The first Bitcoin crash happened in 2011. In this dramatic, optimistic surge, the cryptocurrency quickly rose to about $28 — and just as quickly fell to about $3. The gloomy naysayers, defeatists, and misanthropes came out of the woodwork — boldly asserting that cryptocurrencies were finished. And yet, through it all, Bitcoin has been remarkably resilient; for every “collapse,” it has rebounded vigorously — making new highs. Likewise, with each new surge, the pessimists have become ever more angry and critical. This despondent, dogmatic hatred is disappointing, because in reality, the cynics are missing the Bitcoin boat.
One of my favorite articles was published by Wired Magazine on November 23, 2011. It was titled The Rise and Fall of Bitcoin. And yet, only a year later, Bitcoin began its next meteoric assault, which culminated at around $266. Then it crashed again — this time to a low of around $60. And, predictably, the doomsdayers appeared en masse to vociferously proclaim the end of all cryptocurrencies. They called it “Monopoly money” and accused proponents of stupidity. Here’s another wonderful (and humorous) article by a publication called SFGate, from early 2014. It actually compares Bitcoin to North Korea!
Of course, Bitcoin went on to reach another new high just over $1100 before it crashed again — this time to a low of about $350. Today it hovers at about $450.
The Nobel-Prize-Winning economist Paul Krugman has defined Bitcoin as “evil.” Warren Buffett calls it a “mirage.” People responding to my articles have consistently and fatuously declared that Bitcoin has no value. They say gold is the only safe store of value. They remind me one can hold gold. They remind me one can bury gold. When I point out that one cannot send gold over the Internet, they do not care. They repeat their mantras. And so it continues.
I believe there are two main causes for the pessimism associated with Bitcoin and cryptocurrencies. The first is that a lot of old school investors just don’t understand technology. While they feel perfectly comfortable using a piece of plastic to purchase dinner or a pair of pants, they can’t quite get their arms around using a cryptographic algorithm supported by a peer-to-peer network (no matter how easy it is). It doesn’t matter that the Bitcoin protocol has persisted for over five years without a single hack. It doesn’t matter that people like me have bought, sold, received, stored, and transferred Bitcoin, ad infinitum, without any breach. To these people, Bitcoin is complicated and scary. So it must be castigated. It must be exposed. It must be burned at the proverbial stake.
The second reason I believe Bitcoin is so passionately vilified is a little more sensitive (and will, I am certain, elicit the most vitriolic responses from crypto-opponents). It is, quite simply, envy. When educated people ridicule a theory, philosophy, technology, or discipline, they expect to be rewarded for their efforts: they expect to see destruction and flames. What they don’t expect (or want) to see is success.
The people who have been condemning Bitcoin since its early days are not happy that it survives. They don’t want Bitcoin users and investors to make money — they want them to lose money. They want Bitcoin to die. And the longer it doesn’t die, the more driven they are to spit on it, kick it, yell at it, and generally hate it.
It’s a shame. I’m not being facetious when I say that. I want people to adopt Bitcoin and profit from it. I believe it is the most profound and revolutionary idea since the Internet, itself (and perhaps even more revolutionary). It bothers me to see these pundits stewing in their own juices — rigidly refusing to participate in the most disruptive and radical shift of our times. It is difficult to watch them as they miss out.
It makes me sad, but I understand this is the way of human progress. We have but to look at the Catholic response to science for hundreds of years to witness how violently and persistently the wielders of weak, outmoded ideas will tenaciously cling to failing systems. And yet they do.
The success of Bitcoin (or its children) is a foregone conclusion. Maybe it’s just the pacifist in me that wants to see people lay down futile arms and attain true happiness; as silly and naive the thought might be, I wish people would accept the inevitable change happening around us, and benefit from it. But, alas, the realist in me knows that isn’t likely to happen… at least not yet.
But I can dream. And I can write. And yet the ship continues to sail…