Oh man, I just read this whole thing, and I'm sad how it turned out. The article starts out REALLY well, going into the major benefits of Bitcoin, what sets it apart from government currencies and privately owned virtual currencies (like Facebook credits), and does a nice job describing it's potentials and why people are so interested in it. The first half of the article could well be used to promote Bitcoin to new people.
But then half way down, the article takes a very sad turn for the (at this point) expected old misconceptions. We have
- Bitcoin is deflationary, so it will become worth so much that no one will want to buy it, so it'll be worth nothing. Literally, and I quote, "The biggest problem with bitcoins, however, is conceptual: if they succeed, they fail." In other words, if my bitcoin stash becomes worth $100mil, it will worth $0, because no one will want to buy it at $100mil (I hear this contradiction too often)
- Bitcoin is too difficult to use for users, who have to learn how to use passwords and encrypt files (it's arguable whether someone can be taught to use a good password and copy/paste a file to make a backup)
- Misconceptions about bitcoin tech, such as the claim that every user has to download the enormous and ever increasing blockchain file
- The rather strange statement that Bitcoin is a commodity AND a currency, and the US Dollar is just a currency, when the ONLY difference between them is that inflates based on an algorithm, and the other based on what a few people in charge think is best. T=Both are nothing but digital bytes of data, supported by nothing but our collective trust in the system (and speculators).
- The same old claim about deflation being bad and that people won't spend their money, ignoring that people spend money on electronics, which are very deflationary (and good point about the USD being deflationary if kept in a high interest savings account, too)
- The claim that botnets will be the main way to mine for bitcoin, and this illegal method will overtake most mining operations, despite ASICs soon making botnet mining be almost completely worthless.
- And finally, the same old often-repeated misconception of Bitcoin being a thing, or a piece of software, that "although is great, has flaws, and will be replaced by something better." Bitcoin is a protocol, and a very democratic one at that. If something better does come along, it won't replace Bitcoin, it will be integrated into Bitcoin. But only is the majority of users and miners agree that it is better.
Reading this article is like reading a nicely summarized list of all the most popular misconceptions about Bitcoin. But, thankfully, at the very end, there is a quote that made me smile:
Bankers in general, and central bankers in particular, tend to be extremely conservative, and anything which could facilitate money laundering or other illegal transactions is going to have a lot of difficulty getting traction.
If you want to know why that's funny, just read the recent news about big banks getting busted for money laundering and illegal transactions, and then being too big to sue. The claim that banks are wary of these illegal things, instead of embracing them as a way to make money, is rather amusing.
