It is time for Bitcoin Critics to find new talking points — They are starting to sound dated and old.
The year is 2024. Everyone and their grandmother have both heard about Bitcoin and have also heard about its inevitable demise shortly thereafter. However, in the year 2024, I am continuously surprised by how little critics of Bitcoin actually know about the network, the currency, or even the true value proposition. What many critics may know about Bitcoin often turns out to be nothing more than dated takes and strawman cliché narratives from cycles past. It's not 2017 anymore.
Last night for instance I was at a dinner event and was speaking with a cybersecurity expert who worked for a major banking institution. We were having a spirited discussion when the topic of Bitcoin came up. As a cybersecurity expert, his first comment was that he sees potential in bitcoin as a distributed ledger on the internet. He knows that any monetary system that hopes to operate over the Internet must be operated using a ledger system and not a digital token. In my opinion, this is a great insight that shows that he has a high level of understanding on this subject matter of cryptography and digital currency which a lot of regular people would not have.
This is where things started to go south as he transitioned to the ‘but’ of his talking point… here we go. Allow me to paraphrase here:
“But bitcoin has only been used as a payment system for scammers and criminals, and not only that but if we're in a doomsday scenario and the lights go out, who is accepting bitcoin?”
Where to even begin… In my opinion, these takes are both so dated and so lame. The scammers' and criminals' talking points were only relevant a decade ago during the peak of the Silk Road before bitcoin had any other real use cases and before any proof of store of value had been established. It's hard to argue that Bitcoin is only used by scammers and criminals in the same month that bitcoin received the seal of approval not only by the United States Securities and Exchange Commission but also from 11 of some of the largest asset management financial institutions in the world which have begun trading Bitcoin Spot ETFs in the US… Unless you believe that Wall Street is full of scammers and criminals, which could be a separate discussion entirely.
On the second point regarding Bitcoin not being very useful when the lights go out in an emergency situation… He is not wrong by any means. Internet money is no good when there is no internet, that is for sure. However, as we as a society transition to a cashless society, I would argue that FIAT currencies are also no good when the lights go out. At that moment, I pulled out my wallet to show that I had zero dollars in cash sitting in my wallet. Everything that I buy is through either tapping the card or Apple Pay on my phone. Never cash.
In the summer of 2022, Rogers Telecommunications had a nationwide outage of cellular networks for the day Canada-wide and it was a disaster. Nobody could pay for anything. Not only were our phones down, but the debit machines at grocery stores and restaurants were also down. It was an eye-opening experience. If the internet is down for an extended period of time, he is right, you don’t want to be holding bitcoin. But I would add digital dollars to that list as well. I’ll take canned food and water, please.
So this brings us to today. Bitcoin is a decentralized network which is run on software that has been downloaded onto as many as 13,000 active devices worldwide which all work to keep the network alive.
The network strength of bitcoin measured in computing power continues to drive in an exponential function up and to the right as it surpasses 500 exahashes per second — an outstanding amount of network security. For reference — Exahash per second: 1 quintillion hashes per second.
And finally, last but not least, the Bitcoin Price has continued to climb steadily from the depths of the bear market of 2022 to a price today of roughly $41,000. Anyone who has been pricing their savings in Bitcoin has seen their total savings appreciate well over 150% from the market lows in November 2022 during the worst of the FTX blowout. Most people buying over this time are able to see their savings deep in the green at a time when Inflation has been ripping red hot for nearly two years now.
Rents are up, house prices are up, and mortgage rates are up. Gasoline is up, food is up, eggs, beef, milk — you name it and there is a good chance you heard a family member gripe about price increases over the Christmas holidays.
Anyone who measures their savings in Bitcoin has seen their prices at the pump and at the grocery store steadily fall over the last year. In the figure below from the Federal Reserve Economic Data (FRED) Blog of St. Louis, the price of Eggs is displayed in Bitcoin terms using Satoshis (100 Million Satoshis = 1 Bitcoin). As you can see in the figure below, the price of eggs has been in total freefall over the last calendar year falling from over 25,000 sats in January 2023 to under 6,000 sats in January 2024.
I know where I want to keep my savings, thank you very much.
The homework lesson from today’s read, if you would truly like to have your mind blown is to consider the price of a house in bitcoin terms and see how that calculation looks. Use the following parameters for simplicity:
· A home that increases in value from Purchase in 2020 to 2024 from $500k to $1 Million
· Bitcoin that increases in value from 2020 to 2024 $10,000 to $40,000.
Finally, just for fun, I will leave you with the USD/BTC chart over the last year. They say that a picture paints a thousand words.
In conclusion, Bitcoin has established itself as a strong and healthy decentralized network that is here to stay for the long term. Many critics of Bitcoin are stuck in the past using dated criticisms that simply do not hold water today against Bitcoin’s proven track record and accomplishments. I am ok with people being critical of why Bitcoin may succeed, as I would like to have a proper discussion, I just wish they were capable of bringing some better material to the table, at this point, it's getting rather sad for them.
It is time for Bitcoin Critics to find new talking points — They are starting to sound dated and… was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.
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