The development of cryptocurrencies provokes a predictable yet interesting reaction on the part of the advocates of the traditional financial system who see Bitcoin as a threat to their current state.
With the help of the example of the recent Facebook post by Oleg Tinkov, we will try to analyze the arguments of bankers against cryptocurrencies, what these arguments are based on, and how accurate the critic is.
Review of Oleg Tinkov’s anti-cryptocurrency talking points
“The cryptocurrency boom and all the hype were due to the three phenomena:
- Generation Z, who dream about living in a freer world, rapid development of IT technologies and geek society;
- People believe in fairy tales and in the possibility to get rich FAST effortlessly: Ponzi schemes;
- Fraudsters of different kinds and criminals, who use it as a convenient way to transfer assets.”
If we take a look at the charts of Bitcoin capitalization, we will see that due to the growth started in spring 2017, the capitalization of the currency has not decreased below $100 billion for two and a half years and is now above $237 billion.
What was the driving factor of growth? Bitcoin reached its all-time high ($20000) in December 2017 after the launch of Bitcoin futures contracts at CME and CBOE.
The launch on Wall Street made cryptocurrencies more attractive for investors. But there were not only speculative reasons. For example, Japan accepted bitcoin as a legal payment method.
But Tinkov overlooks these facts and brings everything to people being naïve and criminals.
“Not to mention that for the last two years, cryptocurrency has replaced banks as a top priority for hackers. The security measures of cryptocurrency exchanges are much weaker than those of banks or don’t exist at all. But since cryptocurrency is out of the legal field, victims of cyberattacks have no one to address to.”
Unlike the security systems of banks, the security system of cryptocurrency is absolutely transparent and depend on nobody but its owner.
In the case of traditional currencies, the responsibility for safety is handed over to a third party, which, in turn, take away your right to control your assets. Is it a fair trade? The establishment of cryptocurrency speaks for itself — millions of people are not Ok with the social contract.
“No one cares that it has no sense to use an asset with changing value for buying and selling. In the case of Bitcoin, it’s an instrument for speculation rather than a payment method. But fools bought it.”
Bitcoin is highly popular at exchanges due to its high volatility. Although, it’s not about cryptocurrencies alone: dollar is used in speculations a lot as well, but its real usage as a payment method is out of the question.
“And the main one: if you’re a LAW-ABIDING HONEST citizen, you have nothing to hide and need neither anonymity nor financial transactions that are out of control of the government.”
The key question is: what does a normal person making regular purchases need a governmental control for?
An old conflict between the terms “person” and “citizen” are brought by Tinkov down to the presumption of guilt of anyone who does anything with no supervision of governmental authorities. The premise is simple: if government cannot control cryptocurrency, those who use it are not law-abiding honest persons. This is a premise of a demagogue who draws water to the mill of government.
“Life has long knocked out the folly like this of the heads of our generation, which was brought up by the lyrics of John Lennon suggesting to imagine the world with no religion, countries, and possessions.”
For sure. And the folly was replaced by the desire to protect the capital earned in the traditional financial system, and governmental institutions ensuring the existence of such bankers as Tinkov himself. This desire is being reflected in criticism of the growing competitor.