Wednesday, February 26, 2014

4 Men in San Francisco and Bitcoin's PR Problem

I caught a late lunch today. Sitting at the table across from me were  4 men who were discussing the news of the day. First they talked about the Sierra Nevada couple that discovered $10 million in gold buried on their property, then they talked about delays at San Francisco airport because of a runway being shutdown.

After a few seconds of silence, one of them piped up, "What about this thing called Bitcoin?"

Another responded, "It sounds like some kind of bizarre scam."

A third added, "I understand there is a fatal flaw in the software that allows hackers to steal coins at anytime."

Putting aside the accuracy of these statements for a moment, if this is the general view of the greater public as to Bitcoin, Bitcoin advocates have a serious public relations problem on their hands.

After I finished my lunch, I approached their table, introduced myself and told them I had overheard their conversation about Bitcoin and was curious what kind of work they did. It turns out they are utility engineers. They weren't dummies, just average guys who, like most people, get the headline version of what is going on in the world and that's a PR nightmare for Bitcoin.


  1. I think the Bitcoin era will end up as a sad libertarian joke- Take my bitcoin, PLEASE. Unfortunately there is an air of inevitability in the "bitcoin community" and they generally treat people well until they determine that perhaps Bitcoin is not for them. That's when the arrogance kicks in- "you don't understand" "statist" "Fed lover" Sheep"

    If bitcoin is to be viewed by the general public as something other than libertarian geek toy money its needs more than just PR. It needs backing which it will never have as bitcoiners are in love with the concept of its "limited issuance" of just 21 million bitcoins to ever be mined. This artificial scarcity of limiting nothing doesn't make it something.

    The liberty movement has squandered a lot of time and effort on bitcoin. I have written three blog posts about bitcoin on and really haven't had much of an intelligent response other than "i missed the boat" or "don't understand".

    Good luck bitcoin, there are billions of people not willing to make the leap of faith that a ten digit string of code in a digital wallet created by an anonymous person will ever be a store of value.

    1. One of the key problems with Bitcoin that is in essence unsolvable is that at its very base, it offers no utility beyond that of subjective value(currently).

      While value is subjective, utility in a broad sense is not, which is why the regression theorem is in question in regards to Bitcoin.

      I liken it to the WPA under Roosevelt:

      "We are going to create jobs with projects we deem necessary."

      So what do they do? They build walls in areas where it's not clear they are needed, a version of the "lets dig holes so we can fill them", even further we can see the elements of Bastiat's broken window fallacy.

      Bitcoiners talk about the "value" of destroying electricity in a sense(though some claim via the law of Thermodynamics otherwise, lol!)-now maybe it's not 'destroyed', but it's certainly wasted.

      So on that basis alone I remain dubious. While I, like many others, would like an escape hatch from being forced to deal with the USD- I'm not comfortable with Bitcoin for the above reason aside from all the implications surrounding the fact it has gov'ts attention.

      I do not harbor any ill will towards those who disagree and I wish them the best. I don't want to see Bitcoin fail, I just don't have long term confidence in it.

      The only way I could actually start wanting Bitcoin to fail is if I see it being used as a tool by government to prosecute liberty minded people or subverted in a way that hurts people in general , and unfortunately it looks like that is a possibility, but I haven't made up my mind yet.

    2. Nick that is the lack of intrinsic value argument well stated. Bitcoiners argue that the value is in the system. If that is the case the price of bitcoin should be next to nothing other than as a use fee.

    3. I was trying to be very careful in avoiding the "intrinsic value" argument as many see it as invalid.

      Instead, I was trying to be very specific(and obviously I failed) in stating that gold/silver have uses outside of money. Some may call that 'intrinsic', but there seems to be conflation between that word/definition and the actual ability to utilize property. For example, gold/silver have uses outside of money. Outside of "money"(or using Wenzel's terminology, transfer agent), what can you use a Bitcoin for? If the subjective value of Bitcoin drops to zero, what is left to "use"? The electricity is what do you have left? I have seen a couple alt-coins based on other uses, but they aren't driving the Bitcoin market.

      Now, you could make the same argument for gold/silver, meaning "what if everyone decided they didn't want to give you USD's(or oil, or anything else for that matter) for it"...what would it be good for? But on the face of things, doesn't that seem ridiculous in and of itself? We can't name all the things both metals are good for, there's not enough space.

      The big question beyond all this I'm most interested in:

      How many Bitcoiners are pro-IP versus anti-IP? I'd love to get a survey going on that question and their reason for either viewpoint.

    4. No point in conceding the intrinsic value argument as many bitcoiners wish us to do.
      Bitcoin is good to use only - the store of value argument makes no sense.
      What would the IP debate add to the bitcoin one?

      Bitcoiners like to make being in favor of bitcoin as a type of litmus test for being in favor of liberty. The two are not connected or pre-requisites of each other.

      One could be in favor of IP rights and for bitcoin or against both. Please explain

    5. "No point in conceding the intrinsic value argument as many bitcoiners wish us to do."

      It's best to be avoided, see link:

      Regardless, I agree with the sentiment of most of your response.

      "What would the IP debate add to the bitcoin one?"

      I view someone's definition of "property" as important because Bitcoin has all the elements of IP(in my mind, maybe someone here can convince me otherwise), and if there are some that own Bitcoins BUT don't believe in IP, then how can they complain if their Bitcoins are somehow stolen? In fact, whoever stole them wouldn't be violating the NAP by the victim's standards.

      "One could be in favor of IP rights and for bitcoin or against both. Please explain"

      I think I just did above.

  2. To be fair, Bob, wouldn't that be the kind of thing you'd also hear people say about Libertarianism?

    1. Do you think libertarianism is going to take over the world anytime soon?

  3. "Do you think libertarianism is going to take over the world anytime soon?" and therein lies the delusion of many bitcoiners. Libertarian principles are sound, bitcoin is not

  4. If you're in PR and you want to take a stab at the bitcoin PR problem, let me know if you're interested in purchasing - best way to reach me is on twitter - @FlatlineFiat