This week crypto was the topic in the section “And now it’s over” during The Evening Show with Arjen Lubach. A number of good points are made here, but what struck me was that Lubach’s argument relies on assumptions that are actually too short-sighted. And of course, writing for Crypto Insiders, I can’t just let this pass me by!
The success of crypto has drawbacks
Starting with a point with which I completely agree; the “get-rich-quickcrowd that has engulfed crypto in recent years. In recent years, the prices have been seen rising sharply and people becoming filthy rich. And that is of course interesting for the people who don’t know much about crypto yet.
That’s why there’s a market for videos and other content that make it seem like you too can become filthy rich simply NOW! to buy. I fully agree that this is an ugly side of crypto, but I also believe that it is only a matter of time before this hype dies down. In the end, it will turn out that it is not at all a certainty that your investment will quickly shoot into the plus.
Another reason for Lubach to end crypto is the fact that people are being scammed. He mentions Xpose, a crypto project that includes the Dutchman Vasco Rouw. People lost a lot of money with this (BOOS recently called on these people to file a report, more info here). But is it fair to put the rest of the crypto sector in a bad light as well? There are plenty of projects that actually make people’s lives better.
The bitcoin transaction
But the point that comes up most often as a criticism of Bitcoin (BTC) and crypto is energy consumption. Yes, a bitcoin transaction consumes a lot of power, especially compared to a transaction via the Visa network. But one forgets here that a transaction on Bitcoin is settled immediately, where Visa depends on all kinds of surrounding infrastructure to actually send a transaction from point A to B. Moreover, what is a bitcoin transaction anyway? The Center for Alternative Finance at the University of Cambridge explains why the comparison between a Visa and bitcoin transaction cannot simply be made:
“Bitcoin trades may contain hidden semantics that may not be immediately apparent. For example, a single transaction in Bitcoin can bundle hundreds of smaller payments to individual addresses. It can also correspond to a settlement of thousands of off-chain transactions that have taken place on second-tier solutions (e.g. opening and closing channels in the Lightning Network). It could also potentially represent millions of timestamp data using open protocols such as OpenTimestamps.”
Yes, it is a young sector where a lot can still be improved in terms of legislation and regulations. But no, bitcoin and crypto in general are too complicated to be covered in a short item of 8 minutes and 40 seconds debunk† For those who want to learn more about Bitcoin, and don’t have the primary goal of buying a Lamborghini tomorrow, I recommend the book The Bitcoin Standard as a starting point. You can also take a look at the Crypto Insiders Premium environment, where we take a serious look at crypto and where you can learn a lot.