Recently, Saudi Prince Alwaleed bin Talal said that Bitcoin is “Enron in the making.” In doing so, he added himself to the long list of traditionally wealthy people to have disparaged Bitcoin over the years. Let’s take a look at what he said and see if there is any value to this latest condescending statement on Bitcoin and other cryptocurrencies.
The Short Answer is “No”
I have always said that just because you don’t understand something does not mean it is a scam. In fact, I encourage everyone who comes across something they do not understand to actually do a critical investigation of this new thing in their lives.
This Saudi prince’s remarks are only indicative of his poor understanding and, thus, willful ignorance. One of his greatest grievances is that he feels cryptocurrencies are not regulated and therefore risky. While it is true that cryptocurrencies are not nearly as extensively regulated as other aspects of the financial industry, to suggest that the traditional markets are no more risky is disingenuous. Fortunes have been made and lost in traditional markets which are very well regulated. Then again, I suppose we can’t all inherit our wealth.
Another area to consider when the prince mentions regulation is criminal or fraudulent activity. I would argue that regulation has done nothing to discourage things like market manipulation, fraud, and financial shenanigans. His comparison to Enron is particularly weak since Enron was operating under the financial regulations of the United States government and was still able to commit crimes.
Further, comparing a decentralized cryptocurrency to a business hierarchy is indicative of how poorly the prince understands cryptocurrency. While Bitcoin and other cryptos are not perfect and do tend to border on centralization – at least during some parts of their existence – they are nowhere near as centralized as corporations.
It’s a feature, not a bug
Perhaps the most annoying aspect of the prince’s statement is that he warns that Bitcoin is not controlled by a central bank or the United States Federal Reserve. Upon reading this part of his statement, I found myself muttering under my breath, “It’s a feature, not a bug.”
I realize I am preaching to the choir on this one, but we all know that independence from the Federal Reserve Bank and all other banking institutions is one of the most attractive things about cryptocurrency.
Bitcoin is in a strange stage of its life, where more people are hearing about it, but fewer people seem to understand it. I do not think this will last forever, and it is up to all of us in the crypto community to be open to newcomers who have questions while addressing the shortcomings of some individuals’ understandings.
We have to remember that while all this may come second nature to us, to many it is an entirely alien concept. All we can do is share our knowledge with others in a respectful manner. Rest assured that they can make up their own minds. It is just tragic to see influential individuals get so much coverage in bashing Bitcoin.