So, in the world of Bitcoin things seem really simple. It’s just a currency, or an asset – a store of value of some type. Yes, it’s very unstable, for many reasons. But that’s not what I am here to talk about. It seems that the rest of the world, especially governments and the media see the bogey man everywhere when it comes to Bitcoin. So, Bitcoin is the new terrorist threat.
Let’s take two stories from the news this week, and talk about them briefly.
SEC Issues Investor Alert
This story appeared in Tech Crunch: SEC Publishes Laundry List Of Bitcoin Risks, Cites Governmental Regulation As A Potential Headache. The article refers to this publication from the SEC: Investor Alert: Bitcoin and Other Virtual Currency-Related Investments.
The funny thing about this report is that the majority of the information is pretty much generic to nearly all investments:
- “Guaranteed” high investment returns.
- Unsolicited offers.
- Unlicensed sellers.
- No net worth or income requirements
- Sounds too good to be true.
- Pressure to buy RIGHT NOW.
In other words, there are scams out there using all the classic tactics of other investment scams. Congratulation Bitcoin scammers! You’ve now ascended the mountain to take your rightful place in the pantheon of investment criminals!
Of course, the SEC did go on to point out that there are are more risks to Bitcoin investments, like not being able to recover your coins (something all users of Bitcoin realize from day one, I hope). They also point out that Bitcoins investments themselves are more risky…and then use Mt.Gox to illustrate the point. Of course anyone who thought they would be secure investing in Mt.Gox anytime in the last 2 years (or so) had to be smoking something. Mt.Gox’s problems became legendary even before they were shut down, so if you ignored all the warning signs and still had your coin in that exchange, you knew the risks you were taking.
Okay, There was an even more “wild” story out there in the last couple of days…
Bitcoin Is The New Terrorist Threat
Yes, Bitcoin is the new terrorist threat according to the Pentagon, as documented in the Washington Post article: The military thinks Bitcoin could pose a threat to national security.
According to the article, the reason for concern is this:
One reason would-be criminals find Bitcoin so attractive is that it makes anonymous transactions over long distances a cinch. Like cash, it’s the perfect financial tool if you’re trying to cover your tracks.
So, in other words, Bitcoin and other cryptocurrencies are as transparent as cash. Of course, that is incorrect, but it doesn’t stop the reporter from saying that it is, or stop the Department of Defense from making statements that it is. Despite the fact that surely the Department of Defense, and I would hope the Washington Post reporter, realize that all Bitcoin transactions re recorded on the blockchain, and can be tracked more efficiently than cash transactions can be tracked. (And let’s face it, if anyone has the resources to monitor and trace transactions on the blockchain in near real time, it would be the Department of Defense).
So, I haven’t been watching Bitcoin news for a while now… I got somewhat tired of it, and life (as usual) interfered in my ability to keep up with things. So, tonight when I sat down to scan through some of the stories from my Google Alerts, I expected to be a lot of things that I was unfamiliar with, or at least represented something new.
Instead, I found stories that are basically the same-old thing that I’ve been reading for the last 6 or more months. In a respect that is somewhat disheartening given that the reporting isn’t anything new, or any more accurate than what I was reading before. However, it is somewhat comforting to know that I haven’t really missed anything. In fact, if anything, the fact that Bitcoin based financial scams look just like any other investment scam to the SEC is somewhat heartening…seriously. It’s a sign that the Bitcoin image in the press is on the same level with just about any other business crime.
The sensationalism around the DoD terrorist threat story is nothing more than what has been said for the last two or more years. So, there is nothing new there. And, in fact, the reporting is at the same level: there’s bogey men everywhere and we’re going to report on it, even if we miss the most simple points that should be mentioned.
Oh well, at least it was fun to read some silly stories again.