# Last edited on 2014-11-13 01:39:51 by stolfilocal
# NOT POSTED YET - for the thread "Bitcoin will plummet to $10 by first half of 2014" 
# https://bitcointalk.org/index.php?topic=378368.msg9526130

[quote author=mmortal03 link=topic=378368.msg9526922#msg9526922 date=1415844731]
[quote author=bitbouillion link=topic=378368.msg9526085#msg9526085 date=1415837094]
Debunked Boston University Professor Attacks Bitcoin Again
https://www.cryptocoinsnews.com/debunked-professor-attacks-bitcoin/
[/quote]
From the article (with the article author's commentary in parentheses):
[quote]He revealed his Top 10 Reasons to Avoid Using Bitcoin since his agenda is pretty clear-cut at this point. Here is a synopsis of his ten-point diatribe.[/quote]
[/quote]

You left out the best part:
[quote]
In this life, you can always spin your view of the world into whatever reality you hope to create. If you spend your days with negative people, who rail against the same things you do, you will create a mutual damnation society if that is indeed your agenda.[/quote]

... which applies to the author, and to his negative views of traditional currencies and banks, more than to the prof.  Let's see:

[quote]1. Bitcoin is not legal tender, at least in the U.S.: “It is a voluntary currency, and its use as a transactional currency is limited to those willing to accept it.” (This only included about 100k merchants worldwide, including Dish Network, Tesla Motors and Dell Computers. Minor endorsements.)[/quote]
What the prof means is: your landlord (or any other business) cannot refuse payment in dollars, even if he would rather have bitcoins.  On the other hand, if he refuses to accept bitcoins, you cannot force him to; you will have to change bitcoins into dollars.  Which seems a good reason to using dollars instead of bitcoins.

Also, few of those "100k" businesses really accept bitcoin.  They only accept dollars, and subscribe to Bitpay because it costs them very little and they don't have to touch bitcoins.

[quote]2.  Sovereign attack risk: “Governments exercise a monopoly power on currency creation with the understanding that doing so will provide its citizens with a greater level of economic stability.” (Do I need to say anything here? He should have avoided this point like The Plague.)[/quote]
The author must be from Zimbabwe.  Compare a chart of the value of dollars or euros with that of bitcoin over the last year (but make sure that the zero axis is included in the scale).  Even the Argentinian peso has been more stable than bitcoin.  Governments at least try to keep the value of their currencies stable, but there is no entity that will try to do the same for bitcoin.  The price of bitcoin is inherently volatile, because it is pegged to nothing; it is defined by the mood of an army of amateur Chinese day traders. 

[quote]3. Significant consumer protection risk: “There are no laws in place protecting consumers against theft, fraud or human error…..Bitcoin…..eliminates banks as a financial middleman and in doing so also eliminate the legal protections offered by such structures.” (Many would make that trade seven days a week, not having to deal with banks, and their fees, interest rates, and privacy intrusions, plus the direct investment into a corrupt financial pyramid.)[/quote]
"Many" is not that many, judging by how many people in the world have adopted bitcoin.

[quote]4. Extreme financial risk is due to price volatility. (Your “extreme” risk is based upon your investment amount.)[/quote]
Here the author got it right:  the less you invest in bitcoin, the smaller the risk. 

[quote]5. “This triple-digit annual price risk makes Bitcoin more suitable for Wall Street type trading companies possessing sophisticated management systems, controls and tolls than for merchants.” (Merchants aren’t exposed to downside Bitcoin risk as services like BitPay will swap the funds into US Dollars at the end of each business day, if desired. Or, the merchant can leave a percentage in to appreciate, like Overstock.com does. It’s upside dwarfs dollars or any fiat currency, which is designed to lose value every day it exists.)[/quote]
What the prof means is that merchants cannot quote prices or accept payment in bitcoins, since its value can change 5% or 10% between the merchant receiving the payments from customers and him paying his suppliers.  That  is more than the margin of most retail stores.  Merchants must quote the price in dollars and have Bitpay & co figure out the bitcoin amount and do the conversion.  

As for the last point, bitcoin currently has an inflation rate of 5-10% per year (as coins are "printed" by miners), significantly higher than that of dollar and euro.  

[quote]6. Bitcoin is a hyper asset bubble in the process of deflating: “Bitcoin – Big bubble or big innovation,” reads one of the slides. (Deflation or Stagflation is one of the Bitcoins virtues, as it is anti-inflationary, unlike fiat currency. Deflation is bad for fiat currency but good for sound money concepts like Bitcoin.)[/quote]
The author confuses the terms "deflation of a bubble" (the "emptying of a balloon", what happened to bitcoin price since December) with "deflationary currency", which has nothing to do with it.   

But, since it s mentioned: the reasons why a deflationary currency is bad apply to bitcoin too.

[quote]7. Growing concentration and bankruptcy risk to financial middleman: “Risk-mitigation services of firms such as Coinbase and Bitpay…..don’t eliminate system-wide Bitcoin price risk but simply warehouse the risk on their books.” (Massive risks are in every currency system, be it the Bernie Madoff $20 Billion Ponzi Scheme or the U.S. government confiscating civil servant’s retirement accounts to bail-out a bankrupt Detroit municipal system.)[/quote]
Smoking while filing the tank of your car is OK because what could happen is nothing compared to Chernobyl. 

[quote]8. Bitcoin Exchange Bankruptcy Risk: (A somewhat legitimate point, yet a U.S. bank collapses every four days. Even though your money is FDIC-ensured, the amount of time it takes to recoup your losses of this much more frequent event than the lone Bitcoin exchange closure can vary.)[/quote]
I wonder whether that "bank [b]fails[/b] every four days" comes from.  Thousands of banks have closed in recent years, especially small credit unions; but usually by returning client deposits and shutting down orderly (like two Chinese bitcoin exchanges did); or are bought by larger banks.

[quote]9. Bitcoin use can trigger significant tax risk: “Bitcoin has been designated by the IRS…..as property…..unlike ‘legal tender,’ consumers that use Bitcoin can be subject to additional taxes.” (As if any other “property” based on the U.S. Tax Code should be avoided? And the tax only applies if the Bitcoin is redeemed for dollars, as of this moment.)[/quote]
What the prof means is that if a company accepts bitcoin payments, it will have to keep track of when it acquired each amount of bitcoins, and pay taxes if its price goes up, depending on how long it held each amount; just like it must do for its other properties.  And the taxes are due not only when the bitcoins are sold, but also if they are used for payments.  (You cannot avoid taxes by bartering instead of using money).  Dollars are exempt from such taxes, and their accounting is much simpler.

[quote]10. Transactional Fraud Risk – Double Spending (Which doesn’t make any sense, since a Bitcoin has never been duplicated or double-spent, the whole idea behind Blockchain technology to begin with.)[/quote]
If the store delivers the merchandise after 0 or 1 confirmation, a double-spending attempt has a significant chance of succeding (meaning that the payment may be canceled by another transaction that sends the same coins to another address).   To reduce that risk, the store has to wait for several confirmations, each taking 10 minutes on average (sometimes much longer).  Even then, an attacker with more hash power than the rest of the network can "rewind" the blockchain and cancel a payment after any number of confirmations.  Check "51% attack".