If you’ve ever dared to criticize the crypto world, chances are you’ve received some charming reprimands. You’ve probably been told to “enjoy staying poor” because you’ll “never make it”; Her criticism was likely dismissed as mere “FUD” (Fear, Uncertainty, and Doubt); and you may have been informed that in reality you are nothing more than a “salty no-coiner”.
But there’s another, slightly more sophisticated take on counter-criticism that’s finding its way into my inbox with increasing regularity these days. It usually starts with something meant to appease — some sort of agreement that crypto is immoral, a scam, or some version of a Ponzi scheme. But then it quickly changes course to explain that none of this applies to Bitcoin.
Bitcoin, bitcoiners tell me, is not crypto. And, you know, crypto bad, bitcoin good. Really really good.
“Bitcoin is a lifeline for so many people around the world,” one altruistic bitcoin owner told me recently. “Please stop confusing it with crypto, which is morally reprehensible.”
I recently suggested that one way to practice the art of “intellectual humility” is to “steal” your opponents’ position—that is, instead of finding their weakest points and arguing against them, present the strongest version their arguments. And so I’ll try to use that technique here before explaining why I think they’re wrong.
Why are the “bitcoin maximalists” — the purists who argue that bitcoin is the only cryptocurrency that has value — making this claim? They explain that the organic way in which Bitcoin came into being cannot be replicated and that while Bitcoin can be copied, it always has a first-mover advantage and therefore cannot be sold.
They also point out that there was no market for Bitcoin when it was invented, and so the network was not run for profit, but by people who believed in the value of the system — unlike later coins, some of which were issued by large companies. Bitcoin did not emerge to make money, but out of a libertarian internet subculture that believed technology, particularly cryptography, was key to driving social and political change.
Maximalists also say that Bitcoin’s incentive mechanism, the energy-intensive proof-of-work mining process that rival Ethereum moved away from just last week, is the only way to ensure a truly decentralized system.
But while you can see why bitcoiners might be interested in distancing themselves from the plethora of scams and bugs that have popped up in cryptoland, their arguments don’t stand up.
First, it doesn’t matter where bitcoin came from – the people pushing it now have the same financial incentives as those pushing other crypto tokens. Satoshi Nakamoto, the creator of Bitcoin, might have intended it to be used as money, but that doesn’t make it so – it doesn’t meet any of the necessary criteria and instead operates in a pyramidal structure that relies on constantly recruiting new members.
Second, bitcoin is not actually decentralized — not only do miners group together into “mining pools,” but wealth is hugely concentrated. On Tuesday, MicroStrategy announced it had bought an additional 301 bitcoins, bringing that company alone to nearly 0.7 percent of the total supply.
Third, a “first mover advantage” doesn’t always last. Other crypto tokens already have various properties that Bitcoin does not have, and there has been renewed talk of “flipping” where Ethereum’s value overtakes that of Bitcoin as the former have switched to a less carbon-intensive form of mining.
After all, there isn’t even a consensus on what bitcoin is. Most of them are digital coins, also known as “BTC”, which are currently changing hands at around $19,000. But there are other versions that have split off, such as Craig Wright, the man claiming to be Satoshi, who says BTC is a scam.
The real reason bitcoin maximalists want to separate bitcoin from the rest of crypto is to create the illusion of scarcity in a world where none exists. CoinMarketCap now lists more than 21,000 different crypto tokens that bitcoin maximalists call “shitcoins.” Of course they do – if there is infinite supply, how can there be any value? This is still the core problem of crypto, and bitcoin cannot solve it.
That’s not to say that there aren’t some crypto projects and tokens that are better than others. But a spade, no matter how shiny, is still a spade. And Bitcoin, I’m afraid, is still crypto.