At times, you just shake your head and quietly ask yourself, ‘What’s the use?’ You try to warn cryptocurrency advocates and they think they know what they are doing. There are more people speaking out against these pseudo currencies now and the bitcoin boosters have been warned by the Bank of Canada.
And the Bank of Canada is not in competition with bitcoin or any of the other cryptocurrencies. They are interested in them only in the sense that they need to understand the phenomenon. While it might be the best known of them is called bitcoin, it is not money. It is, at best, a hypothetical investment. Yet, what the bank found out in their studies was that most Canadian bitcoin owners were not financially literate. And they did not seem to understand the risk involved in taking an ownership position in bitcoin.
In a series of studies between 2018 and 2020, it was determined that about five per cent of Canadians were actively involved with bitcoin. The Bank of Canada researchers tell us that the bitcoin owners were, mainly male, younger and educated, with high household incomes. They understood the technology involved and the block chain, yet saw the ownership as an investment.
It was interesting that the bank decided to release their studies at this time. It is when MP Pierre Poilievre is currently campaigning to win the leadership of Canada’s conservative party and supporting bitcoin ownership. Like many of his claims, Mr. Poilievre tends to wander from the truth. He reminds us more of former U.S. president Donald Trump than any conservative we have ever known. The inflation that is besetting all currencies today is hardly unique to Canada nor to be blamed on our prime minister.
The researchers did not say it but I will: The ownership of bitcoin is, at best, a poorly managed tontine (that is an investment club that gives all the money in the pot to the last person alive) or just a form of gambling where nobody wins.
Some people also accuse it of being a Ponzi scheme without a Mr. Ponzi. What it really is would best be described as a foolish fad that will pass on to more interesting challenges in the years ahead.
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