Opinion The Divisiveness of Bitcoin and Digital Currencies

The Divisiveness of Bitcoin and Digital Currencies

August 28, 2021

No matter if a person might be supportive or dismissive of cryptocurrencies, one thing is sure. The same concept is too often very divisive inside of even the most casual of conversations. At the same time, it is a regular topic, especially when the prices are going up or down to a significant extent. Here, inside of those heated conversations, it is easy to see friends, coworkers, or family members go at each other about some aspects of crypto or its wider world influence. Almost universally, the chances of the same groups coming to some kind of understanding are very slim.

Because of that, many are wondering, especially if they do not have a dog in that race, why are digital currencies like bitcoin such a divisive idea. The background of that question actually has many very relevant factors and goes directly towards not just the idea of blockchain entities that act in a financial realm, but the entire present setup of finance and economics. Their topics are coloring the present reality, but more importantly, they are coursing out the trajectory that the world will take on in the future. Because of that, everyone has a stake in the same debates and how they will eventually turn out.

Revolution and Bubble

Depending on the side in an argument, it is easy to hear that cryptocurrencies are either a revolutionary fintech invention that can revolutionize the economic future of the world or a bubble that is worse than the famous Dutch Golden Age tulip mania. There is also a range of opinions between these two extremes that are less drastic, but often just as entrenched as these polar opposites. No other financial asset comes with this level of extreme opinion. Yes, any new and emerging market will see its share of controversy. This too is going to be divisive to a point, as some investors and traders enjoy engaging with novel opportunities. Others tend to avoid these and stick with things that they know well and believe that they have a competitive advantage.

However, these rarely include instances like company bosses threatening to fire their workers who decide to invest in cryptocurrency for nothing more than being stupid. That is an exact quote from Jamie Dimon, the CEO of JPMorgan. He famously said the same thing back in 2017, when the price of bitcoin was somewhere around 5,000 USD. While he managed to change his position somewhat, the drastic nature of this statement still shows that even veteran financial professionals are not immune from getting swept into the discussion of whether bitcoin and other cryptocurrencies are a bubble or a revolution.

Reasons for Divisiveness

Ordinary people, but also analysts, have wondered for a long time what could be fueling that divisiveness. For some, the easy answer might lie in the concept of jealousy. People who got into cryptocurrencies a few years ago are now good on their investments at least several times over. Others might have made a lot more than that and some have even become wealthy thanks to nothing more than that initial modest involvement. For example, at the start of 2015, 100 USD would be able to buy a person 0.5 bitcoin’s BTC. Today, the same investment would be worth some 25,000 USD.

Things like that will definitely color the way a discussion takes place, especially between those investors and others who would never put their money into crypto under any condition. However, a much bigger element in that mix is the process of framing the same discussion. It is the main driver of conflict but also something that sets the stage for the same discussions in almost any other place, including the mainstream media.

Technology or Currency

No matter if a person is coming from the traditional financial world or the cutting-edge cryptocurrency development domain, they can perceive crypto in one or two ways. They can see it either as primarily technology or a currency. In theory, a person could see them as both, but in reality, anyone will focus on either one or the other. As a currency, the BTC token might not evoke the best association for most people. After all, it is riddled with a range of issues. It comes with incredibly high volatility, making it something that is dysfunctional on a day-to-day basis. At any given point, the price of BTC or any other cryptocurrency can easily move up and down by a high single-digit. That often takes place in a matter of only several days.

On a monthly level, those are double digits regularly. On a yearly level, no one can tell where the price will head next. Thanks to that issue, things like salaries or mortgages in cryptocurrency are all but impossible in the traditional sense. Other similar situations appear no matter where one might look in the world of finance. Besides, none of that will change anytime soon, neither through luck nor design. Because of that, few people are buying anything with bitcoin, no matter if that is a cup of coffee or a brand new Tesla Motors vehicle. Furthermore, few that do own bitcoin still need to pay taxes on things like capital gains. So, it is hard to perceive bitcoin as a currency in the regular sense. Because of that, most of the supporters of cryptocurrencies, in general, tend to focus on their successes as a technology.

Massive Change

All cryptocurrencies, like bitcoin, are a technological revolution with many financial implications. They are to the world of competitive athletic competitions what esport tournaments are slowly becoming now – not a competitor in a zero-sum game, but an addition to a growing ecosystem. BTC and all other crypto tokens have an intrinsic value to them and that is not only their stand-in as a currency but as a living technological entity that keeps evolving further.

Their divisiveness will not go anywhere anytime soon, but the polarity of those discussions is already changing. It is hard to imagine everyone being fully behind crypto anytime soon, but the number of those who are behind it, just like the number of active digital currency wallets, keeps on becoming bigger and bigger with each passing year.