Several reasons why some people always oppose Bitcoin

Naysayers love to deny others. Now many Bitcoin skeptics are once again discussing this topic. In late June, a report released by Citi Research asked, "Will Bitcoin blockchain subvert the payment system?"

The researchers’ short answer — and a resounding no — is no. The short answer, however, is shortsighted. More disturbingly, Citigroup isn’t alone in its criticism of cryptocurrencies.

To all those who are once again predicting the imminent demise of Bitcoin, let us tell them a little secret: they are wrong. Rather than simply shouting over and over that they are wrong while the naysayers chime in, let us take a closer look at some of the arguments made by the cryptocurrency naysayers.

The United States and Western Europe are well developed through existing financial systems

We mostly agree with the following points. The existing centralized payment system works for those who are within the established system. But what happens if 2.5 billion people are excluded from the established system? For the disenfranchised, banks cannot or will not provide services, but Bitcoin can change lives.

Here is the argument from the naysayers (Citigroup puts it well), again referring to the well-known established financial system: “We do not believe Bitcoin is superior to the existing centralized payment systems.” However, can we really prove that a model that is not usable has so many advantages?

In fact, the established financial system industry has left more than a third of the world's population without access to a checkbook, savings account or credit card. It doesn't have to be this way.

Blockchain technology offers the opportunity to rewrite the financial services industry, creating a more global, open and efficient system. Such a system could provide billions of people around the world with an unparalleled and stronger economic future. It could help a woman in Afghanistan seeking to live independently from her male bondage, or a doctor watching the Venezuelan currency become worthless. But they can hold a fixed asset every day through Bitcoin.

Bitcoin cannot reach areas lacking internet service

A working paper from the United Nations’ social development agency is the latest in a long line of criticism from opponents who have been the loudest voice against bitcoin: limited connectivity. In the paper, researcher Brett Scott writes:

“Bitcoin’s viability in countries that lack infrastructure and access to technology remains skeptical. In addition to the problem of building trust in an otherwise poorly understood digital token system, consistent network availability and an efficient power grid are required.”

Let’s get this out of the way once and for all: connectivity is not the problem. The reason is that you don’t need a computer to be connected. There are at least 7 billion mobile phone users in the world, which means there are twice as many mobile phones as there are bank accounts or toilets. The combination of digital currency and mobile phone connectivity promises to fundamentally reform the banking system, in favor of the so-called optimized model that excludes those who are excluded.

The Cost of the “Last Mile” Makes Bitcoin a Last Resort

Naysayers, including JPMorgan Chase & Co., argue that Bitcoin will never be a major competitor to the dollar.

The reason often cited, especially by money transfer operators, is that Bitcoin does not address certain cost challenges associated with remittances. While Bitcoin can simplify money transfers, it does not affect the so-called “last mile” costs of converting Bitcoin into local currency.

Again, we agree with this view. But it is a false view, because it can be assumed that currency conversion is expected when it is not. The view that currency conversion is the ultimate goal is also deeply rooted in the Western banking model. However, in many parts of the world, holding funds in Bitcoin is more desirable than the volatility of local currency stock prices. Note the above-mentioned doctor who is not interested in exchanging Bitcoin for Venezuelan currency at any time.

Two "incurable diseases" of Bitcoin

There are almost endless obituaries about Bitcoin. The primary reason for Bitcoin’s demise is that Bitcoin businesses lack resilience in such an unstable market. Bitcoin has only been around since 2009, so it has not been around for very long, so it has neither been tested by time nor is it stable.

Bill Gates has labeled resilience/volatility as a pitfall for Bitcoin. But what the naysayers and columnists overlook is this: youth has nothing to do with resilience, just as age doesn't mean security. Don't believe us? In one sentence: Brexit.

In the face of Britain’s exit from the European Union, Bitcoin has experienced record trading volumes as it became a safe haven for Britons concerned about the fall in the pound. Despite the cryptocurrency’s growing usage and relative youth, Bitcoin’s price has remained stable as its global nature makes it more resilient to geopolitical risks.

Yet, the naysayers still object. But, as we have already said, they get the point completely wrong. Is Bitcoin perfect? ​​Of course not, although we would argue that it is fully accessible – but lacks the properties of our ‘superior’ centralized systems.

Could the Bitcoin blockchain revolutionize payments? The correct answer is yes.