Bitcoin Believers aren’t wrong, but don’t mistake their faith for fact

everyone planet invest bitcoin piggy bank 2

Woe is he who talks ill of Bitcoin.

This lesson I learned over the weekend, after publishing a column explaining why “everyday people” – those of us who have not yet leapt into the abyss of cryptocurrencies – should avoid the insanity of the world’s most popular digital currency, unless they’re willing and/or able to take major risks.

A handful of vocal Bitcoin Believers took to the comment section to lament my arguments. I don’t understand how Bitcoin works, they said. That, or I’m railing against Bitcoin out of jealousy and spite for those who are swimming in the digital ether like Scrooge McDuck – I didn’t invest, so I’m whining about it.

Is Bitcoin the innovative, wise investment those who have bought in claim it to be?

To the Believers, Bitcoin is the future – it’s more exciting than any other technology since the advent of the Internet itself. And anyone who thinks otherwise is a ignoramus. You don’t have to have faith, they say – it’s all based on math!

Fair enough – perhaps I am a vindictive troll who reacts to the forethought and success of others by whining like “a woman on her period,” as one witty Bitcoin faithful so tactfully put it. But who cares about that? The important question is this: Is Bitcoin the innovative, wise investment those who have bought in claim it to be? The answer – depending on which facts you want to highlight – may be yes.

First, let’s briefly talk about what Bitcoin is. Warning: This is about to get nerdy. Sorry.

At its heart, Bitcoin is a protocol in the same way the Web (HTTP) and the Internet (TCP/IP) are protocols. Whereas HTTP dictates how Internet-connected computers “talk” to each other, the Bitcoin protocol allows for the encrypted, anonymous transfer of funds (i.e. a unit of value) across the Internet.

To take the Internet comparison further, just as the Internet allows for the free flow of information, Bitcoin allows for the free flow of “money” in ways impossible before its invention. Use a legacy banking system, PayPal, or anything besides cash in an envelope, and you’re looking at fees, delays, and headaches. Bitcoin solves all of this, offering the possibility for instant fund transfers to anywhere in the world, zero or extremely low transaction fees (even when transferring millions of dollars worth of Bitcoin), and the ability to send someone Bitcoin (or fractions of a Bitcoin) simply by knowing their Bitcoin address – no other account information, names, or routing numbers needed.

On top of all these benefits, the Bitcoin protocol is based upon extremely strong encryption and a public ledger system (called the “blockchain”) that uses distributed transaction confirmations to ensure the integrity of every single Bitcoin transaction. (Told you it would get nerdy …)

Bitcoin Believers will tell you that no one really knows Bitcoin’s true potential, just as the Vint Cerf and Tim Berners-Lee never envisioned what the Internet and Web would become when they created the respective protocols on which these world-changing technologies are based.

Combine Bitcoin’s presumed potential for transforming the stodgy universe of finance with its ability to make early investors wealthier than God, and one can fully understand the indignant enthusiasm the Bitcoin Believers have for their dear digital currency.


All snark aside – even if you aren’t entirely convinced that a single Bitcoin should be worth $1,000 or more, it’s impossible to argue that the Bitcoin network lacks depth, sophistication, and the disruptive power of a bull in a china shop.

When it comes to investing in Bitcoin, then, the wisdom of doing so all depends on how much you believe in Bitcoin’s potential. Will it do to banking what the Internet did to the publishing, music, and movie industries? Or is it simply a complicated, over-hyped Monopoly money for libertarians and other super-nerds, a plaything that isn’t really worth a dime?

The answer is anyone’s guess. What I will say is: The more you read about Bitcoin, the harder it becomes to write it off as a silly diversion.

Even if it is a mere game, Bitcoin is one that anyone can play without risking much at all. As one commenter pointed out, you can invest tiny sums into Bitcoin because each single Bitcoin can be broken into tiny fractions (up to eight decimal places), known as Satoshis (after the Bitcoin protocol’s shadowy inventor, Satoshi Nakamoto.) This means you don’t need to bet the farm on Bitcoin – if you want to invest just $1, you can. If the price of Bitcoin plummets (as it’s known to do), so what? If it skyrockets to $100,000 per Bitcoin, hey, you made $100! Not only that, but your investment may further ensure that Bitcoin becomes a game-changer rather than a game.

As I’ve said before, Bitcoin is extremely exciting – if you have faith not only in its potential, but in its ability to achieve that potential. For that to happen, we need Bitcoin Believers; we need people who freak out anytime anyone doubts this potential. Without Believers, without investors – without merchants and exchanges and an ever-expanding Bitcoin ecosystem – the dream of Bitcoin will never come true.

Speaking of price fluctuations, let’s finish this thing off with the elephant in the room: volatility. The Bitcoin exchange rate fell from around $1,055 on Friday to about $600 on Saturday night, before leaping back up to a bit over $920 at the time of this writing (Monday evening). Twitter’s stock price over roughly the same period, by comparison, started at $45.59, fell to a low of $45.02, then climbed back up to a closing price on Monday night of $49.14.

Bitcoin allows for the free flow of “money” in ways impossible before its invention.

In other words, Bitcoin is extremely volatile, even compared to a new, hot stock. But this does not mean Bitcoin is inherently unstable. As Timothy B. Lee argues in the Washington Post, the spastic fluctuations in Bitcoin’s exchange rate are likely due to the immaturity of the currency. Nobody really knows what a Bitcoin should be worth, so we’re “arguing” that point in the Bitcoin markets, causing the price to jump and dive. But as the true value of Bitcoin becomes more apparent and regulators make their intentions known, its price will level out.

“… A clearer idea of Bitcoin’s future value will make its present price much more stable,” writes Lee. “There will be much less room for speculative bubbles based on predictions of rapid future growth, or for sudden crashes based on hints of bad news from regulatory authorities.”

Makes sense, right? Right.

Despite all the giddy excitement around the ingenuity of Bitcoin – despite all of Bitcoin’s potential potential ­– I stand by my original take: Investing in Bicoin right now is extremely risky, and the only way to mitigate that risk is to only put in money you are willing to lose. Maybe that’s $920, maybe that’s $1 million, maybe that’s $0.

Even if your Bitcoin investment doesn’t evaporate in a puff of market fear, however, one must understand that they are betting on an idea – one that needs people to believe in it, or else it evaporates. The same was true of the Internet, and we all know how that’s worked out so far. But can Bitcoin force a complete overhaul of the way the financial industry works, as its proponents argue? And even if it can, should it?

Nobody knows the answers to these questions because nobody knows what Bitcoin will become tomorrow, even if they can explain what it is today.

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.


5G phones make a lot of promises. Here’s what to really expect

There has been a lot of marketing copy expounding the potential benefits of 5G networks, but a lot less on the practical implications of 5G smartphones. There's a reason for that.

It's not all free money. Here's what to know before you try to mine Bitcoin

Mining Bitcoin today is harder than it used to be, but if you have enough time, money, and cheap electricity, you can still turn a profit. Here's how to get started mining Bitcoin at home and in the cloud.
Smart Home

Amazon patents a technology to help Alexa fight fake voice attacks

Amazon filed a patent this month for a new technology that looks like it would help its digital assistant Alexa fight fake voice attacks that could potentially fool Alexa's biometric security protocols.

Change your mouse cursor in Windows with these quick tips

The standard mouse cursor is boring, so change it! With this guide on how to change your mouse cursor in Windows, you can choose to use one of Microsoft's pre-installed cursors or download something a bit more extravagant.

‘Fallout 76’ may have online multiplayer but it’s still a desolate wasteland

"Is Fallout 76 an MMO?" That depends on who you ask. Critics and players often cite its online multiplayer capabilities as a reason it qualifies. Yet calling the game an MMO only confuses matters, and takes away from what could make…
Digital Trends Live

Microsoft has #*!@ed up to-do lists on an epic scale

Microsoft has mucked up to-do lists on a scale you simply can’t imagine, a failure that spans multiple products and teams, like a lil’ bit of salmonella that contaminates the entire output from a factory.

As Amazon turns up the volume on streaming, Spotify should shudder

Multiple players are all looking to capitalize on the popularity of streaming, but it has thus far proved nearly impossible to make a profit. Could major tech companies like Amazon be primed for a streaming take-over?

Throw out the sandbox. ‘Red Dead Redemption 2’ is a fully realized western world

Despite featuring around 100 story missions, the real destination in Red Dead Redemption 2 is the journey you make for yourself in the Rockstar's open world, and the game is better for it.

‘Diablo Immortal’ is just the beginning. Mobile games are the future

Diablo fans were furious about Diablo Immortal, but in truth, mobile games are the future. From Apple and Samsung to Bethesda and Blizzard, we’re seeing a new incentive for games that fit on your phone.
Movies & TV

He created comics, movies, and superheroes. But Stan Lee lived for joy

Stan Lee was a creator, a celebrity, an icon, and beneath it all, a real-life good guy with all the same human qualities that made his superheroes so relatable. And his greatest joy was sharing his creations with the world.

Brian Eno sets out to change music (again) with Bloom: 10 World

We always felt that Bloom was a musical system that could be developed further -- it was as if we’d built a CD player and only ever released one CD. For this release, we’ve created ten new worlds, starting with a reimagined version of…

Can two operating systems coexist? The Pixel Slate thinks so

The Pixel Slate is a 2-in-1 device like no other. It’s not the most polished product we’ve ever used, but Google has laid the foundation for letting mobile and desktop software live side-by-side in peace.

Why commercials in Android Auto could turn your dashboard into a dumpster fire

Google announced some tweaks to the Android Auto experience, focused on making messaging and media easier, but I worry about the future of the platform. For better or worse, there’s a real chance our dashboards could turn into dumpster…

These are the best video games you shouldn't leave 2018 without

Developers showed up with a number of amazing games this year. Each capitalized on something unique but there's always one that outdoes them all. Here are our picks for the best video games of 2018 and game of the year.