By Spencer Kellogg | USA
What the hell just happened? Alleged insider trading at Coinbase, Roger Ver blasted for having practical visions of the future of cryptocurrency and Charlie Lee attacked as a parasite for cashing in (rightfully) his stack of Litecoin. What a mess the past few days have been leaving some in the Bitcoin and cryptocurrency community feeling shell-shocked from a new presence of egoism and narcissism in the once generally positive community. Furthermore, hard questions are arising about Bitcoin’s dominance as ‘king of crypto’ leaving many consumers upset in its wake. Money is a bastard and the past 48 hours have been a shining example of how greed and playground groupthink have diluted the overarching philosophical goals of the space and split a massive userbase into argumentative factions while leading even the most sophisticated lemmings straight off the cliff.
Bitcoin has a problem. For all of the talk about it being the world’s new reserve currency, it doesn’t move very well. It requires an expensive fee and the time delay for receiving the coin has been virtually eradicated by other competing digital currencies in recent years. The strongest thing Bitcoin has going for it at the moment is its first mover advantage in the space and its dominating presence on every major exchange in the world. Bitcoin Cash is a ‘fork’ of Bitcoin meaning that Bitcoin Cash is of the same origin as Bitcoin but possesses functional and technological differences. Just like a forked path presents two new roads so too does a forked currency and the route that users choose to take determines the viability of the product. Bitcoin Cash promotes faster payments, lower fees and secure development from a centralized leadership. It also has Roger Ver, aka ‘Bitcoin Jesus’ (or Judas depending on your opinion), one of the great controversial figures in all of cryptocurrency. Ver sent the currency and overall markets into a feeding frenzy as he appeared on CNBC yesterday to discuss Bitcoin Cash as the currency entered into the connected crypto exchanges GDAX and Coinbase.
With Bitcoin Cash coming online at Coinbase (the major exchange in the USA) markets and consumers around the world flooded in to purchase the asset before its listing. Allegations of insider trading were rife leading to Coinbase halting the trading of the currency as they investigated their employee’s purchases leading up to the event. In the greater community, opinions were split with some users pointing at the “disaster” and using this event to call for greater regulation and even lawsuits for what they perceived to be cheating while others grinned and accepted the practice for what it is; a fully free, unregulated market that does not play by your grandfather’s Wall Street rules. All Bitcoin wallet addresses that held BTC during the August fork were given the exact same amount in Bitcoin Cash and in the month’s leading up to the New Year, there had been confusion regarding whether or not Coinbase would add Bitcoin Cash as a trading option with many believing that Coinbase would only provide withdrawal of the currency from its website. The decision regarding whether or not Coinbase would allow active trading of the commodity is important because it has a major effect on the wider adoption of the currency. As it stands now, the continued shenanigans from Coinbase is leading to a loss of faith from its consumers who suspect manipulation and lies on the part of the leadership. Until a better option is available many US-based crypto customers will have no choice but to use the major on-ramp platform for enter/exit trading.
In the world of Litecoin, founder Charlie Lee laid out his reasons for selling off his portfolio of Litecoin in a Reddit post that can be read here: Charlie Lee Sells His Litecoin. He pointed to his presence as a social and cultural figure in the cryptocurrency market overall and his interest in divesting from the coin that he has such an immense influence upon. This led to fingerpointing insinuating that Charlie Lee was using Litecoin simply to get rich or even that this had been done to take advantage of the Bitcoin Cash listing on Coinbase. Lee also made clear that the currency has seen a remarkable run up from four dollars in the springtime and that many investors should be careful in this new high-risk and unstable territory. In the past year, I have witnessed Charlie Lee act as an agent of good over and over again and I was surprised by the level of hostility aimed at Lee in the following days. The aggression towards one of the true white knights of the space speaks to the level of mistrust and resentment that some consumers are feeling in this grey area of ‘bubble’ uncertainty.
The Wild West of crypto is an enthralling business but the ailments of big money and uninformed speculators are beginning to rear their ugly head. I always thought the major hurdle of crypto’s mainstream adoption would be a belligerent Congress but after what I’ve witnessed this week I am beginning to believe it will be the low IQ newcomers who demand greater centralization and regulation to protect their interests. I suppose the trending backlash can be seen as a bullish sign because it signals that a mass userbase has collected with desires and opinions and a real stake in the game. The bickering, however, is difficult to listen to and reminds me most of the Sunday’s I spent as a child watching grown men smash into each other on the football field. We are still years away from true adoption of these services and much can be changed in the proceeding time. Do your own research, form your own opinions, strap in and get ready for the moon, just be careful which rocket you choose.
Image credits go to @Crypto_God