'Bitcoin Is a Scam... a Colossal Pump-and-Dump', Says Former CEO of PayPal and Intuit

Siamak Masnavi

Bill Harris, former CEO of Intuit (1995-1999) and PayPal (1999-2000), in a post for Recode, calls Bitcoin (BTC) a scam and "a colossal pump-and-dump scheme, the likes of which the world has never seen."

In this article, Harris, who is the founder of online personal wealth management company Personal Capital, argues that "a bitcoin has no value at all" since it fails as a means of payment (very few places accept it, in addition to the problem of price volatility), it is not a good store of value (again, due to its extreme price volatility), and it lacks any intrinsic value.

He claims that the best use case scenario for cryptocurrencies is "criminal activity" since crypto transactions are harder for the authorities to investigate. He says that's why Bitcoin's heaviest users are criminals. To prove his point, he points out that crypto exchanges are not that safe, that many ICOs are scams, and that much of remote hacking involves cryptojacking.

Next, Harris explains that even the non-criminal portion of Bitcoin's users are not that innocent since most of them don't bother to report the sales of their bitcoins to the tax authorities.

He then moves on to complain about how slow and expensive it is to send someone bitcoin.

And, finally, as if all of that was not enough reason for him to dislike Bitcoin, he says that Bitcoin is "absurdly wasteful of natural resources" since the process that creates them -- mining -- is computationally expensive and requires a lot of electricity.

Data Scientist Says Bitcoin's Network Fundamental Are 'Stronger Than Ever'

Siamak Masnavi

Data Scientist Rafael Schultze-Kraft, Co-Founder and CTO of Berlin-based on-chain market intelligence startup Glassnode, says that Bitcoin's network fundamentals are "stronger than ever", and that this is why he is long-term bullish on Bitcoin.

Yesterday (May 10), with less than 24 hours left to Bitcoin's third halving, he used the Glassnode platform to explore data and metrics across the Bitcoin blockchain to find out "how on-chain fundamentals have developed historically, and how they compare to the last halving."

This is how the on-chain metrics he examined have changed since the last halving in 2016:

  • Network Growth: the number of Bitcoin addresses has gone up 234%.
  • Growth Rate: the daily number of addresses added to the #Bitcoin network has gone up 68%.
  • Retail Addresses: the number of Bitcoin addresses holding at least 0.01 BTC and at least 0.1 BTC, which are setting new ATHs in 2020 "almost on a daily basis", have gone up by over 204% and over 142%.
  • Wholecoiners: the number of Bitcoin addresses holding a minimum of 1 BTC is approximately 64% higher.
  • Whales: the number of Bitcoin addresses holding at least 1000 BTC is up 13%.
  • Network Activity: the number of daily active Bitcoin addresses is 59% higher.
  • Volume: Bitcoin's daily transaction count is up 44% and Bitcoin's daily on-chain volume (in USD) is up 682%.
  • Miners: Bitcoin's hash rate has increased more than 6800%.

The Glassnode CTO says that although it is true that Bitcoin "remains a volatile asset and short-term price action is still subject to large drops", if we zoom out, we discover something that investors with "a long-term horizon and low time preference" already know: Bitcoin's network fundamentals "keep on painting a strong and unambiguously bullish picture."

Featured Image by "SnapLaunch" via Pixabay.com