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When people are young and immature, they tend to react in extreme ways to things. They fly off the handle in response to the slightest criticism, real or imagined, and find praise and encouragement from the most neutral of phrases. The lack of an outright “no” becomes “...but Dad said it was okay!” in the blink of an eye, and mentioning something without condemning it is seen as a ringing endorsement. If that kind of overreaction is seen as a sign of immaturity then, based on this week’s evidence, the Bitcoin community is still immature despite being comprised of some very smart minds.
In case you missed the news concerned, here is what happened. An old man talked about Bitcoin in the way that many old men do. He said essentially that he didn’t get it, and that the major problem was that it was “backed by nothing.” As with all of the old men before him (and many young ones too) he completely ignored that the same thing is true of every modern conventional currency.
Dollars, euros, yen and rubles are also backed by nothing and have value because people believe they do. If anything it could be argued that because of the computing power and trustless account network behind Bitcoin it has more backing it than the others, not less.
Still, that mild, somewhat confused criticism was enough to throw some in the bitcoin community into a tizzy, sensing that their baby had been slighted. That was nothing, however, compared to the reaction to what the old man said next: "However as an accounting unit, these 'coins' or whatever are they called, they can be used, and their adoption becomes wider and wider. As some kind of unit in some account, probably, it's possible." That weak, mealy-mouthed “endorsement” was enough to cause paroxysms of delight in some supporters of crypto currencies. The speaker of those words, you see, was Vladimir Putin.
I suppose if you think that, as he is a product of the Soviet system, every word uttered by the Russian Premiere should be parsed for its hidden meaning in the way that we did things in the days of the Politburo, then that makes some kind of sense. Merely mentioning digital currency could be taken as a message of sorts. Do you really think, though, that Putin mentioning Bitcoin is a sign that Russia is about to embrace it, or any other virtual currency whose very existence is, according to some, designed to take the power over money away from government and hand it back to individuals? That would be, to say the least, somewhat out of character.
I don’t speak Russian despite having lived in the country for a while so I could be missing something, but the translations I have read seem to me to point to something else. Putin, it seems, doesn’t understand Bitcoin but, like many others around the world, is vaguely aware that the technology behind it is potentially useful. Also like many others, he is looking for, or rather tasking others to look for, ways to use it to his advantage.
I suspect that, when all is said and done, the Russians will maintain their ban on their people using Bitcoin, right up until it becomes clear that banning the internet is a hard thing to do, and that said ban has been regularly circumvented. At that point, either a crackdown and confiscation, or tolerance with some kind of regulatory oversight will be the only options. We can hope for the latter, but history tells us that the former is more likely. In essence then, nothing has changed.
On a personal level this overreaction in internet comments sections and on social media to every piece of news, good or bad, is becoming a little tiresome. Putin criticizing Bitcoin, seemingly without a basic understanding of it, should come as no surprise. On the other hand though, neither does his mentioning it in the context of a vague desire to co-opt the technology mean that the Russian government is about to liberalize their rules on cryptos.
With maturity comes respect, and so long as Bitcoin users and followers continue to overreact to everything, the respect that the currency deserves as a potentially transformational idea will be withheld by the vast majority of people. Maybe it’s time to make a conscious effort to tone down the rhetoric and stop scaring away the neutral observer.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
