Yesterday, Gizmodo writer Matt Novak wrote a scathing piece on bitcoin called “Bitcoin Surges 15% Overnight Because Nobody Learned Their Lesson After the Last Crash.”
In it, Novak unleashes fury on everything from bitcoin’s lack of value to its impact on the environment.
Not only is it riddled with factual errors and holes, but it’s also a misleading and dangerous narrative for hundreds of thousands of readers. Of course, bitcoin has its flaws, and we should address them with accurate reporting and reasonable debate. But this was not that. As a respected technology news source, Gizmodo has a responsibility to do better than publishing an opinionated rant and calling it news.
Firstly, the decision to print this under “news” is misleading and dangerous. Editors, if you consider this “news,” fact-check it. Otherwise, put it where it belongs: “opinion” or “op-ed” and issue a disclaimer.
Let’s move on to the actual errors in the piece.
Well, that’s patently untrue. It’s worth exactly $4,926.97, measured by the US dollar, the world’s largest and most liquid asset, at the time of writing. I think that counts as a real measure.
Putting that aside, we can say the same thing about the dollar or any other currency. Currencies only have value because we agree they have value. Bitcoin is no different at all.
This shouldn’t have been too difficult to figure out since Gizmodo itself has reported on using bitcoin to pay for bills. Come on, guys. No-one is arguing that bitcoin is as widely accepted as the dollar, but it’s not fake money by any stretch.
Untrue. Bitcoin is backed by more than ten thousand mining nodes around the world which operate the most secure financial infrastructure on the planet. Between them, they confirmed more than 2 million transactions last week alone.
And let’s go back to “real” money for a minute. What exactly backs the dollar? The US dropped the gold standard in 1971, so the dollar is backed only by “full faith” of the government. Just like bitcoin, there’s no hard asset backing the dollar, either.
You’ve actually got a point on this one, but let’s give it some context. Cash is also devastating to the environment. Where do you think we get the metal for coins? And that paper money didn’t get into your pocket without cutting down trees. You think Mastercard and Visa don’t have a carbon footprint? (They each consume as much energy as Bitcoin mining, in case you’re wondering).
As the Cato Institute concluded:
“We can only conclude that reports of cryptocurrencies’ wreaking environmental havoc have been greatly exaggerated. An examination of transaction volumes shows that Bitcoin’s power use is not outside the league of intermediated payments systems.”
I’m as desperate as you are for a low-impact monetary system. At least the crypto community is working on more efficient options, like the Lightning Network and proof-of-stake models.
Half-true. Google and Facebook banned crypto ads in early 2018. But they reversed the decision to allow legitimate bitcoin businesses to advertise, while limiting scam artists. Again, your own website covered this news, so fact-checking shouldn’t have been too difficult.
The irony is, Novak raises some important criticisms of bitcoin. I’m no evangelist, and I share the same concerns about energy consumption, hacks, and scams. But these issues require sensible reporting and educated debate.
These issues are drowned in outrageous rhetoric, assumptions, and outright lies in Novak’s rant. Mainstream media must improve when it comes to reporting cryptocurrency. Opinions and rants are not news. Do your research and fact-check the claims made.
This post was last modified (Eastern Time): 03/04/2019 10:14
Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.