Interview With an Economics Professor: "Bitcoin Has a Lot of Problems"

Interview With an Economics Professor: “Bitcoin Has a Lot of Problems”

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I had the chance to interview a professor of economics and CEO of an international investment group. As requested, the interviewee’s name will not be published. Instead, the interviewee is referred to as “Chris” in this article. 

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YAY! Everybodys happy!Sergio: Have you heard about Bitcoin and what are your thoughts when you hear people talking about Bitcoin?

Chris: I came into contact with this Bitcoin and altcoins during the many investment requests we received over the years. From the ludicrous to the more serious, but most of them just fail in convincing most of us.

The concept of the blockchain and the technology behind it does intrigue me, as it does a lot of other colleagues in diverse sectors. Also the vision that Bitcoin has, immediate transfers with near zero % surcharge is an excellent, in theory. It makes the competitiveness a lot more interesting.

You wrote a couple of interesting articles about the potential that Bitcoin could create for small and mid-sized businesses and how to use it in their business model. However Bitcoin has a lot of problems.

You asked me what I thought about people talking about Bitcoin. Personally I find them a bit naïve and their focus is a bit wrong. Other people in business and finance are just laughing at certain people and the way they are pushing Bitcoin forward (or should I say force Bitcoin).

Sergio: Can you elaborate a bit about the last paragraph? Where does Bitcoin have a problem or where do you see the problems?

Chris: For me the first issue is that Bitcoin has a very big image problem. Bitcoin has been and is currently being rocked left and right by scammers and frauds. The first big fraud/”hacking” scam was Mt. Gox, that drew the attention of the general media. This generated a huge negative image with a lot of people and scared a lot of investors away from Bitcoin. After that the image of Bitcoin got repaired a bit but then Josh Garza and his scamming practices came along.

The Bitcoin community seems to be rife with scammers and fraudsters, or at least that is what a lot of experts in different sectors are labelling the Bitcoin community. You have exchanges that are run by anonymous people, with some “dazzling claims” just to trust the exchanges. I know for a fact that a certain exchange is not paying out the promised monthly dividends on their shares and are actually flirting with the legal apparatus of the country they are located in. No wonder a lot of experts are advising banks and countries to “issue their own virtual currency” for certain departments (tax tokens or investment options for example).

I mentioned that the focus was a bit off with a lot of Bitcoiners. A focus on “getting more merchants to accept Bitcoin” is most of the time a self-defeating strategy. You need to have a handful of reliable merchants that offer products that are relevant for the general public. Then you need to focus on the general public. If enough of the general public ask /demand to be able to pay with Bitcoin for their goods, the merchants automatically follow. That is basic economics and the fact that this isn’t being done adequately, draws a lot of laughter from the Bitcoin critics.

Sergio: As we hear you mentioning the more obvious problems and issues that general and business people have with Bitcoin, is there any hope for Bitcoin in the future?

Chris: It might seem bad, but the fun fact of Bitcoin is that it is decentralized. It is both a weakness but also its strength. It is much easier to change direction and “activate” Bitcoiners to shift their promoting of Bitcoin from businesses to the general public. There are some organisations that already do that. For example, we have the College Cryptocurrency network, but also other organisations that have been created to educate and inform everyone about Bitcoin.

Some people propose that a centralization would make Bitcoin a better place for everyone. I’m from the viewpoint: if it isn’t broke don’t fix it but that doesn’t mean you can make adjustments to make it better. I suggest that there is a semi-centralization and legislation but only for exchanges. There is going a lot of Bitcoin through them and as such they should be accountable for everything if something goes wrong. Real world exchanges are controlled and looked over by watchdogs and that courtesy should also be extended to the virtual currency exchanges because these exchanges have a history of fraudulent activities.

Of course, the success of Bitcoin doesn’t rest solely on the shoulders of the Bitcoin community. There are a lot of other factors like legislation, government positions versus Bitcoin, tax on Bitcoin, possible bans, etc.

We, at Bitcoinist, thank Chris for sitting down with Sergio for this interview. The statements and opinions that are put forth in this article are the statements and opinions of Chris. These opinions are not necessarily the same as the Bitcoinist team.

What do you think about the state of Bitcoin? Comment below!

Images via Pixabay.


Sergio Schout

Sergio Schout

Serge, aka Sergio, has been travelling the world since he was 6. Thailand, India, Sri Lanka, Malaysia, Singapore, java, Sumatra, Bali, Japan, US, Entire European region, etc. are a couple examples of his travel destinations. He has been curious about different cultures and practices. This curiosity has led him to pursue a couple of university degrees. Serge has a couple master’s degrees from top European universities. While attending university, he wrote a lot of scientific papers concerning socio-economic and financial developments in the past and present. During his studies at university he offered his free time up to do volunteer work, along with some friends. They helped the homeless get back on their feet ( some of these "homeless" now have small companies of their own and Sergio has good connections with them). It was at during his studies at university, in 2009, when he first heard about "Bitcoin". Being a coin collector and economic expert, he was intrigued by it and is active in the Bitcoin and digital currency community ever since. He translated the Bitcoin comic from Spanish to English and he is also using his connections to get the comic into the Belgian and Dutch comic market, he is an official member of the Belgian Bitcoin Association and he is a freelance investigative journalist that has written under his own name as well as under a pseudonym for a multitude of news outlets. After graduating he was immediately hired by the university that he graduated from. After moving on from that research position he was hired by a famous European think-tank as a researcher. His hobbies are: dancing (from Argentine tango to Zouk), collecting coins and determining them, writing articles, translating, proof reading and doing scientific research. In 2014 Sergio and Jp combined their forces and created the crypto news outlet called Cryptoarticles. Sergio attended most of the European Crypto currency conferences, where he made a lot of connections and friends along the way.

  • Concern_Troll

    Is “Chris’s” mother tongue English?

  • “It will never fly” Where have we heard this before?
    So by these very same arguments, we shouldn’t use ‘money’ and should be laughing at the very concept of carrying lumps of base metal around in our pockets. From the Dutch Tulip bubble, to Charles Ponzi, Bernie Madoff, HSBC, Barclays, Libor, PPI Misselling, Credit Card Fraud, Boiler Room scams, Money Laundering, bribes in brown paper packages – the list is endless.
    Bitcoin has some small time crooks, and some naive users, but these same arguments from “Chris” were used during the early days of the Internet. Back then according to the “Chris’s” It was just used by paedophiles and crooks, and “people will never use their credit cards over the Internet”, that exact statement was made to me in the late 90’s, from a Director of IT, when I was setting up a (successful) ecommerce trade supply site.
    People used to carry pockets full of metal and paper – oh how we laughed.

  • ButtCoiner

    ViK, please go back to sucking Homero Joshua Garza’s “beautiful cock” some more. Don’t forget to fondle his balls while you’re at it. I understand he also likes a finger in the butt.

  • Bitcoin Barney

    Miss ViK, you can stop shilling for GAW and Homero now. Maybe you should try and repair what little image you have left. is considered the joke of the crypto world now. Was it worth it?

    It is cute how you defend Homero so much even though there is undeniable proof of what you are saying is false. And you want to be the purveyor of a site that points out scams? You have become as big of a joke as Homero has.

  • Greg Matson