Bitcoin story by Netease stirs up negative comments among Chinese
Netease released a story about Bitcoin, asking: Is bitcoin still a viable asset after 1.5 millions times rise in 4 years? The report first tells the story about Satoshi Nakamoto and some basics of bitcoin. Then the author goes through the regulatory policy change, mostly the central bank’s attitude, across the world from 2013 to 2015. In the end, a number of intrinsic flaws are disclosed to warn potential investors. The report quoted articles from 8btc and statistics from blockmeta.
Netease quote pictures of bitcoin mining arm from 8btc
The report is biased against bitcoin, which is what we can expect from the mainstream media coverage. For example, the report mention the bitcoin ban by the Bank of Thailand in 2013 but neglects the “not illegal” report in 2014. The same “illegal” tone applies to other countries like Russia, India and China etc. However, the report also points out that:
“So far no country can completely ban Bitcoin. The only thing that a government can regulate is the Bitcoin trading exchange.”
The last part of the report is all about the intrinsic “flaws” of bitcoin, among which volatility has become the root of all evils.
“As Bitcoin is not backed by any assets or national credits, therefore it is considered as ponzi scheme by someone. The rise of bitcoin in recent years offers a path to quick fortune, which is soon followed by Litecoin, Dogecoin. Meanwhile a number of coins issued by scammer’s company took the ride by labeling themselves as decentralized. Although bitcoin is not a ponzi scheme, it has brought the opportunity for other private coins to fish in troubled water.”
“According to blockmeta data, the balance of the addresses that haven’t any output in 3 years amounts to 3.23 million BTC, which means the amount in circulation is getting fewer and fewer. Such deflation mechanism is against the common conception of currency. As the human race are creating values every single moment, which means by possessing bitcoin alone one’s wealth will increase without effort. If everyone choose to hoard Bitcoin instead of spending them, gradually Bitcoin will cease to circulate in the market.”
“The deflation mechanism makes it incompatible with social development demands, which curbs its implementation on large scale. “
Secondly, the Mt.Gox’s case is quoted to address the “external” security concerns.
“45% of the Bitcoin exchanges are shut down, even the world’s largest exchange, Mox.Gox, announced bankruptcy in 2014 with a loss of 850,000 BTC and there are numerous theft cases.”
Bitcoin volatility in the past few years also presents a convenient excuse for its future application. The extreme volatility of Bitcoin has become a huge obstacle for Bitcoin-based payment. Nearly all countries’ central banks or regulators believe that Bitcoin speculation attribute is too strong. Besides Bitcoin transactions are not zero-cost, and each transaction involves a large number of calculations and broadcast throughout the network, and these calculations constitute transaction costs for Bitcoin. Transaction costs will only increase as newly-issued Bitcoin is exhausted and Bitcoin is deflated. It’s difficult to imagine a “currency” can actually flow with a very high transaction costs.
As bitcoin could serve as a vehicle to allow free flow of capital, the circumvention of regulation is the real threat. The report implies that the decentralized bitcoin will
“Influence the effectiveness of the national monetary policy and exchange rate stability to a certain extent. “
“capital flight on a large scale”.
Therefore governments are trying to find ways to regulate Bitcoin.
Despite the criticism above, the report finally points out that the digital currency is inevitable and the current banking industry is facing significant change in the future.
Founded in 1997, NetEase is one of the most influential online portal in China and renowned for its dynamic “comment culture”. So far 439 comments with 8,422 votes have been generated around the topic. These arguments certainly reflect the mainstream mindset. But the comments from viewers are not so friendly.
The top 3 comments with most upvotes reads:
1. I have developed a MarsCoin after years of effort. It’s estimated to rise to 100,000 USD in 10 years. Martians may get free coins by upvote me.
The 2nd post raised a series of questions:
What happened after the 21 million coins are mined? If (bitcoin) become a universal currency, so the richest guy is the one that hold most coins? How much will it be if 21 million coins are to split for the 7 billion people on earth? Is fiats equivalent of paper? Can the elderly use them? What if another algorithm replace bitcoin in the future? Is the holder vulnerable to hacking? Do we need general acceptance if I want to use bitcoin? Why can’t we just use fiat if just for payment? Can we guarantee the storage of value via bitcoin?
The answer to the above questions is mocking bitcoin as human excrement.
The 3rd one gives two suggestions:1. If you have sufficient funds, take your chance. 2. If you want to lose everything, take your chance.
Although the ecosystem of blockchain and cryptocurrency has greatly improved over the past few years, we can still feel the hostility and misconceptions in mainstream media and the public. There is a long way to go before the “trust machine” can build trust among us.