BITCOIN IS A FRAUD

It is an asset without a liability.

5 min readMar 31, 2022

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In the summer of 2016, Dr Ruja Ignatova boldly proclaimed that OneCoin will be “for everyone to make payments everywhere”.¹ One year later, Peter Smith (Blockchain.com’s CEO) and Jeremy Liew (Snapchat’s investor) declared that bitcoin will hit $500,000 in 2030.²

**The bodacious Bulgarian CryptoQueen, Dr. Ruja Ignatova**

Ignatova, Smith and Liew are smart enough to know that the first principle of money is… it’s only valuable if other people think it’s valuable.

Money is only valuable if other people think it’s valuable.

Pebbles, shells, or even bottle caps can be used as money, if and only when everyone trusts it. Rightfully, these bartering objects have always failed because no one could trust them, as they can easily be obtained, manipulated, or forged.

A print from 1845 shows cowry shells being used as money by an Arab trader. © Benjamin Waterhouse Hawkins / SSPL / The Image Works

We all know that OneCoin was a fraud. But is Bitcoin a fraud too, according to my friend, Prudence?

Here’s my take, starting with my disagreement.

1. Blockchain

Technology-wise, OneCoin and Bitcoin are like chalk and cheese.

Two years after OneCoin was launched with over $4 billion invested, Bjorn Bjercke, a blockchain techie, was offered £250,000, a fancy apartment, and a car to build a blockchain for OneCoin. Which means that there was literally no blockchain in this so-called cryptocurrency!

Shockingly, what was recording all the transactions was just a freaking SQL server!! And if someone were to have access to the database, she could simply change the numbers arbitrarily. Which is exactly what Dr. Ruja did!!!

Au contraire, Bitcoin is a peer-to-peer decentralised ledger secured with cryptography. Every node has a copy of the full ledger, so making changes to the transaction would be almost impossible.³ Bluntly put, I disagree that Bitcoin is just another version of OneCoin.

On other matters, I’m afraid OneCoin and Bitcoin are like gin and tonic.

2. Restricted Payment

OneCoin pays out its investors with cash to keep the Ponzi scheme going. You can’t cash out any time until OneCoin says so (i.e., there is a lock-in period after you deposit your money).

On the other hand, bitcoin can be used to make payment for things directly from one wallet to another. It’s an open-access tool that is both anonymous and non-discriminatory, which prevents obstruction from governments and banks.⁴ This is a good thing.

HOWEVER (in uppercase, underline and bold), very very very few people use bitcoin for payment. The majority simply stock up bitcoins and hope for them to go up in value. Yes, some may use it for a single purchase and then leave their unspent UTXOs for the rest of the year. But at the end of the day, an infinitesimal number of people transact with bitcoin.

A Bitcoin ATM in Hong Kong. Photo by EyePress/AFP.

Another issue is the laboriously slow transaction time when paying with bitcoin (fyi, MasterCard can process 38,000 transactions per second). You can wait for days on end just to buy bedsheets.⁵ And don’t get me started on the high, volatile fees that come with it.

In addition, many use a custodial wallet to transact in bitcoin, such as using Coinbase, Binance, etc.⁶ Doing so defeats the principle of “an open-access tool that is both anonymous and non-discriminatory”. In addition, the millions of folks on Metamask can’t even use bitcoin because Metamask does not support the Bitcoin network. So, we might as well go back to using local banks.

Making Bitcoin transactions isn’t an easy process for non-techies.⁷ This translates to an exclusive payment mode for a privileged few. And that violates the first principle of money (as per my 2nd paragraph). Henceforth, Bitcoin isn’t a practical utility.

…the laboriously slow transaction time when paying with bitcoin (fyi, MasterCard can process 38,000 transactions per second). You can wait for days on end just to buy bedsheets!

3. Religious Beliefs

Humans often believe they are part of something big that is going to change the world. Bitcoin maximalists suffer the same confirmation bias as do followers from a church or a networking group like BNI. Once they’ve signed up, it’s very hard for them to admit they are wrong.⁸

In fact, billions of monies raised in ICOs get either stolen, hacked or inside the pockets of the founders. If this is a decentralised cryptocurrency, why is the wealth disparity so bloody skewed?!⁹

With thousands of Bitcoin advocates giving thanks and sending tidings to Satoshi Nakamoto, I can’t be faulted to think that Bitcoin is the currency of salvation.¹⁰

All hail Yeshua Bitcoin. Illustration by Mustafa Akman via Getty Image

4. Groupthink

It’s always the same individuals from the same small group that pushes the benefits of Bitcoin — Jack Dorsey, Sam Bankman-Fried, Cory Klippsten¹¹, Max Keiser, and even Vitalik Buterin to some extent.¹²

Yes, the Bitcoin technology is democratised, but the influence isn’t.

This goes further as listed companies like Tesla and MicroStrategy have been propagating Bitcoin to their followers. But these companies are trading by custodial services and NOT directly into bitcoin. Which means they are operating parasitically, profiting off investments from bitcoin and quickly cashing out when the project ends.

If it were not for Doubting Thomas, this dinner eptomises groupthink.

Until grassroots participation in Bitcoin matures, cryptocurrency will lie in the hands of a few.

So do I agree with Prudence that “Bitcoin is just another version of OneCoin”?

Going solely by maths, the 75% analysis says she’s right.

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