No Bitcoin!

“Bitcoin is a Ponzi Scheme” – Setting Goldbugs Straight

By DBit | Unconventional Crypto | 30 Mar 2021

If you’ve spent any amount of time exploring the crypto space, you’ve likely encountered an irritated goldbug preaching their anti-bitcoin gospel. They probably told you that bitcoin is a Ponzi scheme. They’ve said your only hope of making gains is to sell it to “the next greater fool” who also doesn’t understand that crypto is worthless.

How do I know exactly what they told you? Because these guys aren’t the most original thinkers you’ve ever encountered, and they seldom deviate from their well-worn script.

If you ask them why gold is valuable but bitcoin isn’t, they will say that gold has industrial uses. Yet, this explanation is faulty since gold was valuable long before the industrial revolution. Clearly the rise of industry isn’t the event that initially gave gold value. Likewise, there are countless other materials with industrial uses, but their value is no where near that of gold.

They may tell you that gold is always in demand because it is used in jewelry. So are silver, copper, bronze, gemstones, and glass. Plus, jewelry is a luxury, not a necessity, so it is a mistake to rely on demand from jewelers to maintain a commodity’s worth. Some people use string and seashells for jewelry, yet no one is paying $1700 per oz for seashells.

A goldbug might counter that gold is rarer than other jewelry materials, and this gives it worth. Now would be a good time to remind them that bitcoin is also limited, and rarer than other cryptocurrencies. If rarity drives value, then gold and bitcoin reap that benefit equally.

Often a goldbug will explain that gold has certain properties that make it valuable. For example, gold is highly malleable, it conducts electricity, it is biocompatible, and resistant to corrosion. Well, bitcoin also has valuable properties. It is secure, it can transfer wealth anywhere in the world within minutes, it acts as a store of value, and is easily transportable. If useful properties are what gives gold value, then bitcoin also benefits from its useful properties.

By now the irritated goldbug may remind you that people want gold, and have always wanted it since the beginning of civilization. This is a great point. High demand certainly makes a commodity valuable. In fact, there may be no better place to see this dynamic at play then on the yearly bitcoin price chart. People have wanted gold for a long time, and that is ultimately what gives it a high value. Likewise, people want bitcoin now, as we can see from its value today.

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Cybersecurity technical writer and crypto enthusiast.

Unconventional Crypto
Unconventional Crypto

Cryptocurrency, cybersecurity, and their real world impacts. Speculative predictions and detailed analysis. Plain talk on complex topics.

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