Editor’s note: This article was first published in February 2014, when Mt. Gox, then the largest bitcoin exchange, had halted withdrawals and users were protesting outside its offices. The exchange shut down and filed for bankruptcy at the end of February 2014.
Ironically, Bitcoin was born as a way to take power away from Wall Street’s corrupt financial system, and the biggest current champions of this new “digital currency” supposedly sympathised with the #OccupyWallStreet protests back in their day.
“Bitcoin is the future, and anyone who doesn’t understand that has no idea what they’re talking about”, say some people who start from the assumption that the digital currency is all advantages. Of course, we already have the first victims: not of Bitcoin itself, but of the disastrous way it fundamentally works, which comes built in as standard.
With the temporary halt to trading on the biggest bitcoin trading platform in the world, MtGox Co, which has stopped withdrawals, many users now doubt that the platform will reopen or fix the problems that forced it to close temporarily. That is a cause for concern, because they cannot get their money back.
Now some of these people are protesting outside MtGox’s offices, which we have called #OccupyBitcoin, and I honestly believe that in the future many people will lose their money by playing with Bitcoin. You can fall victim to the closure of a trading platform, to a bitcoin theft, or to a definitive collapse in the bitcoin price, and nobody will be able to do anything to help you get your money back if that happens.
These protesters, who for now are very few, want their money back and are asking “where their bitcoins are”.
However, I would like to remind Bitcoin lovers that if the ultimate idea is to bring down the current financial system, taking power away from Wall Street to hand it to Silicon Valley, that is not going to happen, not in this world. When the time comes, Bitcoin could die of its own success: as soon as it poses even the slightest problem for international currencies, if I remember correctly there is a law that expressly prohibits creating a currency without the supervision and backing of central banks.
That law exists to prevent companies like MtGox from being able, at a given moment, to keep all their users’ bitcoins. I am not saying that is MtGox’s intention, but if everyone had trusted bitcoin and put a large part of their life savings into this currency, those people would now be in a situation similar to the preferentes scandal (the hybrid preference shares sold to ordinary savers by Spanish banks).
And I agree that the financial system has committed far too many abuses and that many more people should be in jail, but honestly, I think Silicon Valley would do even worse if we put the future of the world economy in its hands. Although, I insist, that is not going to happen, and if it does, it will not be Bitcoin as it currently works.
So, once again… do you want to avoid trouble and not end up holding a placard with the slogan #OccupyBitcoin later on? It’s simple: stay away from Bitcoin.
