Bitcoin: unrealistic expectations

I’ve been participating in the bitcoin scene for a while now, and I continue to be amazed by the ‘get rich quick’ hype surrounding it. Lots of people, many of them obviously very poor to begin with, actually expect that they will receive bitcoins for free and that the value of those bitcoins will then go through the roof, making them (and, by the same logic, presumably everyone else as well) lots of money. People are even asking whether they should quit their day jobs to pursue bitcoin. This is incredibly twisted.

Bitcoin doesn’t have some magic property that will make you, or anyone, rich. Bitcoin, at least in some respects, functions as a currency. No one is going to give you significant amounts of money for free, and the same is true for bitcoins. You can earn bitcoins by working or by investing. Unless you’re already a bitcoin expert, it probably won’t be worth going after bitcoin related opportunities. Instead, continue doing what it is you do best (or if you don’t yet have such a vocation, go to school and get one), and, optionally, use your salary to buy small amounts of bitcoins.

If you do decide to ‘invest’ in bitcoin, don’t spend more money than you can afford to lose. There are huge risks involved: not only may the value of bitcoin plummet, but you may also lose your coins to cyber criminals. Bitcoin is not like having a credit card, where the bank will reimburse you for unauthorised transactions.

Then there’s the opposite camp: those who claim bitcoin is a ‘Ponzi scheme’ and should be outlawed. They’re equally misinformed. Bitcoin is a technologically very solid and well defined protocol for making payments and storing value. It has yet to find its exact place in society, and it’s certainly not a drop-in replacement for the banking system, but if nothing else, it’s an impressive proof of concept.

And then we have the ‘altcoins’, the innumerable other ‘crypto currencies’ that are more or less based on bitcoin. Although a few of them (very, very few; I’m basically thinking Ethereum) appear stable and trustworthy, almost all are experimental or downright scams jumping on the blockchain bandwagon or simply out to circumvent IPO regulations (by selling coins in place of shares). So please don’t lump bitcoin together with altcoins (also known as ‘shitcoins’ or ‘scamcoins’).

What do you think about bitcoin? Do you expect bitcoin to have an impact on your life, and if so, how?