The media tends to focus on doom-and-gloom stories, because sensationalist headlines attract larger audiences. However, when journalists go so far as to misrepresent facts and sway the public in one direction or another, these stories can be dangerous. This is especially true when talking about a new technology that has the potential to change lives for the better. Public opinion can mean the difference between this potential being realised, or crushed completely.
That is the situation with Bitcoin.
The media frequently talks about Bitcoin now, but often misrepresents the facts. Coverage tends to focus on the negatives. Stories about money laundering, drug trading, exploded exchanges, and price crashes predominate. The coverage rarely mentions the role of the positive, entrepreneurial Bitcoin community in launching a technological revolution that is at the forefront of dramatically improving lives. Venture capitalists are pouring resources into this technology that they say combines the power of gold with the convenience of the Internet. Bitcoin forums are buzzing with excitement about an impending financial revolution.
So why are some people so positive, and others so negative?
Criticism of Bitcoin overwhelmingly comes from the uninformed, while support often comes from the technologically competent. Paul Graham, a prominent venture capitalist, refers to Bitcoin as a paradigm shift that is unfortunately “derided as a toy, just like microcomputers.” Accomplished venture capitalist and entrepreneur Marc Andreessen has written that the potential of bitcoin today is analogous to personal computers in 1975 and the Internet in 1993. Today, it is the preoccupation of “nerds.” Tomorrow, it can change the life of everyone.
Andreessen has done more than just speak Bitcoin’s praises; he has invested just under $50 million in Bitcoin-related startups.
The difference in attitude is education.
Bitcoin is beginning to transition away from its volatile beginnings and theoretical potential into a mainstream phenomenon, with real results for the layman just over the horizon.
Critics commonly mention Bitcoin’s role in money laundering and corruption, epitomized by the infamous online market Silk Road. What is less well publicized is that Bitcoin can also serve the public good. Venture capitalist Tim Draper recently bought $19 million worth of Bitcoins confiscated from Silk Road, and plans to use them to provide liquidity in Third World countries as a means of combating rampant inflation and corrupt government policy. Draper’s initiative is an exemplar of Bitcoin’s coming of age.
There are 2.5 billion unbanked people in the world, and now by just giving them access to a cell phone we have potentially added 2.5 billion people to the global economy. Furthermore, with bitcoin you can send microtransactions directly to people anywhere in the world, without crippling fees from middlemen or fear of government extortion.
On top of this, basically anything you can buy for US dollars, you can now also buy with bitcoin. Seemingly every week a new brand name retailer is added to the list of merchants who accept bitcoin, which now includes the likes of Overstock, Expedia, and OkCupid. The price of Bitcoin is on the Bloomberg terminal [XBT] as well as Google Finance [CURRENCY:BTC].
Despite all the endorsements and exciting developments, a recent Reason-Rupe poll shows that only 8 percent of people say that they really understand Bitcoin, while 56 percent want to ban it.
In response to the fearmongering and lack of credible information about Bitcoin, I started my “Bitcoin Girl” project as an accessible and fun way to present videos that demonstrate the human impact of this technology. Bitcoin Girl is part of a larger initiative by the nonprofit Moving Picture Institute. Called the Bitcoin Project, it uses entertainment to highlight how crypotcurrencies such as Bitcoin have the potential to create incredible positive economic and social change.
If we want to avoid uninformed legislation crippling Bitcoin in its infancy, we need to educate the people who understand humans better than computers.