The Most Famous Bitcoin CriticsLaura
Bitcoin has been controversial since its inception. The concept of digital scarcity, trustless social systems, and distributed ledgers is seen as innovative by some and superfluous by others. Some of the brightest minds in business and economics fall into the latter group.
Here are some of Bitcoin’s most noteworthy critics and the underlying reasons for their scepticism.
The world’s most successful investor has built his career by focusing on a simple idea – buying assets for less than they’re worth. Figuring out how much an asset is worth, in Buffett’s opinion, is a matter of cash flows. His core investment has stable and predictable cash flows that are unlikely to be disrupted for decades.
This is why an asset that doesn’t provide cash flows, such as Bitcoin, is seen as worthless. In fact, Buffett once called Bitcoin “rat poison squared,” due to its disruptive impact on capital markets.
However, Buffett’s scepticism stems from the fact that technology isn’t his core competency. Buffett has previously missed the e-commerce, digital advertising, and social media trends. He once admitted that not buying Google and Amazon was a mistake. Bitcoin could well be his latest mistake in this arena.
Stockbroker and investment commentator Peter Schiff has been one of the most vocal critics of Bitcoin in recent years. Unlike Buffett, Schiff isn’t bothered by Bitcoin’s lack of cash flows. In fact, much of his work has focused on gold as an investment. However, Schiff disagrees with Bitcoin’s comparison to “digital gold.” He considers Bitcoin volatile and speculative. “ It should be clear by now that buying Bitcoin is gambling, not investing,” he said in his latest tweet.
This tweet was also triggered by the fact that Elon Musk’s comments had a negative impact on Bitcoin’s value.
Elon Musk (maybe)
Unlike the other critics on this list, billionaire tech entrepreneur Elon Musk actually owns Bitcoin. According to his statements, it seems Musk owns Bitcoin both in a personal capacity as well as on his company’s balance sheet.
However, Musk expressed concerns about Bitcoin’s escalating environmental impact. While his company has suspended Bitcoin payments, it continues to hold the asset on its balance sheet.
Nouriel Roubini (changed his mind)
Economist Nouriel Roubini, professor of economics at New York University’s Stern School of Business was an early critic of Bitcoin. Roubini predicted Bitcoin’s doom, comparing it to previous attempts at digital currencies and e-coins that had failed.
However, the fact that Bitcoin has survived for over 12 years and rapidly gained value has convinced him to change his mind. Last year, Roubini said Bitcoin “may be a partial store of value.”
Bitcoin’s uniqueness makes it relatively controversial. Critics argue that it may have fundamental flaws that make it unsuitable as a store of value or global digital currency. Some of these criticisms are justified and encourage the community to make changes. The environmental impact, for instance, is being mitigated by renewable energy mining operations.
Only time will tell if other criticisms are justified. For now, the orange coin remains valuable to millions of users and developers across the world.