Could it be fear?
It seems a little odd that Bitcoin attracts extreme emotions seeing as how it’s just another inanimate part of the world’s monetary system. And yet most who have an opinion upon Bitcoin seem to either love it or hate it.
As with all topics to do with money, emotions run high — but I’ve rarely encountered any that are so polarising as Bitcoin.
- I’ve never seen a story that tells people that they’re foolish and gullible for saving cash in a deposit account.
- I haven’t read an article that attracts comments that rip the author to pieces for misrepresenting how pensions work.
- I’ve not encountered a story that berates a generation for trying to enhance their financial future by investing in stocks and shares, regardless of whether others consider such investments risky or not.
Even during the recent WallStreetBets and GameStop fiasco, people seemed able to observe quietly (if sceptically) from the sidelines without having to weigh in with their opinions or to take a side. Yet, when it comes to Bitcoin all bets are off as far as keeping thoughts and emotions to yourself.
Those who buy into it and invest in the hope of making a profit are vocal about doing so. They talk it up to anyone will listen and enjoy speculating about its future increases. It’s rarely enough to quietly invest and leave it at that. I’m guilty of this myself.
A typically understated tweet from a Bitcoin Fan
Those who consider it too risky, flaky, who don’t believe it has a future are quick to share those views. It’s not enough to simply ignore it and think it a scam or an over-hyped technological fad. They have to point out all the reasons why those who invest in it are misguided or greedy. They pick holes in it conceptually and point out all dangers and the ways it will soon implode.
Emotions are now running higher than ever. Is this a reflection of heightened interest in the subject as Bitcoin and now Ethereum push to ever-greater heights in their valuation? Maybe I’m just reading more of the same stories and the polarised comments from those who feel compelled to share their perspectives or argue amongst themselves .
It seems that you have to either LOVE Bitcoin or HATE it — there’s no middle ground.
You can't just be disinterested if you aren’t involved and don’t intend to invest. You can’t just take a stake in Bitcoin and quietly hope for the best. Instead it seems you have to come down on one side or other of the fence with absolute and undying conviction.
Why is this?
The Haters of Bitcoin
I've considered possible explanations for the behavior of the lovers of Bitcoin in a separate story.
The biggest puzzle to me as a Bitcoin fan is why those who choose not to invest in Bitcoin seem compelled to point out all the reasons why? It’s as though they have to ensure everyone else understands why they’ve taken this position. In the more extreme cases it extends to pointing out all the reasons why the lovers of Bitcoin are wrong to feel how they do.
Their objections often build upon the same basic propositions:
Bitcoin doesn’t have innate value
Haters aren’t moved by the argument that since the abandonment of the gold-standard, conventional currencies only have value because we collectively agree they do. I’ve wheeled out this argument frequently in defence of Bitcoin but I still struggle to believe that it explains the situation completely. I can see why haters are sceptical too.
That we collectively agree that banknotes have innate value counts for a lot. In reality, when President Nixon withdrew the gold standard for US dollars in August 1971 there was no longer an innate value to the dollar. In Britain it happened for the GBP even earlier - September 1931. Since that time, the value in our currencies simply comes from belief.
When central banks, governments and the financial establishment all operate to reinforce this perception of value, that counts for much in the minds of citizens. We allow ourselves to believe in something as the grownups have told us it’s okay to do so.
The hater’s perception of the value of Bitcoin is understandable. There simply isn’t yet a maturity or scale in our collective acceptance of Bitcoin. That is needed if society will collectively believe in its innate value in the same way we do with dollars, pounds or yen.
Bitcoin isn’t secure and can easily be hacked
To understand what makes Bitcoin secure demands an understanding of the technology and the protocols that underpin it. It’s daunting to say the least. I work in IT Cyber Security and I still struggle to understand it.
It’s also confusing that Bitcoin is badged as safe, secure, resilient and invulnerable to hacking. Yet we regularly see stories of Bitcoin exchanges that have been hacked and Bitcoin-related scams that have stolen millions from unfortunate victims.
It's important to note that such attacks are more about the security and integrity of the exchanges and the integrity of businesses (and inevitably, the prevalence of scams) that have emerged and which involve Bitcoin rather than indicating a flaw in Bitcoin itself.
When a bank is held-up by a robber we don't blame the currency itself for being stolen but rather of the security of the institution. When cryptocurrency exchanges are hacked and funds stolen, it’s an issue with their security not a crime enabled by Bitcoin.
When we get a phishing email that threatens to unleash ransomware unless we pay a ransom in Bitcoin, that hasn’t been enabled by Bitcoin itself. The threat itself is likely a scam anyway, and even if not the ransom could as easily have been demanded in dollars — the currency isn’t what enables the criminality.
Nonetheless, that the media repeatedly tries to label Bitcoin as a tool for criminals doesn’t help in giving it a bad reputation.
Bitcoin is an investment vehicle, not a a currency
Objections like this one are used by haters to cast doubt on whether Bitcoin has a long-term future and utility in the way it was designed, or whether opportunists are merely trying to make a profit by trading in it. Such doubts are no doubt real and compelling for those who are uncertain whether Bitcoin, like any radical new idea has merit or not in the use for which it was conceived.
It’s clear that Bitcoin was never designed to compete with recognised payment intermediaries like Visa and Mastercard based on volume. They each process millions of transactions per day compared to the thousands per day that Bitcoin can handle.
There are many ways though in which Bitcoin could become an established and useful technology for processing transactions, and cheaply too — for example as a secure and expedient means of settling bulk transactions between banks rather than between consumers and merchants.
I imagine that most paradigm-shifts through history have had to overcome similar objections before gaining widespread acceptance.
As I’ve considered the objections voiced by the haters of Bitcoin all seem valid to a degree. But it doesn’t explain the strength and conviction with which haters voice their opinions. It leads me to wonder if there are emotionally-driven responses and reactions that drive many haters to share their objections rather than technical concerns? Fundamentally, I wonder:
Are they anti-Bitcoin for reasons that amount to jealousy or a fear of missing out or simply innate scepticism?
There is undoubtedly more to it than this, and I’m not trying to be provocative. But if it were simply a case of scepticism, then I doubt the emotional reactions would be voiced so strongly.
Are they sore that they didn’t invest in Bitcoin when its price was $1,000 and envious that they weren’t able to ride the wave to $20,000 and beyond?
I know that this is the case for me. It’s what has driven me to learn about Bitcoin and to invest now rather than missing out on potential future gains.
I first invested in Bitcoin when its price was at a record high. I hope that over time it will still increase radically. I’m also realistic that it could drop chunks of value, and in a perverse way I hope it does. Then I can buy a bit more at a cheaper price and hope for a recovery.
I kick myself daily that I didn’t try to overcome technical barriers to getting involved back in 2017 when I first became interested in it. Bubble or not, many have made a lot of money from it. For the sake of a few hours figuring it out I could have got involved earlier and made my financial life much easier.
Knowing how I feel makes me wonder if envy is at least part of why many haters feel and express themselves the way that they do. It’s not easy to admit, but it’s easily understandable.
Are they frustrated that they don’t have money to invest in Bitcoin (or to speculate or gamble on it)?
Again, I’ll admit to feeling this way. If I had more money to spare I’d invest more in Bitcoin, and in other conventional assets too — we all would.
We live in times when many are struggling to put food on the table and shelter over their heads. We all wish for more money if only to make our lives a little easier. It’s galling to know that we’re living through an age of inequity when the rich are getting richer and the poor, poorer.
It’s also exciting to believe that there are opportunities to make money (whether those are legitimate and compelling, or fragile and based on a bubble). But it’s galling to feel like we don’t have the money available to invest and to expose to risk as a means of claiming our share of the pie.
This is exactly how I felt 20 years ago as a young adult, starting my first job after university just as the dot-com bubble was inflating. It seemed like everyone around me was making easy money by investing in the dot-com boom but I couldn’t afford to join the party.
My salary was stretched as it was, supporting my wife and my newborn daughter and paying off my student loans.
Nobody wants to feel like they’re unable to take opportunities presented by the age, even those that might seem like a gamble.
Are they envious of those who are willing and able to take greater risks and who are willing to take a chance?
This might be the case for some of the haters?
We all have our own appetites for risk. I sometimes envy those who go through life with an anything-goes attitude. Fortune often seems to favour the brave and many are more comfortable with risk than I am.
Is it possible that some Bitcoin haters know deep down that they’re missing out, simply as they know they could never be comfortable making even a small investment in Bitcoin lest it went completely wrong?
Choose to learn more
Whatever the reason for such strong negative feelings, I'd anyone who is skeptical to do some research and to learn more about how it works - you might just be surprised and want to get involved.
Those who are fervent lovers of Bitcoin may also find it helpful to investigate the objections of those who are more skeptical. I've certainly found it helpful as a means of building bridges and feeling better informed.
Note: This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.