Bitcoin – A Losing Investment?

bitcoinRecently I read an article on Splinter News charmingly named “Hey Idiots–You’re Gonna Lose All Your Money on Bitcoin, Idiots”. No, really, as of the writing of this blog post, that is the actual, honest to God name of the article, written by one Hamilton Nolan and published on Nov. 28th 2017. It goes on to enlighten us about how everyone who has invested in Bitcoin is doomed to lose their money, opening with a rather beautiful little passage:

Bitcoin is a fake and made-up scam. Can you articulate what it is? “Bullshit jargon that means nothing”-you. Hell no.

Ah, already we’re off to a good start. Two sentences in, and two things are already painfully obvious to us. First, the person who wrote this piece has no clue how to write at all, because these four, short sentences make absolutely no sense, grammatically speaking. In his second sentence, “it” doesn’t refer to anything. Can I articulate what what is? Bitcoin? A scam? What are you talking about? His third sentence doesn’t even have a verb in it! Still, attacking a dude’s grammar is low, even when he’s a paid writer, so let’s focus on the other important take-away here, which is that the writer clearly believes that he’s far smarter than us, and that he’s here to enlighten us to the absolute truth that we’re somehow oblivious to. Aren’t we lucky to have finally received a shepherd to guide us dumb sheep? This notion of perceived superiority is further reinforced in the closing sentences of the article.

Remember what I told you. Remember how hard headed you were. Remember who was stupid (you) and who was smart (me).

At this point you might be thinking “Hey, this article kinda sounds like satire. No writer can actually be so delusional, right? That’s hilarious!” And while you’d be right that it’s extremely funny, unfortunately, Splinter News is a legitimate news source (about as legitimate as all the others, I guess). This was written seriously, with the full intent to enlighten us about how stupid we are for investing in Bitcoin, and then some editor looked through and was like “Yeah, y’know what, that’s actually good enough to publish on our official website.” But hey, maybe I’m judging too harshly! Maybe the dude has some kind of amazing insider info about how Bitcoins really ARE a scam, and this is just his crude way of portraying his exposé? Let’s take a look at his arguments and try to deduce where our wise master is coming from.

Here’s a little history lesson for you. Some guy, or somebody, invented a thing called bitcoin, on the internet. Nobody knows what it is but you can buy drugs with it.

Hamilton Nolan here may be reading different history books from me, because the ones I’m into tend to be a bit more specific than “Some dude somewhere did something and nobody knows what it is”. Also, for the record, Mr. Nolan, just because you don’t know what Bitcoin is doesn’t mean that nobody knows. It’s a virtual currency. You know, like the kind that literally every single government on Earth has. Or did you really think that there was a safe somewhere with 75 trillion dollars just sitting there collecting dust? Fact of the matter is that only about 5 trillion dollars actually exist as physical money globally, and the rest of it is in various virtual currencies. The only difference between the virtual dollars you’ve got in your bank account and the virtual bitcoin I’ve got in my e-wallet is that I can’t go to a bank and requested to draw one physical bitcoin. Bitcoin doesn’t work with banks, that’s kind of the point. If you’re still confused about this, please read The Sun’s handy-dandy guide and, um, feel free to message me with any questions. I’ll be more than happy to help.

Still, Hamilton Nolan continues, explaining that there are two kinds of investors – the people who aren’t touching bitcoin, and the idiots.

Then there are the idiots—like you—who say, “Where I can but some ‘Bitcoin’ to get rich, like all my ‘gamer’ friends?” A wise man once said “What goes up must come down” and another, wiser man once said “All This Bitcoin Stuff Is Fake.” It’s not real, folks.

You know, I would assume that making jokes about “haha those dumb no-life gamers” was an activity rightfully left behind in the late 90s, but here Mr. Nolan is, ready to prove to us that he’s not changing with the times and he’s happy with that. The “All This Bitcoin Stuff Is Fake” line, by the way, leads to the only source in the article, so you know it’s got to be important. Who is this “wiser man” that Hamilton Nolan is referring to, who prophesized the death of Bitcoin? Bill Gates? Elon Musk? Dr. Stephen Hawking? Nope, it’s someone even smarter than all of these men combined! It’s… Hamilton Nolan? Yeah, the only source in this article leads to… Another article by the same writer. I’m not a college professor, but I’m not sure that’s how you write an argumentative piece. But then again, as he has repeatedly established, Mr. Nolan is the most enlightened person in the observable universe, so I guess it’s safe to take his word as an absolute, indisputable fact.

For ten thousand dollars I’ll go buy myself a Jet Ski with bad ass stripes on the side. Okay? And you buy yourself a Bit coin. And we’ll see who has more fun.

bitcoin2Well, what do you know. Mr. Nolan believes that people are spending $10,000 buying Bitcoin. Which, of course, is completely understandable considering the fact that he neither knows a thing about Bitcoin nor is willing to learn. So I’ll gently and respectfully nudge him and inform him that most people don’t actually BUY bitcoin – and those who do don’t buy anywhere near one full bitcoin. Yes, you can totally spend a few bucks to buy 0.025 of a bitcoin, and then use that in certain marketplaces and exchange it for goods and services. Also, the vast majority of bitcoin are mined, not bought. And no, Mr. Nolan, before you start asking about how bitcoins occur naturally in mines, they don’t, it’s just an expression. Go look it up, that is your homework.

Ten thousand dollars is a lot of damn money, unlike a “bitcoin” which, who knows how much money it will be a week from now?

Haha, yeah, because regular, government-controlled currency never takes a nosedive. Currency values fluctuate, that’s kind of how it works. Right now, one bitcoin costs $10k, and one week from now it might cost $1k, or it might cost $100k. That dollar that you seem to be worshipping so much, the kind that will supposedly buy you that jetski, recently dropped in value due to President Trump’s shenanigans, and let’s not even talk about the 2008 financial crisis.

Now, the truth is that Bitcoin isn’t infallible. It’s the most popular cryptocurrency, but it’s far from ideal – for example, if you use your credit card to buy something, and then the item never arrives, you can call your bank and have them revoke the charge. However, if you buy something with Bitcoin and the item never arrives, tough luck. The fact that you also need to buy yourself a special, mechanical and encrypted wallet for bitcoin is also an inconvenience. But these are actual genuine concerns coming from someone who understands what bitcoin is. Hamilton Nolan has decided that not only does he not understand it at all, he doesn’t want to, and on top of that is willing to broadcast his ignorance to the masses, repeatedly. But the fact remains that if you had invested $1000 in Bitcoin a year ago, you would’ve been able to cash out over a million today. And I think that I’d be able to have a whole lot more fun with my $1 mil than you with your $10k jet ski.