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Bill Harris Says Bitcoin is the greatest scam in history

Author: EricBBigham , Last Modified, 2022-01-03

Category: finance Keywords: Bill-Harris-Says-Bitcoin-is-the-greatest-scam-in-history

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Bill Harris Says Bitcoin is the greatest scam in history

"Bitcoin Is the Greatest Scam in History," Says Founding CEO of PayPal Bill Harris

So it seems that Bill Harris is tired of beating around the bush when it comes to calling out Bitcoin as a scam. He was quoted recently in several media sources as saying "In my opinion, Bitcoin is a colossal pump and dump scheme, the likes of which the world has never seen."

for pump and dump think Wolf of Wall Street and Boiler Room...!

Truth be told there are many credible sources who support his position, for example take the consulting firm 'Ernst & Young', they published research which has estimated that the cryptocurrency Bitcoin is probably funded to the tune of 10% by stolen money! This supports the view that there is a huge potential for money laundering during what are known as ICOs short for Initial Coin Offerings process. ICOs are a fairly new phenomenon in the world of finance and as such lack the mature regulatory framework of established markets, not that that ever made a huge difference to those determined to exploit them.

Mr Harris believes that ill informed buyers are likely to be the ultimate losers. He states that in their "greed" they become caught up in a buying frenzy that ultimately costs them their savings. A cautionary call indeed.

But it does appear to be the same with most bubbles, or at least from what I can fathom. The "market" for quick gains is ever present, and ironically we do have two relatively fresh examples which demonstrate this to us all, we saw this in the both the dot com bubble of 2000 and the property bubble of 2008. In both bubbles we heard tell of fraudulent get rich quick merchants who simply preyed on an innocent, albeit greedy somewhat naive investor populous.

As we see more and more of the so called baby boomer generation depending upon their retirement pots, only to discover they fall short of the required capital to comfortably finance the increasingly longer lives into retirement that boomers can now expect to see, we see the increased potential for easy pickings by unscrupulous tech savvy investment marketeers, who are only too happy to promote the next big fools gold-rush.

Harris, who was himself a co-founder of the money transfer website papal, has stated that Bitcoin has NO INTRINSIC VALUE at all, he likens it to gold, which is itself an asset class that has no intrinsic or revenue generating capacity, people hold it in the hope it will be a store of value and a hedge against inflation. For this to work, it requires that someone is willing to pay more for it than you did, when you decide to sell. There is no real reason anybody should however unless they believe demand will stay strong into the future. Gold has proved to be a fairly stable store of value in this regard, however Harris points out that Bitcoin is highly unstable due to its wildly fluctuating price.

I would add to that and say that gold has some value as a precious metal which is used for other things than just currency, it is a rare metal and this is what created its value as a currency reserve.

Proponants for Cryptocurrency claim it is valuable in three ways

1. As a means of Payment
2. As a store of value and
3. As a thing in itself

He argues, that Bitcoins are accepted almost nowhere, and in some cases cryptocurrencies are accepted nowhere at all. The volatility of Bitcoion is such that its value can swing upto 10% in a single day, rendering it pretty useless as a payment mechanism, however I would point out that stock markets often swing with such volatility and stocks and shares have and are often used as a currency in M&A Transactions all the time. Each company using its own equity shares as a form of currency, when they can find a seller willing to accept it. Surely the same can be said of Bitcoin?

He claims also that cryptocurrencies are far less reliable than ordinary banks and brokers. Again this might be a function of the nascent market that is cryptocurrencies, all players and dealers in any market lack the regulatory constraint of a mature marketplace. Regulators are fast stepping up to the plate as the rate and pace of cryptocurrencies is obliging them to do so, they do not wish to have more egg on their face than is necessary for a two year-old child!

Harris also points out the Greater Fool Theory, which states that an item may only have value if people believe that other people will pay more than they did for the same thing. I mentioned this earlier above, and again we could argue the same about property markets. House prices are prone to bubbles precisely for the same reason, all though property can generate income streams, they typically do not change from day to day or even year to year, yet sellers and buyers price in huge swings in price based on greed and fear.

He also points out that some cryptocurrencies are redeemable for physical items such as clothing, yet he believes that these transactions resemble tokens similar to savings coupons, and there is therfore no real need to have complex cryptocurrency systems in place to facilitate transactions of this nature, just use simple tokens instead.

He goes on the say that all existing currencies serve the purpose better than crypto and his belief is that the best purpose a cryptocurrency like bitcoin can possible serve is that of criminal activity.

Crypto currencies use a complex distributed block-chain for mining coins and there are supposed to be a limited number of available coins, so mining them is the only way to generate new currency supply. Harris believes that this does not make them valuable, he said he could agree to limit his autograph to produce the same level of scarcity yet it would equally be valueless even though it might be scarce.

I for one am still on the fence when it comes to these currencies. Blockchain technologies are probably here to stay and they do serve several useful functions as distributed kedgers,