Watching true believers in action is always fascinating and often terrifying. Consider the mobilization of the bitcoin faithful every time someone writes an article questioning whether bitcoins really are the greatest advance in currency since Yap islanders invented the stone coin.
Like me, for example, and my recent post reporting that the value of bitcoins had plunged by half in a matter of hours after Chinese authorities cast their disapproving eyes on the bitcoin trade. The post attracted a cascade of negative commentary from bitcoin fans on Twitter and other online forums.
They generally seemed to think I was casting doubt on bitcoins’ suitability as investment vehicles. (they were right.) Among the counterarguments, many claimed to have bought into bitcoins when they traded at a couple of bucks, and therefore were sitting on more than $800 profit per coin even after last week’s crash. Several noted that last week’s plummet wasn’t the first bitcoin “crash,” not even the first this year–as if that’s an argument in bitcoin’s favor.
Several also pointed out that other investment markets have also experienced big crashes. The housing market, for instance. The stock market, for another instance.
Well, yes. But investment experts don’t normally point to the housing crash of 2008, or the stock market crashes of 1929, 1987, 2000, and 2008 as proof that these markets are safe or profitable. They’re arguments for caution, and that’s how last week’s bitcoin crash should be taken too.
Journalists and other commentators aren’t surprised when their challenge to conventional wisdom elicits a strong pushback from fanatics. For years, anyone writing anything negative about Apple Inc. or its signature products could expect to be inundated with responses questioning their intelligence, foresight, character, parentage or worse. That phenomenon seems to have ebbed; even Apple’s one-time fanatics are feeling the shock of disappointment. Many of those who once spend their free hours writing, “Sir, you must be an idiot” to the company’s critics now spend their days wondering when Steve Jobs will come back from the dead.
Bitcoin fanatics show some of the same pathologies as they did. They’re utterly convinced that all doubters are stupid, blind or in the pay of (a) the banks or (b) the cabal of central governments. They tend not to read an entire article before hitting their own “send” buttons, and they promise, with some glee, that the critics will learn the truth, to their own disadvantage, soon enough.