In a contributed post by Bill Harris found on Recode.net, the former CEO of Intuit said Bitcoin is the greatest scam in history and warned people not to fall for it. It’s a colossal “pump and dump” scheme, says Harris.
I’m tired of saying, “Be careful, it’s speculative.” Then, “Be careful, it’s gambling.” Then, “Be careful, it’s a bubble.” Okay, I’ll say it: Bitcoin is a scam.
The former CEO of Intuit and founding CEO of PayPal and Personal Capital, said in a pump-and-dump game, as he suggests Bitcoin as such, promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices. But Harris contends that some cryptocurrencies are just straight up pure frauds. Ernst & Young estimates that 10 percent of the money raised for initial coin offerings has been stolen.
The losers in the cryptocurrency game, according to Harris, are ill-informed buyers caught up in the spiral of greed. (Says the man worth millions of dollars.) The result is a massive transfer of wealth from ordinary families to internet promoters. Harris says “massive” is a massive understatement because the 1,500 different cryptocurrencies now register over $300 billion of “value.”
Harris says it helps if one understands that Bitcoin has no value. He says that promoters of Bitcoin claim cryptocurrency is valuable as (1) a means of payment, (2) a store of value and/or (3) a thing in itself; but yet none of these claims are true.
Bitcoin is absurdly wasteful of natural resources. Because it is so compute-intensive, it takes as much electricity to create a single bitcoin — a process called “mining” — as it does to power an average American household for two years. If bitcoin were used for a large portion of the world’s commerce (which won’t happen), it would consume a very large portion of the world’s electricity, diverting scarce power from useful purposes. –Bill Harris via Recode.net
But at the end, is the heart of Harris’ actually beef with Bitcoin.
It’s the job of the SEC and other regulators to protect ordinary investors from misleading and fraudulent schemes. It’s time we gave them the legislative authority to do their job.
Bitcoin has proven its almost impossible to regulate. So Harris and other elites are simply angry they can no longer call the shots anymore. Harris also argued the Bitcoin is being used in “crimes” and it surely is. We would implore him to look into how many dollars are used in crimes (especially ones committed by the police in the form of civil asset forfeiture) and then reevaluate that statement made to somehow try to convince people that because Bitcoin has been used in crimes its bad. By that logic, all dollars are bad too. But he beats himself with his own mental gymnastics with this one. If criminals use Bitcoin, then it does have value.
Forbes has laid out their own argument as to why Harris is wrong, and Bitcoin is not actually a scam, and it’s very similar to what came to the forefront of our minds.
First of all, Bitcoin is undoubtedly useful as a means of payment in specific scenarios where there are no other options available to the user. For example, Amazon Mechanical Turk workers who find it difficult to transfer value out of the system often turn to bitcoin by way of Purse.io. Harris even admitted the usefulness of Bitcoin for value transfer later in the post when he talked about criminal use of bitcoin as a means of payment.
Whether you find a specific use of Bitcoin morally acceptable does not have any impact on whether that use case exists in the real world. Additionally, what constitutes as illegal commerce can vary wildly throughout the world (not to mention history).
What do you think? Let us know in the comments!
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