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JPMorgan CEO Jamie Dimon says Bitcoin is a fraud that will eventually blow up
- fiftyacorn 9y agothe contrarian investor in me makes me want to jump onboard the bandwagon now if a bank CEO thinks its dodgy
- xutopia 9y agoIt's called buying low and selling high :D You can buy a few hundred dollars worth of BTC and see what happens if that's not a huge risk for you.
- evgen 9y agoWell, if anyone will know how to operate a long-running fraud it would be that guy. (Sorry, but someone had to say it...)
- koolba 9y agoAre you saying that simply because he's the head of a large financial institution or is there some specific accusation against Dimon? If it were a binary decision, I wouldn't put him in the bad guy camp. At least based on what I know about the guy.
- transverse 9y agoDon't you know how the financial system works? Banks make currency. With Bitcoin, they haven't figured out how to do the same. Their empire is in danger. His argument is predicated on the false assertion that currency has to be legally recognized; it doesn't. It only has to be accepted by those who trade with it. Not only is he bashing Bitcoin, but he is bashing all of cryptocurrency. What an idiot he is. The real fraud is perpetrated upon us by banks who lend dollars without holding hold an equal value of gold or silver. In past centuries, this was punishable as a felony by death.
- atomical 9y agoI would recommend you read one of Paul Krugman's book to understand how banking and the economy work.
- fredsir 9y agoCould you elaborate what specifically is wrong with what transverse is claiming?
- maxerickson 9y agoThe part about not backing deposits with silver and gold being fraud is pretty wrong. Even in Ye Olden Daze, banks would send deposits of things like gold and silver right back out the door as loans.
- sjbase 9y agoWell, the very first assertion "Banks make currency" is not accurate in the US (the context of the article). Currency is "made" by a combination of the US Treasury and policy set by the federal reserve. The fed is a bank of sorts, but in no sense is a bank like JPMC creating currency.
- transverse 9y agohttps://en.wikipedia.org/wiki/File:Fractional_reserve_lending_varyingrates_100base.jpg https://en.wikipedia.org/wiki/File:Fractional_reserve_lendin... shows how banks effectively expand currency. It's linked in https://en.wikipedia.org/wiki/Money_multiplier https://en.wikipedia.org/wiki/Money_multiplier
- deleted 9y ago[deleted]
- dgut 9y agoWhy the downvotes? transverse is right. The medium of exchange doesn't have to recognised by the Government, only accepted by both ends.
- ahi 9y agohttps://www.vanityfair.com/news/2017/09/jamie-dimon-billion-dollar-secret-jp-morgan https://www.vanityfair.com/news/2017/09/jamie-dimon-billion-...
- Finnucane 9y agoDimon does, after all, have experience with frauds that blow up.
- vinchuco 9y ago>Bitcoin fell to trade around its session lows after Dimon's comments. As of 2:05 p.m. in New York, bitcoin traded at $4,154.04, down 0.8 percent. What percentage of bitcoin users actually use it often for its practical value, as opposed to hoarding and speculating? How to estimate this?
- ISL 9y agoAn 0.8% fluctuation is entirely irrelevant to an instrument where the price has fluctuated by 20% in the last week. Regarding use, one of the interesting metrics is "Bitcoin-days destroyed", which gives insight into how often the coins change hands.
- deleted 9y ago[deleted]
- stephengillie 9y agoThe $5 transaction fee creates a floor for transactions. If other processors charge a 2% fee, then it doesn't make sense to use Bitcoin to transfer funds or use for purchases lower than $25. This already blocks a huge array of daily transactions, including a $20 ATM withdrawal and probably lunch. Additionally, there is a floor to the fractionality of Bitcoin, of 100 000 000 Satoshi. If Bitcoin ever reaches $1,000,000, then it could only be divided into $0.01 denominations, and not further. If it reaches $2,000,000, then 1 Satoshi would be worth 2 cents.
- alphydan 9y ago> The $5 transaction fee There is no such thing unless you are in a hurry.
- MSM 9y agoTrue, but for most reasonable purchases, time is of some sensitivity. Even using his previous examples, withdrawing $20 or buying lunch, you can't wait hours or days- you usually want them immediately.
- weirdstuff 9y ago"Currencies have legal support. It will blow up." Diamond reminds me of a bartender warning his patrons not to smoke pot. (Because alcohol is mostly legal, while pot is mostly illegal.) Also, fiat currencies need to maintain public confidence, part of which comes from a legal code. The remainder comes from management of the currency and its underlying domestic economy. I suspect a great deal of the value of Bitcoin may come from an eroding confidence of the U.S. dollar; especially after the events of '08 and the ongoing weak economy.
- cm2187 9y agoNo I think it means you can force someone to take the currency for payment. If I don't want to take bitcoins for payment, no one is going to force me.
- weirdstuff 9y agoIs it illegal for a seller to price something in the U.S. in bitcoin (or a some other form of exchange) and not dollars? If cigarettes became a more attractive medium of exchange, is it illegal to use that medium between two private, consenting parties?
- bmelton 9y agoIf you'd said toilet paper (or most other things) instead of cigarettes, I think you'd have a different conversation, but as cigarettes are a restricted and specially taxed thing, I suspect that using individual cigarettes as bartering implements is almost certainly taboo.
- cm2187 9y agoI believe that's the very definition of legal tender: https://en.wikipedia.org/wiki/Legal_tender https://en.wikipedia.org/wiki/Legal_tender It doesn't prevent you from accepting other means of exchange (though in some countries it does), but it does force you to accept it, even if you don't like it.
- KasianFranks 9y agoSimilar rhetoric has been spewed in the past by brick and morters related to technology. The masters of the Universe no longer exist. We're witnessing the final flailing of old institutions.
- mythrwy 9y agoThat's what you think. Capital and it's masters can change institutions like a hermit crab does shells.
- eponeponepon 9y agoI think this is definitely well into "well, he would say that, wouldn't he?" territory. But I also think it's interesting that Morgan are also, as the article mentions, making forays into blockchains - he is specifically talking about Bitcoin, and not cryptocurrencies at large. I expect this is exactly the sort of thing someone preparing to launch their own version - that they have control over - would say in an attempt to chip away at Bitcoin's respectability.
- subway 9y agoJP Morgan's work on blockchains seems pretty far divorced from crypto-currencies. Much of the work I've seen has been more ledger/private chain oriented.
- cjlars 9y agoBitcoin (and other cryptos) do have real uses for which there is real demand. My worry is that the current price has substantially outpaced the support that those uses offer. Let's go over some of the things that make up bitcoin's price: -You can make legal retail transactions -- a very small portion of transfers, but legitimate. This is a 'regular money' use. -Make large 'wire' transfers for less than it would cost through your bank. Totally legitimate and valuable in my opinion. This is a 'Regular money' use. -There are future expectations of bitcoin expanding the above two points. Supports the 'regular money' points above. -You can use bitcoin to (illegally) move money out of countries like China, which is now being cracked down on. This is a black market money / money laundering use. -Use as a speculation instrument. Valuable in a way, but only bullish on net because it is supported by the above services. This can be done with 'regular money', but speculative financial instruments are primarily assets and not regular money. There are many others, but those are the big ones I know about. The issue is that it appears the price is 80%+ speculation, 15% capital flight, and maybe only 5% of the demand for the asset is based on the traditional 'regular money' uses... What this means is that once the speculative support moves from net positive, to net negative (meaning, once Bitcoin gets a widespread reputation as being a dog) things start to go downhill hard. Of course my estimates above are very loose, and in the future the expansion of bitcoin into a far larger mainstream uses case could overpower all of them, but either my estimates above need to be off (and they may be) or we need to see large scale adoption of bitcoin for legitimate uses at some point (also a maybe).
- codewithcheese 9y agoThe most important uses in mind are that you can use Bitcoin to hedge against your own currency and as a way to diversify your portfolio in the same way you might hold stocks, bonds, cash and gold.
- nwah1 9y agoYou don't hedge a stable currency with a volatile currency.
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- carlchenet 9y agoFraud like the current banking system?
- deleted 9y ago[deleted]
- yyyyip 9y agoThankfully, the blockchain's 8 million trillion hashes per second and robust elliptic curve cryptography don't care what Jamie Dimon thinks.
- nwah1 9y agoAnd my mountain of Beanie Babies don't care what anyone thinks either. The value can only go up.
- mrb 9y agoUnlike Bitcoin, Beanie Babies solve zero technological problems.
- sogen 9y agoElliptic curve cryptography has been brute-forced: https://it.slashdot.org/story/02/11/06/2154224/weak-elliptic-curve-cryptography-brute-forced https://it.slashdot.org/story/02/11/06/2154224/weak-elliptic...
- wil421 9y agoWho cares at the end of the day it's still just numbers in a account. It just so happens adding $ before the numbers make it much easier for me to spend them.
- synicalx 9y agoBut unfortunately, most of the ~27 million businesses in North America don't care at all about Bitcoin.
- NicoJuicy 9y agoYeah, just when the price is lower. A lot of these so called experts have a personal gain on this :)
- kodri 9y agoSays Mr subprime. Add china fud about bitcoin ban and the message is : the sec is going to allow bitcoin trading and we need to buy cheap
- Icedcool 9y agoThere is a theory called Gresham's Law, that states that bad money drives out good, because people hoard the good money. This is one of the problems with bitcoin right now. As a currency its variability AND value is high, which leads to people not wanting to spend it. This ironically leads to a problem with the currency not being used. There are other problems, but for its wide spread acceptance and use to buy pizza, I sure don't want to spend something that is worth 1$ today, but might be worth 100$ tomorrow.
- vinchuco 9y ago>The Nobel prize-winner Robert Mundell believes that Gresham's Law could be more accurately rendered, taking care of the reverse, if it were expressed as, "Bad money drives out good if they exchange for the same price." [1] Not attacking your main point, but questioning the correct application of this principle. It seems like it originally was meant to talk about the same resource (a coin made of metal, metal becoming higher price than the coin). It doesn't seem like Bitcoins are intrinsically made of dollars. [1] https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
- 6nf 9y ago> This ironically leads to a problem with the currency not being used. This is not a problem for most of us.
- kamaal 9y agoThere is also one more scenario. The moment you have bulk of the bitcoin money in the hands of the 0.01% or even the 1%(Thanks to mining) people- The remainder 99.whatever% people can simply call it quits, refuse to trade in bitcoins and start their own currency. What will follow is obvious, the rich people and their whole enterprise can end up being worth 0. To prevent it they will be forced to do call in the national armies, use lethal violence to force their currencies on people and keep order. Then establish central banks to control the supply of currency. Or in other words convert bitcoin to fiat money. Mining has already created an incentive for people to in a way make money without any productive activity or trade, but through ledger keeping. It will be hard to convince people in the future to start skint poor in an economic system where there are 1% rich people who made all their money through non productive enterprise. And expect them to continue to suffer through it. Finally the inevitable will happen.
- deleted 9y ago[deleted]
- xiqi 9y agoThere are some security problems with Bitcoin. My PhD is concerning this subject. The PhD was funded by our government and I was banned to publish it. I am trying to get it released but it is very sensitive and may affect my family also.
- deleted 9y ago[deleted]
- inDigiNeous 9y agoSolid arguments from this guy. "It's stupid." Go suck a d*ck JPMorgan CEO. Thanks for being part of creating poverty all around the world. Of course these guys feel offended, they see potential in this and are afraid they can't control it.
- mrb 9y agoMarc Andreessen's words would apply here: «old white men crapping on new technology they don't understand.» :-) https://www.cnet.com/news/marc-andreessen-on-warren-buffett-old-white-guy-who-doesnt-get-tech/ https://www.cnet.com/news/marc-andreessen-on-warren-buffett-...
- kyleblarson 9y agoSo the guy that relies on exporting inflation so that his own government can print money at will and bail him out as needed is calling an alternative currency a fraud?
- uoaei 9y agoYes. He has a vested interest in saying what he is saying. Let's defer our judgment until less encumbered members of the economics community have something substantial to say.
- fortythirteen 9y agoThe ever persistent question I have about bitcoin is simple: Who's actually buying it with cash at a $4k+ valuation? Is anybody in their right mind doing that or is it a completely theoretical number? The thing about Bitcoin is that it's 100% transparent, except for where it's not.
- xutopia 9y agoMost people who buy bitcoin buy fractions of one. A lot purchase it through sites like coinbase.com (I am not affiliated with them).
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- dwaltrip 9y agohttps://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets Look at the 24 hour volume column to answer your question (yes, it is a robust market with many buyers and sellers). There are a few foreign exchanges with zero fees, so those volumes must be heavily discounted, but the majority of the listed volume is legitimate.
- Zigurd 9y agoThis probably a knowing lie. At the very least it is hypocritical. JPM trades gold, which is no more or less of a "fraud" than cryptocurrency. If you compare the total market in gold with that of bitcoin, you can't even say bitcoin, or cyptocurrencies as a class, are in a valuation bubble.
- dbcooper 9y agoJP Morgan has it's own (Etherium derived) blockchain system for transactions and smart contracts, Quorum. https://www.jpmorgan.com/global/Quorum https://www.jpmorgan.com/global/Quorum
- wyc 9y agoOther thread got duped...reposting here: It seems that his staff feel ambivalent about his comments: JPM Blockchain Lead: "¯\_(ツ)_/¯" https://twitter.com/AmberBaldet/status/907675559492288512 https://twitter.com/AmberBaldet/status/907675559492288512 Former JPM Director of Global Macro: "Jamie, you're a great boss and the GOAT bank CEO. You're not a trader or tech entrepreneur. Please, STFU about trading $BTC." https://twitter.com/agurevich23/status/907692985424371712 https://twitter.com/agurevich23/status/907692985424371712 Got these sources from Fortune's Term Sheet: http://fortune.com/tag/term-sheet/ http://fortune.com/tag/term-sheet/