A Comment on Steve Hanke’s Confident Misunderstanding of Bitcoin

How Innovative Is Crypto? The argument for crypto as a driver of innovation is tenuous. This article reflects the communities misunderstanding of Bitcoin.

Introduction:

The arguments raised against bitcoin did not correctly represent facts or the general understanding of the terminology used. With a recent opinion article titled “How Innovative Is Crypto?” Hanke attempted to make some new points about cryptography. “The argument for crypto as a driver of innovation is tenuous,” according to the essay’s subtitle. Hanke claims to have shown that cryptocurrencies are not very creative.

I’ll demonstrate how he fails in this section. Before we dive into our guide, please register yourself on the official trading website; and become a member of the organization so you can invest in the cryptocurrency.

In his article, there are three significant issues on Misunderstanding of Bitcoin to consider. Another is that he relies on a minimal and unspoken meaning of the term “private”; and claims that this invalidates Bitcoiners’ efforts to concentrate on what absolute financial privacy involves to discredit their efforts. In addition, his figures are out of date; more current data shows a very different situation.

I’ll deal with each issue one at a time. First and foremost, Steve claims to have shown that cryptocurrencies are not new. Steven makes an effort to demonstrate that digital, private money already exists in some form. However, even if he is correct that it does (which is the subject of the second issue); he fails to consider all of the other intriguing characteristics of cryptocurrencies that proponents have pointed out.

Demonstration of Cryptocurrencies:

Even if Hanke is correct in his Misunderstanding of Bitcoin, Steve has fallen short of demonstrating that Bitcoin is not creative in these other areas. Second, he uses the term “private,” but he fails to precisely explain what he means or specify which assurances his use entails. It is correct. A significant amount of money these days only exists in digital form.

Bitcoiners are concerned with the concept of “privacy” in the sense that financial information is “not to be shared with or disclosed to other parties”. It is not true that people who have bank accounts use private money in this way; their bank account information routinely shared with or disclosed to authorities. The term “private” is used in this context to distinguish it from the word “public”.

An alternative definition of private money would be money that is not, in general; regulated by a government (also known as free money) (thanks to Aaron Segal for pointing this out). Some Bitcoin proponents are very concerned with the idea of private money in its most basic sense.  

According to the article he references, the data was collected “from January 3, 2009; through the end of April 2017.” Bitcoin has existed for a third of its whole life! Things have changed since then. At the same time, CipherTrace finds that they account for less than 0.5 percent of all cryptocurrency transactions.

Because of this inaccuracy of Misunderstanding of Bitcoin, Hanke’s claim that “cryptocurrency’s value proposition relies largely on its capacity to enable end-runs around the law” is incorrect. It estimates that more than 99.5 percent of all transactions are lawful.

Bitcoin Value Increase gradually:

Even though Bitcoin has increased in value from $600 to $55,000 since Hanke began criticizing it in February 2014; he does not seem to be concerned by any new developments in the cryptocurrency; or the fact that it has increased in value from $600 to $55,000 since he began bashing it. It leads us to a lesson from which we may all benefit. People seldom alter their views after making a decision.

Because it requires a significant amount of cognitive work; we are more likely to seek information that supports our existing beliefs. Furthermore, altering our views entails acknowledging that we were mistaken about what we previously believed, even if just to ourselves. It’s far simpler psychologically and emotionally to stick with what we’ve always thought rather than changing our minds.

Conclusion:

However, this does not lead to the discovery of the truth about the Misunderstanding of Bitcoin. Sometimes we’re searching for proof, and sometimes we’re not seeking evidence. However, if we come across fresh evidence, we should accept it out of hand. We need to take it seriously and consider if it should lead us to rethink some of our convictions. Only when we have done so can we be sure of our beliefs and stand by them.