Cryptocurrency FUD Triple Whammy Trots Out Same Arguments

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  • The cryptocurrency sector, and Bitcoin in particular, came under fire this week from three sources
  • Janet Yellen, the Guardian, and a London-based engineer chose to attack the sector this week
  • The attacks once again illustrated a lack of education on their subject matter

Cryptocurrency has endured a triple whammy of FUD this week as opponents rehashed the same tired, inaccurate, or over-exaggerated arguments against it. The sector, and Bitcoin in particular, came under fire from three separate sources, with its usage, creation, and value proposition all attacked in the usual way. Fortunately however, they didn’t seem to have a particularly big impact on the cryptocurrency markets, and didn’t tell us anything we didn’t already know.

Janet Yellen Says Cryptocurrency is of Concern

Janet Yellen, thought to be Joe Biden’s Treasury Department head, stated during her Senate confirmation hearing yesterday that “the potential for terrorists and criminals to use cryptocurrency to finance their activities” was of concern to her and that the incoming administration would need to “curtail their use and make sure that anti-money laundering doesn’t occur through those channels”.

While it is true that some terrorist financing does go on with cryptocurrency, as Anthony Pompliano pointed out on Twitter shortly afterwards, banks are the biggest money launderers in the world by far, and a recent study by Europol found that only 1.1% of Bitcoin use is illegal.

Bitcoin Mining Thread Goes Viral

Another piece of FUD that has been doing the rounds this week came via a badly misinformed Twitter thread about Bitcoin’s energy usage. The thread, which has gained huge traction and disabled replies so that no one could correct the author, called the cryptocurrency a “giant smoldering Chernobyl at the heart of Silicon Valley” which was just the start of the inaccuracies.

The author cited several reports that have themselves made illogical leaps or otherwise huge assumptions and ignores the much larger environmental impact of the likes of video streaming platforms and metal mining. One of these was the suggestion that Bitcoin mining on its own could push up global temperatures by two degrees by 2033, which would only be theoretically possible if Bitcoin gained as much adoption worldwide as the electricity and made no advances in energy efficiency in that time.

Guardian Technology Editor Calls for Bitcoin Ban

Finally, a podcast from the perpetually Bitcoin-hating Guardian released yesterday features their UK technology editor Alex Hern stopping short of calling Bitcoin an outright scam but saying it should be banned because its only value proposition is as a “new and innovative way of breaking laws or bypassing governments”.

Hern also seemed to suggest you could steal electricity for Bitcoin mining by “running a cable from your neighbour’s house and putting the electricity on their meter”, which shows a staggering lack of understanding of what is required to mine the cryptocurrency. Hern also conflated the recent FCA ban on scam Bitcoin investment services to Bitcoin itself, which are two very different things and shows further lack of understanding of the cryptocurrency sector.

Barely a Ripple in the Markets

Fortunately for cryptocurrency enthusiasts, Bitcoin and most other cryptocurrencies have weather greater storms than this, and the result was a very minor drop in price, even if that could be attributed to the FUD at all. Nevertheless, it still shows that there is a stunning lack of education out there about Bitcoin and cryptocurrency in general, particularly from those who seem to have strong opinions about it.