With any new emerging and disruptive technology you should always expect a wide variety of propaganda and disinformation to circulate the media. Bitcoin was no exception to this rule.
Bitcoin was Born
Bitcoin had it’s first block mined way back in 2009, Sataoshi Nakamoto left us a curious message in this first block:
“03/Jan/2009 Chancellor on brink of second bailout for banks,”
The reason for leaving this message in the first Bitcoin block is not currently known however many believe it is left as a mark of Bitcoin’s Birth date and as a ‘jab’ at the traditional corrupt financial institutions that Bitcoin was designed to disrupt. Either way, this first block, what is known as the Genesis block marks the beginning of a new era, Blockchain, Bitcoin and Cryptocurrency was born.
Bitcoin in it’s early years had little media traction, we had the occasional mention of it in some of the Tech Blogs, there was a small presence over in Bitcointalk, which might I add was created by Satoshi Nakamoto.
By the middle of 2011 we began to see Bitcoin popping up in the Mainstream news, one of the first stories being about a Bitcoin crackdown:
Two senators are pressing federal authorities to crack down on an online black market and “untraceable” digital currency known as Bitcoins after reports that they are used to buy illegal drugs anonymously. – Reuters, June 8th, 2011
Which was followed shortly after by Bitcoins first obituary in an article entitled ‘So, That’s the End of Bitcoin Then’ from Forbes:
‘The Bitcoin community faced another crisis on Sunday afternoon as the price of the currency on the most popular exchange, Mt.Gox, fell from $17 to pennies in a matter of minutes. Trading was quickly suspended and visitors to the home page were redirected to a statement blaming the crash on a compromised user account. Mt.Gox’s Mark Karpeles said that the exchange would be taken offline to give administrators time to roll back the suspect transactions.’
MtGox would be Bitcoins second key stepping stone into the mainstream media, but not before the Dark Net did the rounds.
We began to see Dread ‘Pirate’ Roberts and his Silk Road enterprise begin popping up in the press in Bitcoins 3rd year of existence:
‘In the year since Senator Joe Manchin called for the “audacious” drug-selling website Silk Road to be “shut down immediately,” the world’s most high-profile underground pharmacy hasn’t just survived. With $22 million in annual sales and around double the commission for the site’s owners compared with just six months ago, its black market business is booming.’ – Forbes, Aug 6th, 2012
Silk Road and Bitcoin appeared in the press for another whole year as Governments and State Authorities scrambled around trying to figure out how to shut down this new uncensored market, eventually Silk Road was shut down in October 2013:
The value of bitcoins has dropped after the closure of the clandestine Silk Road online marketplace.
The FBI seized bitcoins worth approximately $3.6m (£2.2m) on Tuesday. – BBC News, Oct 3rd, 2013
Now interestingly even though we have been led to believe that Silk Road was the bulk of Bitcoins volume in these early days of Bitcoin the closure of silk road had little effect on price:
The going rate for the virtual currency dropped from more than $140 (£86) to around $110, before climbing back up to $123 (£75).
This type of volatility is now what traders have come to expect from Bitcoin trading, with or without news connected to the currency.
MtGox is probably even to this day still the most referred to incident when the subject of Bitcoin is present in the media. Mt. Gox was a Tokyo based bitcoin exchange. Mt. Gox began trading from mid 2010 through to 2014, by which point is was handling over 70% of all bitcoin transactions worldwide. What many people outside the Crypto space may not realise is that Mt. Gox was around long before Bitcoins inception. Mt. Gox began as a trading site for “Magic: The Gathering Online” cards, basically like stocks for nerds.
The name MtGox comes from “Magic: The Gathering Online eXchange”. Jed McCaleb the sites founder went live with this in 2006 for only about 3 months before moving onto other projects. However, the domain was to be reused later on for what we now know as the World’s first major Bitcoin Exchange. MtGox was sold to Mark Karpelès in March of 2011 as McCaleb claimed he couldn’t dedicate the time needed to take MtGox to ‘the next level’
Mt.Gox shut down in 2014 following an announcement that 850,000 bitcoins belonging to customers were missing and likely stolen, services were suspended in february of 2014, by April the company began liquidation proceedings. What actually happened is not exactly clear although it is now believed that these stolen bitcoins were actually taken from MtGox’s hot wallet over a long period of time starting in 2011 through to it’s closure date.
As you’d expect the collapse of MtGox caused a collapse of the Bitcoin value, it went from it’s all time high at the time of just over $1000 back down to under $150.
As you’d expect the media responded with another round of commiserations and obituaries for Bitcoin:
Sorry, libertarians: Your dream of a Bitcoin paradise is officially dead and gone – Salon, March 7th, 2014
There are a dozen or so more obituaries for Bitcoin in 2014, if you want to see the full list goto 99Bitcoins great archive of Bitcoin obituaries.
Up until now the press has been relatively quiet on Bitcoin, although momentum did begin to pick up as we headed into 2014. It’s hard to find any article within the mainstream press which discussed this new ground breaking technology in any depth and with any positivity. What we did hear from the press in just about every article relating to Bitcoin was it’s connection to the Dark Net, its highly volatile price and of course the MtGox collapse. However, up until this point we have heard very little about Blockchain. Well, this was about to change.
This is where the media begin get a little bit interested in Bitcoin, without having to actually like it. Blockchain which is one of the major underlying technologies behind the Bitcoin protocol has the potential to disrupt so many sectors, its a very powerful technology and virtually no one is denying this, however, regardless of the fact that Satoshi Nakamoto’s Bitcoin was the first to use it most of these same Blockchain admirers are still Bitcoin haters. An article entitled ‘Bitcoin in the Headlines: Blockchain Good, Bitcoin Bad’ following article from Coindesk summarizes this common narrative quite well.
Blockchain began to be the new buzz word within the financial and tech sectors. This underlying technology of Bitcoin was ‘going to revolutionize the World!’, but apparently Bitcoin wasn’t, in fact Bitcoin was still dying on a near weekly basis now according to most mainstream news platforms.
This new narrative of reporting on Bitcoin was here to stay and in fact it’s still strong in most news outlets today. Though Bitcoin has picked up some notable fans since it’s early days, such as Forbes who repeatedly publish pro-bitcoin articles, however to most it is still merely a form of currency used by criminals and the real discussion is Blockchain.
Although we consider Bitcoin to be relatively private and decentralized, blockchain backed systems don’t necessarily have to be decentralized or private, in fact a centralized blockchain backed currency could be an extremely invasive and dangerous technology. Imagine a World where every transaction you made could be traced forwards and backwards throughout history, imagine a World where tax could be automatically deducted from any incoming transaction you received, imagine a World where your entire wealth could be frozen instantaneously.
Well, technically most of these things can already be done to a degree using the current traditional banking system, with the exception of Cash (which they are trying to phase out). But using a centralized blockchain technology such as something like, errrm, Ripple (which technically isn’t blockchain, but it serves this example well) for example, Governments would have a far greater control over individual wealth, Tax could be entirely automated and even built into the ledger technology.
Blockchain in the wrong hands can in fact be potentially very dangerous. James Corbett did an interesting video on what he calls ‘The Bitcoin Psyop’ and although you may think at first glance this is an anti-Bitcoin piece, it is not:
The War on Terror (and Bitcoin)
As we previously mentioned, in it’s early days bitcoin was generally associated with illegal drug and weapons traders, well it would appear that this criminal association narrative has been taken to the next level, Bitcoin is now responsible for large amounts of Terrorism (or so they’d like you to believe):
‘One of the latest tools terrorists are using isn’t a new kind of bomb, gun, suicide vest or other device that can kill and maim. The tool is bitcoin, the virtual currency created and exchanged using a decentralized network of computers, without the involvement of government and banks’ – Fox News, Jan 9th, 2018
That’s right, for decades terrorists have been using dollars and other fiat currencies to fund their arms tradings, but now what is likely less than 0.001% of terrorism is being funded by Bitcoin.
Of course for anyone that knows anything about Bitcoin they will know these particular terrorists must be lacking in intellect, Bitcoin is a terrible choice for any criminal wishing to hide the money trail. Which is why 99.999% of terrorism is still funded by fiat currencies and often by Governments themselves either directly or indirectly.
So what can we expect from our beloved press over the coming months and years?
Well, it’s difficult to say, we can definitely expect more of the same from many. There will always be Bitcoin obituaries after any major crash, there will always be talks of bubbles and tulips after any bull run, there will be praising of Blockchain and naysaying of Bitcoin from the traditional financial institutions.
But one thing you can be sure of now, media makers will be profiting from their own propaganda, where news can shift the value of an asset by 20% or more it’s highly unlikely everyone is playing fair.
The best advice we can give is this, the media lies, they have always lied, they care not for truth but merely sales and profit. As for big names in Banking and the old crony financial institutions, well they do not like what they do not understand, nor do they like that which threatens the very system they uphold. With this in mind it’s best to dismiss their narrative on Bitcoin, do your own research, make your own decisions. Bitcoin is not about becoming a millionaire, it is about decentralizing wealth, banking the unbanked, removing criminal banking cartels and paving the way for a better future.
Bitcoin is awesome, it is a baby trying to stretch it’s little legs out and pull its neck up for the first time. You wait until she starts walking – now that will be something special!
Image courtesy of charles taylor