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Torsten Hoffmann released his documentary entitled "Bitcoin: The End of Money as We Know It" in 2015, which seems to be many galaxies ago given the fast and furious acceleration of crypto developments these days. Nonetheless, the lessons and insights are beneficial for those completely new to Bitcoin (and even for us vested investors).
One thing to take note before you decide whether to watch it: Although it's an hour-long documentary, Bitcoin only made its appearance around the 40-minute mark. The first 40 minutes were devoted to describing the history of money, how the measures of currency varied over the centuries, the failings of the banking system, among others. Hence, if you are looking for a thorough discussion of the pros and cons of Bitcoin, this documentary probably isn't for you.
Having said that, I thought it was a good way to understand Bitcoin through this systematic, albeit long-winded approach. Detractors of Bitcoin may point to how this digital asset may be abused for immoral purposes like terrorism funding and money laundering. In fact, the documentary dwelled a bit on a study that found out how the majority of drug abusers made use of Bitcoin to finance their illicit drug-taking activity. However, Torsten Hoffmann reminded us that banks cannot be said to beyond reproach either.
Flaws of the Banking System
Indeed, with screaming headlines that announced how big influential banks were involved in fraud, insider trading and money laundering, the documentary made a case that it's detrimental to have these traditional institutions have so much control over money. As if this wasn't clear enough, it presented a recap of how the 2018 global recession was caused by the subprime housing crisis in the United States. Of how banks' overzealous desire to expand their profit margins led them to create "magic money" in an unsustainable manner, thus leading to defaulting by people who could not pay up their loans.
Do we want to trust banks to be custodians of our hard-earned money? This is food for thought for people who have unbridled faith in their certificates of deposits and other traditional banking products.
Flaws of Credit Card Payments
Given how ubiquitous credit cards are in our lives these days, it's easy to forget the risks associated with using them. The documentary mentioned how a significant proportion of credit card payments in countries like the United Kingdom was on fraudulent purchases. Indeed, in my home country, Singapore, credit card scams are part and parcel of our daily lives nowadays, so much so that I have to tick a few boxes to indicate that I have been warned of the popular ways my countrymen have fallen prey to scams before I can proceed with my online transaction.
Given that every Bitcoin transaction is made public on the LEDGER shared by all the computers connected to the blockchain network, the transparency of Bitcoin should be seen as a welcomed development.
Mismatch of Bitcoin Usage with Individual Needs
While Bitcoin is a boon for poor people in developing societies, particularly those living in rural areas, a first world problem that has emerged is how people in affluent countries use Bitcoin as a speculative asset as they sit and hang back to wait for its price to surge to skyrocketing levels before selling them for profits. There are many routes to building wealth, so if savvy investors could leverage market conditions to make a killing for themselves, all the power to them, I say. But I just feel that if the documentary is making a point on the flaws of the traditional banks, I would have wanted it to explore this issue of Bitcoin being a speculative asset a tad further.
To what extent should newbie users in developed nations invest in Bitcoin? Banks are not flawless but it is psychologically safer for most people to stick to the evil they know rather than BRAVE the storm to face the repercussions of unknown entities. How much of his portfolio should one devote to Bitcoin? These are just some questions I wish the documentary could have addressed better.
Intrigued by this documentary? You can actually watch it here on YouTube.
Reposted from my personal blog.
