Jeffrey Robinson’s explosive new book BitCon: The Naked Truth About Bitcoin is rocking the virtual currency community with claims that bitcoin will devalue over time.
Because bitcoin is a deflationary asset, like gold, it is supposed to rise in value. But in The Naked Truth Robinson focuses on criminal activities and price manipulation schemes that he maintains harm the credibility of the asset class.
Robinson is renown for investigative narratives of journalism about financial crime and fraud in the banking and pharmaceutical industries, and is best known as author of 1995 hit The Laundrymen.
The Naked Truth deals the most sullied elements of the bitcoin industry, dwelling on personalities such as Marc Karpeles and the spectacular bankruptcy of the bitcoin exchange he owned in February 2014. But Mt. Gox’s $600 billion bankruptcy gets as much attention as do the Winklevoss twins, the author’s press agents maintain.
While Robinson raises some compelling concerns about bitcoin’s muddled reputation, not all his economic arguments stack up so logically, however.
For example, Robinson maintains that while numerous competing virtual currencies have been launched during the past year, trading volumes have remained much the same overall, meaning that the net result is that bitcoin itself is a “stagnating” asset class.
“The actual buying and selling of services with bitcoin has remained stagnant for 15 months. So now you’ve got 63,000 businesses chasing the same amount of money that the 3,000 were chasing.”
This claim is verifiably false since trading volumes have dramatically risen throughout the year on Chinese exchanges such as OK Coin, Huobei and Lake BTC.
Still, Robinson, like many, contends that bitcoin is useless and has no instrinsic value component when compared with other commodities. “You have to really stretch your imagination to infer what the intrinsic value of bitcoin is. I haven’t been able to do it.”
Long-Term Value Debasement
Although Robinson doesn’t believe in the future of bitcoin, he admits the potential of blockchain technology might have some utility. This however will not be enough to salvage the currency’s long-term value, he maintains.
“The odds of competition coming into the marketplace creating a course of least resistance that has nothing to do with bitcoin but does have to do with digital currencies means that in five years’ time no one’s going to need bitcoin the pretend currency. They’re going to love the block chain but they won’t need this pretend currency.”
Where Robinson does seem to be on safer ground is in his affirmation that the use of bitcoin across multiple payment platforms as a payment mechanism for a wide variety of goods contributes to the effective debasement of its unit value.
“Should every company on the planet have a system to accept payments through Coinbase or someplace in bitcoins, as long as they don’t have to touch the bitcoins? Maybe. Is it good for bitcoin? No, because it’s not an endorsement of bitcoin it’s an endorsement of marketing,” maintains Robinson in the press release.