Each of those readers will take heart in the fact that there are plenty more such lies to go around – especially if we include all of the alternative cybercurrency coinage springing forth like tulips in the snow, what aficionados refer to as altcoins. Cybercurrency: tulips in the snow Lie #1: The ‘Black and White’ Fallacy In the previous article, I pointed out that Bitcoin wasn’t sufficiently similar to other things to draw comparisons.
A common response: I fell into my own trap by making comparisons between, say, the Bitcoin bubble and other speculative bubbles or between Bitcoin and ‘real’ money. Such responses are examples of the black and white fallacy: assuming that for a given argument, only the two most extreme positions are under consideration.
Such extremist thinking pervades the cryptocurrency world. Lie #2: Bitcoin’s Market Cap is Relevant As I write this, Bitcoin’s market cap is over a quarter of a trillion dollars.
That doesn’t mean, however, that there’s a bucket with that much cash in it under a rainbow somewhere, ready to be divvied up amongst all the lucky leprechaun-seekers holding Bitcoin. In reality, when the bubble is about to pop and everyone seeks to cash in, the total amount to be divvied up can never be more than the amount people invested in Bitcoin over time – and that number is far, far smaller than its current market cap.
Lie #3: Decentralized Transaction Processing is a Good Idea As with any blockchain-based technology, every cybercurrency’s transaction infrastructure depends upon a number of decentralized transaction processors. In the case of Bitcoin, we call these processors ‘miners,’ because the Bitcoin infrastructure rewards such miners with new Bitcoin. Read more from forbes.com…
thumbnail courtesy of forbes.com