The article, titled ‘Flaws in Bitcoin make a lasting revival unlikely’, is part of a series of recent contrarian indicators for crypto.
Leading mainstream publication The Economist has added its vote to a number of recent suggestions that crypto has a bright future – though it doesn’t intend to.
The article gives a quick overview of the crypto boom of 2017 and the bust that followed, including the proliferation of cryptocurrencies, bitcoin’s crash from $20,000 down to the $3k level, and Bitmain’s failed IPO. It then offers a short comparison with tulip bulbs and the dotcom bubble.
The Economist goes on to note recent insights, such as very few bitcoin transactions actually being used for e-commerce, the amount of speculation, and the problem of wash trading inflating real volumes. Then it brings up the scaling issue, that cryptocurrencies are ‘too clunky’ to compete with mainstream payment processors.
A final part of the long list of problems includes bitcoin’s deflationary nature (something most in the space consider a feature, not a bug), and the problems posed by irreversible transactions, including fraud and QuadrigaCX’s inaccessible cold storage reserves. Then the article just kind of finishes with a paragraph about the crypto community hopelessly thinking things will get better.
It’s a bleak picture, a catalog of failures and shortcomings. And this is exactly the kind of article that should cheer the crypto faithful. It is beautifully one-sided. There is no balance whatsoever. Nothing about the tech being built or the investment in blockchain or the real use cases being deployed or the institutional solutions being developed.
This is the literary equivalent of a trader who never understood the market throwing up his hands and panic-selling. And let’s just take a look at what The Economist says about itself on its home page. ‘Enjoy unrivalled analysis of the issues that lie behind the headlines… With brevity, clarity, opinion and wit, we distil what’s important on the global agenda and, most importantly, what to make of it. Our objectivity of opinion, originality of insight and advocacy of economic and political freedom set us apart from other publications. That's why six million people read The Economist every week, including the world's leading political and business figures.’
Just to draw the relevant line to your attention: ‘Our objectivity of opinion, originality of insight and advocacy of economic and political freedom’...
The Economist displays none of these qualities in this article. It’s a hatchet job of unoriginal material and lack of journalistic impartiality, as well as surprising laziness from a publication that should know better.
TL;DR the crypto world should be hugely encouraged.
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