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TransferWise CEO Thinks Talking Down On Bitcoin is a Good Business Strategy

Last Updated March 4, 2021 4:48 PM
Justin OConnell
Last Updated March 4, 2021 4:48 PM

Mike Hearn wrote a Medium  post which went viral and was the topic of much debate in the Bitcoin world. In his opinion, the Bitcoin community was dead.

He wrote: “[Bitcoin] has failed because the community has failed… Worse still, the network is on the brink of technical collapse.”

Hearn has spent considerable time in the trenches of the Bitcoin technology. He is one of the foremost Bitcoin experts in the world. If anyone had enough perspective to make such a bold proclamation, it was he.

At the time of writing, Bitcoin is priced at approximately $445, according to the Coinbase price. When many first entered the Bitcoin space, the price was $4. Plans to launch a Bitcoin ETF, by the Winklevoss twins and others, persist. IBM’s leading blockchain minds celebrate the Bitcoin technology behind closed doors. 

Read More: Bitcoin Has Died Nearly 100 Times

CEO of international-payments app TransferWise, Taavet Hinrikus, recently said: “Bitcoin, I think we can say, is dead. There is no traction, no one is using bitcoin. The bitcoin experiment, I think we can say, is over.”Bitcoin transaction use, excluding popular addresses even, demonstrates a steady increase over time.

In the interview with Yahoo Finance, while promoting his company’s Mexico  launch Hinrikus sounded very ignorant on the topic of Bitcoin.

“What really happened was a gold rush,” he said. “People bought bitcoin because they thought it would be worth more tomorrow. And a lot of people got lucky. But we’re not seeing real people use bitcoin. And we don’t know what problem it solves. Now, blockchain, I think, is a genius advancement in technology. But I’m not sure we’re seeing yet where to apply it. I’m pretty excited about R3 and Digital Asset Holdings . I think there are many areas where using blockchain is great, but it’s still early days.”

Hinrikus brings nothing new or interesting to the discussion about neither Bitcoin nor blockchain. Bitcoin is worth more today than yesterday – in a macro sense – and people have long stated what problem it solves: efficient and verifiable records of data. In the Bitcoin example, blockchain’s solutions are applied to digital payments (you know, what Hinrikus does). There are other, politically-loaded use cases for Bitcoin but we don’t need to touch on those to address Hinrikus. His comments on blockchain follow the Party Line, quite boringly, and bring nothing new or interesting to the discussion.

JPMorgan CEO Jamie Dimon, as the puff piece on TransferWise at Yahoo  states, has opined  that Bitcoin is “doomed.” His firm is working with R3 CEV on how blockchain can be applied to finance. He believes Bitcoin doesn’t have much a future because of the political pressure that will be put on it. Many others cite this, as well, as a reason why Bitcoin could face headwinds ahead. That, for instance, it does not have a KYC nor AML layer, makes Bitcoin a target.

TransferWise is not a bitcoin company. The company promises customers faster transfers, and smaller fees, on remittances internationally. These are the solutions Bitcoin provides. TransferWise and Bitcoin are, in some ways, competitors.

As CCN.com reported, Bitcoin’s death is continuously, greatly exaggerated. It’s had obit after obit written for it.

Hinrikus’ accolades include being the first hire at Skype, where he was director of strategy. Included among his investors are Peter Thiel and others.

“We’ve certainly paid lots of attention to bitcoin and blockchain,” Hinrikus said. Notice, Hinrikus doesn’t say he’s ever paid in the currency; that is, he’s never used Bitcoin. So, objectively, he doesn’t have firsthand experience with the currency and, thus, how it works. It doesn’t sound like he has a competent blockchain advisor either. Can he be trusted to form an objective and academic opinion on Bitcoin? No. His opinion can’t be trusted, in particularly considering his space, digital payments, is in the middle of a disruption kicked off by the Bitcoin technology and his firm is in the middle of it.

As a newcomer to fintech, as the puff piece by Yahoo states of Hinrikus, perhaps he is not in a position to make such proclamations without lending himself to criticism of egoism and sensationalism.

Yahoo concludes: “If tech entrepreneurs like Hinrikus feel they no longer need to keep paying attention, that could be a problem for the coin and its future viability.”

I don’t think this is true. It’s not tech entrepreneurs like Hinrikus who have been using the technology, as he seemingly admits, in the first place.

As a Bitcoin skeptic myself (but also a user), Hinrikus’ comments come off as disingenuous and self-serving. He’d best market his product through promotional offers and successful use cases than belittling new technologies.