On a recent post on Recode, the former PayPal CEO echoed the sentiments of many other players in the financial scene, saying that bitcoin is a massive pump-and-dump scheme.
He also referred to its investors as losers, citing greed as the main motive driving the bitcoin frenzy as well as its market value.
Defending His Claims
In his opinion, the currency does not have any inherent value as it lacks the fundamental attributes that any currency should have.
As a means of payment, he claims that bitcoin falls far short because it is accepted in very few places. And even then, its extreme volatile swings that at times reach up to 10% make it “useless.”
Volatility also discredits it as a store of value. Moreover, the crypto exchange platforms that should act as storehouses are neither trustworthy nor reliable, making them worse than brokers and banks.
He also discredits bitcoin on the grounds that it is not a thing in itself and only gets its value on the basis of the Greater Fool theory, the idea that one finds it valuable because they feel another person will buy it at a higher price.
Harris highlights the high electric energy consumption of bitcoin mining, its slow transaction speeds as well as high transaction costs as the major loopholes associated with the currency.
Similar statements have been uttered by other bitcoin critics including Jamie Dimon, the JP Morgan Chase CEO, and more recently, Nouriel Roubini, a renowned NYU economist.
The former referred to bitcoin as a currency invented out of thin air while the latter called it the biggest bubble in the history of humanity.
I bet there were many who called PayPal as a scam too before it went mainstream. No one can predict the future but all we can do is wait and see how well these predictions are made.
I am sure that Bitcoin and the Blockchain Technology are here to stay and am bullish on it. Let’s see how things turnout to be.