With bitcoin and other cryptocurrencies suffering extreme volatility throughout this year, the mainstream critics have blasted the entire sector. Making calls for impending doom, bearish analysts certainly have been creative in their arguments.
Earlier this month, The Washington Post made no qualms about its position, declaring that “Bitcoin is still a total disaster.” The universally-respected MIT Technology Review stated in a comparatively more sophisticated headline, “Bitcoin would be a calamity, not an economy.”
Investors in cryptocurrencies have typically ignored such criticisms thanks to prior sector bullishness. But with BTC and major blockchain-reward tokens down big, any bearish perspective tends to stick.
So did BTC proponents get it wrong? I don’t think so, and the commonality in the various pessimistic arguments suggests mainstream fear in bitcoin’s true potential.
Bitcoin Opponents Focused on its Currency Component
When you read the aforementioned Post’s criticism against BTC, you’ll find that the piece focuses on the token’s original goal to become a dollar alternative. Despite the fact that its launch date occurred nearly a decade ago – and that things can change over that time – crypto critics remain hung up on this issue.
It’s the same issue with even the sophisticated MIT Technology Review. Their criticisms center on the ineffectiveness of cryptocurrencies as a fiat alternative. Primarily, bitcoin is too volatile and would cause valuation and pricing problems for the underlying economy.
The issue here isn’t inaccuracy. Indeed, bitcoin is far too wild for society to consider it a viable currency. After all, who wants to buy a pizza for 0.003 BTC? Unit-wise, bitcoin’s rarity prevents it from becoming a competitor to the dollar or other central-bank issued note.
My concern is that the criticisms are unfair. Since we’ve already established bitcoin’s volatility, that cannot be considered a new argument against cryptocurrencies. So where are the new arguments?
You won’t find too many, especially among mainstream-media publications. If it’s not volatility, it’s the other age-old criticism: that bitcoin is the platform of choice for drug dealers and various criminals.
But rather than a source of frustration, I consider this an indication that the mainstream fears bitcoin. As in the sporting world, you boo and heckle the players that do the most damage against your team. In this case, bitcoin and cryptocurrencies represent a paradigm shift.
This isn’t about necessarily replacing the dollar. No, bitcoin has succeeded in a far more fundamental way: it proved that an alternative can exist.