Saudi Prince Deeply Misunderstands Bitcoin

Blockchain puzzle

 

Recently, Saudi Prince Alwaleed bin Talal said that Bitcoin is “Enron in the making.” In doing so, he added himself to the long list of traditionally wealthy people to have disparaged Bitcoin over the years. Let’s take a look at what he said and see if there is any value to this latest condescending statement on Bitcoin and other cryptocurrencies.

THE SHORT ANSWER IS “NO”

I have always said that just because you don’t understand something does not mean it is a scam. In fact, I encourage everyone who comes across something they do not understand to actually do a critical investigation of this new thing in their lives.

This Saudi prince’s remarks are only indicative of his poor understanding and, thus, willful ignorance. One of his greatest grievances is that he feels cryptocurrencies are not regulated and therefore risky. While it is true that cryptocurrencies are not nearly as extensively regulated as other aspects of the financial industry, to suggest that the traditional markets are no more risky is disingenuous. Fortunes have been made and lost in traditional markets which are very well regulated. Then again, I suppose we can’t all inherit our wealth.

Another area to consider when the prince mentions regulation is criminal or fraudulent activity. I would argue that regulation has done nothing to discourage things like market manipulation, fraud, and financial shenanigans. His comparison to Enron is particularly weak since Enron was operating under the financial regulations of the United States government and was still able to commit crimes.

Further, comparing a decentralized cryptocurrency to a business hierarchy is indicative of how poorly the prince understands cryptocurrency. While Bitcoin and other cryptos are not perfect and do tend to border on centralization – at least during some parts of their existence – they are nowhere near as centralized as corporations.

IT’S A FEATURE, NOT A BUG

Perhaps the most annoying aspect of the prince’s statement is that he warns that Bitcoin is not controlled by a central bank or the United States Federal Reserve. Upon reading this part of his statement, I found myself muttering under my breath, “It’s a feature, not a bug.”

I realize I am preaching to the choir on this one, but we all know that independence from the Federal Reserve Bank and all other banking institutions is one of the most attractive things about cryptocurrency.

Bitcoin is in a strange stage of its life, where more people are hearing about it, but fewer people seem to understand it. I do not think this will last forever, and it is up to all of us in the crypto community to be open to newcomers who have questions while addressing the shortcomings of some individuals’ understandings.

We have to remember that while all this may come second nature to us, to many it is an entirely alien concept. All we can do is share our knowledge with others in a respectful manner. Rest assured that they can make up their own minds. It is just tragic to see influential individuals get so much coverage in bashing Bitcoin.

Goldman Sachs CEO Confirms Bitcoin Can’t Be Dismissed

Banks and other financial institutions have opposed cryptocurrency for quite some time now. Major entities including Goldman Sachs have remained wary of Bitcoin, even though that situation is slowly changing. In fact, the CEO of Goldman Sachs recently acknowledged there is no reason to dismiss Bitcoin whatsoever. This sudden change of heart comes at an interesting time, to say the very least.

A CHANGE OF HEART FOR GOLDMAN SACHS

Truth be told, Goldman Sachs has been far less aggressive when it comes to opposing Bitcoin compared to some other institutions. It never closed customer bank accounts for buying or selling cryptocurrency, nor has its CEO attempted to discredit Bitcoin as a tulip mania. Other banks, especially in the US, have some conflicting opinions in this regard, but that is only to be expected. It is difficult to keep an open mind when it comes to a new form of money that may make banks completely obsolete in the future.

Moreover, Goldman Sachs has been one of the more interesting banks when it comes to cryptocurrency and digital assets these days. More specifically, Goldman Sachs analysts have actually been advising clients on the Bitcoin price over the past few months. This advice has been well-received by the cryptocurrency community, as well as from institutional investors alike. In a way, this has been an interesting development, as it shows the institution isn’t dismissing Bitcoin whatsoever.

In fact, Goldman Sachs CEO Lloyd Blankfein confirmed as much earlier this week. More specifically, he stated that Bitcoin cannot be dismissed by the bank or anybody else, for that matter. While it is true the initial years have been pretty difficult for Bitcoin, no one can deny the world’s leading cryptocurrency is rapidly carving out its own legacy. In particular, the recent Bitcoin price spike has attracted a lot of attention from all industries.

Moreover, Blankfein touched upon how fiat currencies work. He explained that despite the widespread use of paper money, most people aren’t aware that fiat currency is an empty promise by a bank or government to honor the value printed on the paper itself. Whether or not those promises will ever be upheld when push comes to shove remains to be determined. So far, the system seems to work just fine, even though we have seen multiple cracks in the facade as well.

Truth be told, there is no reason for people to remain skeptical about Bitcoin. In fact, the concept of paper money hasn’t been universally received all that well either, which isn’t entirely surprising. A new form of money backed by consensus rather than centralized entities is something else entirely. Whether or not Bitcoin can succeed in this regard remains to be determined. The Goldman Sachs CEO isn’t skeptical whatsoever, even though that doesn’t mean he is a fan of Bitcoin or other cryptocurrencies by any means.

It is evident something is changing in the world of traditional finance. Bitcoin has been dismissed as a fad for far too long, and the time has now come to finally address the elephant in the room. Bitcoin will not go away overnight, no matter how much some people may want it to. Goldman Sachs is the first major bank to officially acknowledge Bitcoin isn’t going away. Whether or not others will follow suit remains to be seen.