7 Things Every Misinformed Person Says About Bitcoin

Bitcoin enthusiasts have all heard strange and inaccurate phrases from their loved ones, see which ones topped our list.

AccessTimeIconMay 29, 2014 at 7:45 p.m. UTC
Updated May 9, 2023 at 3:02 a.m. UTC
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It's not always easy to be an early adopter of a disruptive technology like bitcoin.

In addition to dealing with bitcoin’s price volatility, sometimes rough-around-the-edges user applications and the uncertainty about the digital currency’s regulatory standing, as pioneers we also have to answer to our friends and families about our interest in this new technology.

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    More often than not, people with only a cursory knowledge of bitcoin tend to be grossly misinformed. To their credit, the technology underlying bitcoin is very complex. It's no secret that as bitcoin enthusiasts, we acknowledge the need to more effectively educate the general public about this new digital currency so that we can debunk the myths that plague bitcoin’s reputation.

    With that said, it is almost dumbfounding how predictable it is to hear certain phrases from our loved ones whenever the topic of bitcoin arises. These phrases are usually founded in concern, curiosity, and sometimes just plain ignorance, but every member of the bitcoin community has heard them at least once:

    1. "So if there aren’t any physical coins, it’s not real money, right?"

    The concept of a purely digital currency is a bit tough to swallow for some people, even in 2014.

    Computer scientists have been trying to solve the double spending problem for decades, and thanks to Satoshi’s ingenious block chain invention, the technology has finally allowed the financial world to catch up with the rest of society's digitally focused culture.

    It's hard for some to define the intrinsic value of bitcoin because it doesn't exist in the physical world.

    Society has trained us to value paper and metal as stores of value, but the reality is that it's about time for us to have a secure, global currency that operates solely in the digital space. The value of email as a digital substitute for snail mail may have been hard to see at first, but few would argue its merits today, and skeptics who say that bitcoin is not “real money” will most likely be eating their words in a few years.

    2. "Didn’t bitcoin just go bankrupt?"

    A lot of misunderstanding surrounding bitcoin lies in people's perceptions of the currency as a company, not a technology.

    Even for those who barely follow the news, it was hard to escape the stories about Mt. Gox’s collapse back in February. The unfortunate bankruptcy of Mt. Gox combined with journalists using reckless headline bait to cover the story led many people in general public to believe that bitcoin itself had gone bankrupt, which we all know simply isn't true.

    Most of us have had to explain the distinction between bitcoin as a technology and a currency and the (sometimes shady) companies that are operate around the currency at least once to friends and family.

    For the sake of saving us all time and for the overall reputation of bitcoin, hopefully we won't have to deal with this again in the future.

    3. "Isn’t bitcoin a Ponzi scheme?"

    There are no shortage of stories about Everyday Joes becoming millionaires off of their bitcoin investments, particularly after the sharp rise in price toward the end of 2013. Bitcoin made countless tech-savvy investors very wealthy, and naturally a wave of sceptics followed.

    It’s uncertain what exactly caused all of the price volatility, and the pseudonymous nature of bitcoin means that we will never know exactly how many people have become rich off their investments, nor will we ever know exactly who all of these people are.

    In reality, bitcoin is nothing like a Ponzi scheme, but the misinformed will still point their fingers at the newly minted millionaires, either out of spite, jealousy or unwillingness to learn more about the digital currency.

    4. "I thought people only use bitcoin to buy drugs online"

    Bitcoin got its first big break in mainstream media last year after the FBI closed down Silk Road, the Internet's largest black market.

    The press was in a frenzy to cover the arrest of Silk Road's alleged mastermind Ross Ulbricht, and bitcoin took center stage as reports suggested the FBI seized 170,000 bitcoins from both Ulbricht and the illicit marketplace.

    Bitcoin’s reputation certainly took a hit, but people seem to quickly forget that the most common form of currency used to buy drugs and finance other illegal activities is still good ole’ cash. In fact, bitcoin can be used to buy almost anything online, and more brick-and-mortar stores are accepting the digital currency as a form of payment every day.

    5. "I heard the CEO of bitcoin got arrested/died/resigned"

    This phrase comes back to the notion of bitcoin as a company, not a decentralized currency.

    There have been unfortunate news stories about CEOs of bitcoin companies committing suicide and getting arrested, but the truth is these sad events have no effect on the technology underlying bitcoin and the blockchain.

    It's important for us in the bitcoin community to explain to our loved ones that these types of unfortunate events aren’t directly related to bitcoin, because bitcoin has no CEO and the actions of a few bad players should not have a disproportionate effect on the reputation of this revolutionary invention.

    6. "Can’t the person who invented it just run off with everyone’s bitcoins?"

    There's a lot of mystery surrounding Satoshi Nakamoto.

    The person, or group of people, who invented bitcoin has been able to avoid being identified despite numerous attempts, including a high profile cover story from Newsweek.

    Those who are unfamiliar with how bitcoin works under the hood are understandably suspicious about Satoshi, and while he does reportedly own a substantial amount of bitcoins, even a brief explanation of how bitcoin wallets work can help set the sceptics straight about the security of our bitcoin holdings.

    7. "I don’t understand what’s so special about it"

    This may be the most frustrating phrase to hear from our loved ones, because as enthusiasts, we all know the significance of the invention of bitcoin.

    Bitcoin reduces transaction fees considerably compared to credit cards, allows for fast, easy and secure financial transactions to and from anywhere in the world, and the implications of the block-chain technology are only just starting to be seen.

    Of course, we all feel this way because we have taken the time to learn more about bitcoin, its different applications, and the entrepreneurs, investors and regulators who are working to bring digital currency to the mainstream.

    It's important to put ourselves in the shoes of less informed people whenever we’re faced with phrases like these, and to be patient in educating our loved ones about why we are so passionate about this novel technology.

    Confused image via Shutterstock


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