CNET Posts Misleading Headline – Riding Bitcoin Hype to Get Page Views
Recently CNET ran an article titled “Bitcoin is a Legitimate Form of ‘Currency,’ a Federal Judge Rules
I have researched a bit about bitcoin and even considered mining some coins, but I always thought of it as a novelty until I got through about 150 pages of The Creature from Jekyll Island and now it seems completely likely that Bitcoin will one day be a mainstream currency. I don’t completely understand where it get’s it’s “backing”. The US fiat currency is only strong as long as our countries government and rule of law stays strong since we are not in any way tied to a standard such as gold. But psychologically people feel like US currency is valuable because if needed the strength of the US government’s promise is valid.
But what promise is there that bitcoin will exist tomorrow? The only validity fiat currency has is the validity granted to it.
What’s more, it’s not clear to me if the judge in this case “ruled” that bitcoin is currency. That seems to be well beyond the authority of a judge. The case was about fraud, not whether or not bitcoin is real money. Let’s say I told people if they give me 10 pounds of potatoes every month, I would sell them, invest the money, buy potatoes and give them 12 pounds of potatoes the next month. But, it turns out all I was doing was taking future deposits of potatoes to pay the future promises without selling or investing. I would be committing fraud. The judge could find me guilty without “ruling” that potatoes are a legitimate form of currency. I can buy and sell potatoes, exchanging them for US currency. I can even buy and sell options on potatoes on a commodity exchange. By the standard imposed by the reporter in this story, we should see a headline when the judge finds me guilty in my potato ponzi scheme, “Potatoes are a ‘legitimate’ form of currency, a federal judge rules.”
This seems like opportunistic journalism playing fast and loose with facts on a topic that too few people really understand in order to drum up some hype and some traffic to their page. The headline creates the false impression that bitcoin is somehow operating outside of the law or legitimacy conveying to it a measure of excitement and fascination. It is not illegitimate and it’s really not that exciting. Anything that two people use to establish a transfer of value from one party to another that can be converted in to another measure of value is currency, and no, we don’t have to get a judge to say that’s true.