Day in, day out, we see mainstream media reports on crypto. More often than not, these are focused on bitcoin.
Bitcoin is the poster child for the broader crypto world. And so it should be. It’s been around longer than most. It has the largest number of users and active wallets. And I think it has the most inherent value.
However, it is also one of the most inaccurately reported topics I’ve ever seen. Fundamentally, the average person doesn’t understand its history, its benefits, its risks and its future potential.
That’s not necessarily the fault of people. But a huge part of the lack of understanding falls on the shoulders of mainstream media.
When we talk about mainstream, we’re talking about the massive circulations that pump out ‘news’ on an hourly basis. Companies like Bloomberg, CNBC, Australian Financial Review, BBC and MSNBC.
And it’s quite easy to spot when these ‘news’ outlets are flying by the seat of their pants.
Take for instance a recent article on bitcoin that popped up on Bloomberg.
The headline reads,
‘Hackers are targeting bitcoin with a leaked NSA software tip, report says.’
Sounds scary, and ominous. If you’re new to crypto or not quite into it yet, that’s enough to scare you away. After all, who wants to get involved with something that hackers are targeting and that the NSA is involved in?
Not me.
But it’s pretty easy to sift through the BS.
Take for instance, the opening paragraph:
‘Hackers are illegally generating Monero, Bitcoin and other cryptocurrencies by exploiting a software flaw that was leaked from the U.S. government.’
First, it’s impossible to ‘illegally generate’ bitcoin. The only way to ‘generate’ bitcoin is to mine it. And in doing so, you need computing power to solve an algorithm, (a really hard one) which will result in mining a block, adding to the blockchain and getting a reward of bitcoin.
This is the very foundation of bitcoin’s blockchain — called proof of work. And that’s what the article neglects to properly emphasis — these hackers are just stealing computing power.
The article continues to express that these attacks raise questions about ‘…the security of one of the fastest-growing corners of financial markets.’ By that, they mean questions about the security of bitcoin and its network.
And then they chime in with this absolute gem of a paragraph,
‘When hackers illicitly generate currency using others’ computers, it creates free money for them and could erode the overall value of the currency by increasing its supply.’
This is factually wrong. And nowhere in the Cyber Threat Alliance report which the article references, do they state that creating ‘free money’ could erode values by increasing supply. [openx slug=inpost]
Don’t believe everything you read – the mainstream have no idea about Bitcoin
The facts are that bitcoin’s supply cannot be increased. There will only ever be 20,999,999.9769 bitcoin.
Not all of them are created. And over time, the block rewards that miners receive halve, and halve again, and halve again.
Originally, the mining reward was 50 BTC per block. Then it was 25. Now it’s 12.5, which is the ‘third’ reward era. Soon enough it will be 6.25, the ‘fourth’ reward era.
At the current difficulty of mining and the halving of rewards all the way through to the ‘34th’ reward era, it’s anticipated that by around the year 2140 all bitcoin will be in circulation.
Bitcoin’s blockchain can be ‘forked’. And it has done so several times already.
This creates a similar but inherently different blockchain that’s not bitcoin — and ultimately has nowhere near the value or strength of the original bitcoin blockchain.
The truth is, these illicit hackers aren’t increasing the supply at all. They’re just stealing computing power to mine bitcoin like every other bitcoin miner.
In that sense, there’s absolutely no damage whatsoever these hackers are actually doing to bitcoin or its blockchain.
The only damage and illegal activity taking place is unauthorised access to computing networks and power they don’t own.
It’s a bit like stealing petrol from the pump. You’re not increasing the fuel supply because you now have the fuel. You’re just making sure someone else doesn’t have a chance to it.
But the bitcoin network, and the security of it, is stronger than any hacking group. Even if they all combined their illegal computing power they couldn’t control the bitcoin blockchain.
The size and decentralised nature of bitcoin now makes it perhaps the single most secure network in existence.
The point here is simple. Don’t believe what you read in the mainstream. It’s often inaccurate and sometimes flat out wrong.
They’re a big part of why the world hasn’t yet caught onto the crypto opportunity.
Regards,
Sam Volkering