcoin: Why is it worth anything? Such a question is tough to find an answer to, although one may be inclined to look into the origin of value in any market; where does it come from? In some sense, many believe that the value of Bitcoin lies in the innovative possibilities, as bitcoin gives way to anonymouty never before available when paying online-and off!
- “Stay away from it. It’s a mirage, basically”, says Warren, when describing Bitcoin on the show Squackbox. With this, he is trying to depict Bitcoin as a temporary solution to a problem that will persist. Although Bitcoin in itself is an attempt to improve the transmission of money, it holds no true value, says Buffet. In essence, Mr. Buffet is equating Bitcoin to an idea that holds up wonderfully… until it all comes crashing down!
- One of the leading arguments against Warren’s assessment of Bitcoin is that Warren Buffet is not a fan of new technology, making any critique of a new technological industry flawed at its source.
- Buffet’s criticism has amassed a lot of support among the weary opponents of Bitcoin. To many, Bitcoin is the crux of all that is temporary and fleeting. But to many more, Bitcoin is a large opportunity.
4. Marc Andreessen, “The historical track record of old white men crapping on new technology they don’t understand is at, I think, 100%,”
- Marc’s defence of bitcoin is heavily source-oriented at first. The core argument is that Warren Buffet, when attacking Bitcoin, misrepresents the core logic behind bitcoin. He elaborates, saying that Buffet himself has a long history of avoiding new technology, therefore he is naturally going to be against Bitcoin, nomatter what the merit.
- Next, However, Mr. Andreessen brings in technical talk to combat the point made by Buffet concerning Bitcoin’s seemingly Arbitrary value: “A value of a BTC is not arbitrary, in fact it’s the opposite of arbitrary,” he says. “It equals the value of a single slot in a finite sized public cryptographic ledger through which value can move. The total Bitcoin ledger has value corresponding to the volume and velocity of transactions that will run through it in the future; by extension, each slot in the ledger has fractional value determined by the total number of slots (which, in Bitcoin’s case, are limited to 11 million today and 21 million ever).”
- In any case, Marc disagrees heartily with the majority of critiques on Bitcoin. On the subject of safety, he sides with the aforementioned masses in the belief that safety is in the hands of the buyer, not the servers. On the question of true Bitcoin value, he believes that the value is in the technical support and in the innovative ideology that Bitcoin provides. (He also doesn’t seem to be a big fan of mr. Warren…)
The opinions on Bitcoin vary greatly. Some, like FINRA and Warren buffet, oppose it for various reasons (lack of safety/value. Others, like professionals workers and Marc Andreessen, hail Bitcoin as an opportunistic technological innovation (due to intrinsic value and usability). Although the opinions vary from person to person, the general consensus is the same: Bitcoin is a BIG DEAL!