Krupnick Campbell Malone Buser Slama Hancock Liberman.

While there is a steady rise in awareness and interest in Bitcoin and other cryptocurrencies, there is still a lot of misinformation regarding this new form of payment, and much of the confusion is coming from some very influential individuals. Every day, another government official, world leader, or Wall Street banking executive weighs in or opines on the validity and credibility of Bitcoin and other cryptocurrencies. With views spanning the entire spectrum, it is difficult to form an educated opinion as to what the future holds for this novel and nascent technology. However, some of the individuals who have publicly stated opposition to cryptocurrencies, and have therefore used their status and platform to discredit and vilify it, possess little to zero understanding of the technology and its potential impact.

Recently, Saudi billionaire investor Prince Alwaleed bin Talal decided to join the fray and voice his opinion on the phenomenon that is Bitcoin: “It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision of any central bank.” These comments follow in the wake of JP Morgan Chase CEO Jamie Dimon's continued crusade against Bitcoin, which he has called a “fraud” that will eventually “blow up.”

To understand why these prominent figures might discredit cryptocurrencies, it's important to understand Bitcoin and its projected future. Bitcoin offers an alternative method of payment that bypasses the traditional centralized banking system and, to some extent, may even threaten their existence. One need only to look at the amount of capital being invested into this market. Bitcoin has already surpassed major stocks, such as Goldman Sachs, Morgan Stanley and Netflix, in terms of market capitalization, which is the value of all the bitcoin in circulation. This is by no means indicative of Bitcoin's future success, but does offer evidence that Bitcoin is more than just a “fad.”

Yet, despite the continued success Bitcoin and other cryptocurrencies have been experiencing, we continue to get a daily dose of FUD (fear, uncertainty, doubt) from many public figures connected to the financial industry. The question to consider is—why? If opponents are so convinced that Bitcoin will fail, why do they feel compelled to disparage it any opportunity they get? One may argue that these individuals are acting out of a moral duty to the public to look out for their financial well-being. However, government bailouts may suggest otherwise. Furthermore, how can anyone be so sure of Bitcoin's failure, yet at the same time praise the technology that serves as its foundation?

Instead of focusing on developing and fostering beneficial practices and uses, or focusing on collaborative and meaningful regulation, the opposition continues to try to brand cryptocurrencies as criminal and nefarious. “Bitcoins are used on the Darkweb to buy guns and drugs!” and “bitcoins are being used to launder money and fund terrorism” are some of the most frequently cited arguments against Bitcoin and cryptocurrencies. Yet, fiat currency has been used for centuries to commit each of these acts. Does that mean we should outlaw fiat currency? Of course not. Instead, a concentrated and collaborative effort has been made to create regulations and guidelines to help prevent criminal use of fiat currency, which has helped reduce (but not eliminate) the frequency by which these acts take place.

Moreover, to stigmatize this new technology due to its purported illegal uses by a small segment of its population base is hypocritical and ignorant. An easy analogy is to say knives are used for stabbing. Clearly that is not the purpose of knives, and while anything can be used as a weapon, the intent of Bitcoin, like a knife, is not for evil use. As a morally agnostic technology, Bitcoin and its progeny should not be branded as an instrument or tool used to break the law. It is the person who uses the tool or instrument who should be blamed for the negative actions or consequences that flow from its use, not the tool or instrument itself.

Despite the endless amounts of information that is available to the public and the exhaustive effort being put forth by many organizations and individuals to educate the public at large, there are still some who cannot (or refuse) to accept the idea that bitcoin and other cryptocurrencies may be legitimate. The bottom line is that no one knows what the future holds for Bitcoin and cryptocurrencies. Yet, the criticism will continue to mount as Bitcoin and other cryptocurrencies continue their volatile run. There will always be those who oppose it for one reason or another, but there is a difference between spreading fear and uncertainty and preaching caution.

Jesse Fulton is an associate at Krupnick Campbell Malone Buser Slama Hancock Liberman, and can be reached at 954-763-8181 or [email protected].