Bitcoin Weekly: Dr Doom Rains on Bitcoin’s Parade, Bitcoin Finds New Friends
Bitcoin Weekly: March 15th, 2014
Here at CoinReport we like to breakdown the week’s bitcoin news and headlines for our readers. This week, ending March 15th 2014 has been packed with positive news and negative views on bitcoin.
Doom and Gloom Roubini
The week began with a forecast of doom and gloom. Patchy little dark clouds appeared, casting shadows across an otherwise bright view of the horizon.
Who is responsible for this gloomy outlook? It started with “Dr Doom”, economist Nouriel Roubini, who publicly tarred bitcoin with the “Ponzi Scheme” brush and announced that bitcoin is a “lousy” store of value, offers “little wealth” and is only used for criminal activities.
“Bitcoin isn’t a currency. It is by the way a Ponzi game and a conduit for criminal/illegal activities. And it isn’t safe given hacking of it.”
Roubini’s bearish outlook on bitcoin appears highly exaggerated to say the least, considering he believes bitcoin is not a unit of account, a currency, a means of payment or even a store of value. While bitcoin as a currency is still a topic under debate, bitcoin as a means of payment is not. Bitcoin is already a growing and proven means of payment.
Morgan Stanley and Goldman Sachs Speak Out
Morgan Stanley Chief Executive, James P. Gorman also weighed in on bitcoin this week, kind of. Gorman spoke out against bitcoin, expressing his hopes that government regulators were paying “a lot of attention to it”. but ironically added
“I’m not sure I understand it. It’s totally surreal.”
You might think those with a financial background, especially those in the banking sector, may be able to grasp a basic understanding of bitcoin.
Goldman Sachs published a report this week, which, to be fair, gave bitcoin a little more justice. The report, although suggesting bitcoin cannot be considered as a currency, does state bitcoin could be considered as a commodity and that the core ledger technology holds potential promise.
The authors, Dominic Wilson, chief markets economist and Jose Ursua, global economist at Goldman Sachs wrote:
“We would argue that Bitcoin, and other digital currencies, lie somewhere on the boundary between currency, commodity and financial asset. Our best definition would be that it is currently a speculative financial asset that can be used as a medium of exchange,”
Considering the opinions of those in the other major banks, the opinions of those at Goldman Sachs could have been equally scathing, so the report was relatively positive in parts.
Mark Cuban and Baseball Cards?
More, pseudo-positive news for bitcoin came from an interview with American businessman and investor, Mark Cuban. Cuban also believes the bitcoin network has “great opportunity in the future” but doesn’t believe that bitcoin as a currency has much future promise in the long term. When asked if he would buy bitcoins himself he said:
“I’d look at it, but more as fun. It’s almost like buying and selling baseball cards. It’s just about supply and demand, almost like buying stocks, too. But there’s definitely risk involved if you’re looking at it to be a long-term currency.”
On a scale of dark to light, we moved from stormy clouds to sunny skies as the week passed.
Positive news for bitcoin came in the form of a proposal by NYDFS (New York Department of Financial Service) accepting applications for new Digital Currency Exchanges in New York State. these exchanges would be regulated in an effort to enhance customer protection and prevent money-laundering operations. While the regulation of bitcoin exchanges may be debated by some, this is something many of those hesitant to adopt bitcoin are looking for, and as such this may open the door for the wider adoption of bitcoin.
Jimmy Wales ‘Playing With Bitcoin’ ?
More good news and exposure for bitcoin came from Jimmy Wales, co-founder Wikipedia, who told twitter he was “playing with bitcoin” earlier this week. He then took to Reddit for a discussion on bitcoin and whether Wikipedia might consider adopting it. Of bitcoin Wales said he was “cautiously pessimistic, in that
“I’m loving the idea but I see a lot of real problems. One of my concerns is that the complexity of it all will hinder adoption.”
Nevertheless, he went on to say it is something he will be discussing with Wikimedia’s Foundation Board.
“I’ll be raising this with the board, but of course it isn’t up to me alone.”
Bitcoin Foundation Adds Two New Members
Speaking of Boards, The Bitcoin Foundation added two new members to their world class team. Any Weiss, of Weiss Public Affairs and Jim Harper of the Cato Institute joined the team this week. In a press release, Jon Matonis, Executive Director of the Bitcoin Foundation said:
“Bitcoin is rapidly maturing and we are actively building out a world-class team of highly experienced professionals. Jim’s experience with Cato and past experience with PayPal in addition to Amy’s experience with the United Nations Foundation and the White House are invaluable to our efforts around the world and in D.C.”
Support for the Bitcoin Foundation has increased with the addition of these highly respected individuals to an already respected foundation.
Mark Karpeles’ U.S. Assets Frozen
That brings us neatly to the next topic, although perhaps “respected” is not a term generally associated with this next individual. Mark Karpeles , CEO of MtGox, has had his assets frozen amid suspicions of fraud and possibly the theft of 744k bitcoins from Mtgox customers. His misery continues as a class action lawsuit for $500 million was started by bitcoin investors in Canada. While this is a major negative for Karpeles and MtGox it is a positive for those who got “goxed” and thus a positive for the bitcoin community at large.
Overall bitcoin’s parade wont be rained on and hopefully neither will the parade tomorrow.
Happy St. Patrick’s Day!
– Kate L
Featured Image via igor.stevanovic/Shutterstock