Obi Nwosu is the CEO and co-founder of Coinfloor, the UK's longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.
Words are constantly changing their meaning, but “cult” has always been a four-letter one. In today’s divided, at times venomous discourse, “cult” has become just another snarl world, thrown at opponents as a way to invalidate their politics, opinions and interests.
But sometimes it retains its original meaning: a belief system based around a visionary founder who attracts adherents to their charismatic authority. Bitcoin (according to its detractors) is such a cult. Ironically, this says far more about the biases and blind belief of Bitcoin’s implacable opponents than it does about Bitcoin itself.
So, who is this charismatic individual, this Prophet of Bitcoin? For some of those whose knowledge goes no further than scanning the headlines in their Facebook newsfeed, it’s St Elon of Musk. He may not have the power to move mountains, but he can certainly make Bitcoin’s price soar or plunge with his pronouncements, as we saw last week with his tweet announcing that Tesla will no longer accept payment in Bitcoin.
Bitcoin’s critics were quick to seize on this apparent act of treachery, conveniently ignoring the fact that Tesla will retain the billion-and-a-half dollars-worth of Bitcoin in its corporate treasury. No, the Great Helmsman of Bitcoin has turned his back on the revolution, to howls of glee from those who suspected it was a cult all along.
There’s more than a few problems with this narrative, not limited to what Elon got wrong about Bitcoin being powered by “dirty energy”. The arguments that Bitcoin is a planet-killer have been refuted a thousand times, including in this column, but to recap: Bitcoin mining incentives naturally drive people to renewable or currently wasted energy sources, so its usage will ultimately reduce energy waste. Still, it’s a powerful line of attack, because it has become near-impossible to question any environmental argument - even erroneous ones - without being cast out as an unbeliever.
What is much more damaging is the impression this gives of Elon Musk - or indeed anyone else - as a visionary Bitcoin leader, rather than just another follower (albeit somewhat richer). I must stress that the damage to Bitcoin itself is negligible, but the implications of making a prophet out of El Elon can do serious harm to those who approach Bitcoin without understanding its ethos.
Just look at the young woman who lost £9,000 of her hard-earned savings after being conned by a scam email which used Elon Musk’s name to lure in unsuspecting victims. Let me stress: this is in no way Mr. Musk’s fault. But it does show what happens when the media makes a False God out of a trusted, charismatic celebrity and turns them into the figurehead for a movement.
This is, in microcosm, what we saw in macro when Bitcoin’s price fell by almost 17% immediately after Musk’s tweet (and the consequent rise in Doge after his musings on this flavour-of-the-month altcoin). It shows that people are still significantly influenced in the short term by the words of a few people they idolize.
There is no question that Elon Musk is a charismatic and, in many ways, a brilliant man. But he is not a prophet and still less a leader of a movement whose ethos is decentralization and individual empowerment. And even if he were a leader, one would hope for more reasoned and informed arguments than his claim that Doge is somehow more environmentally friendly than Bitcoin because it is orders of magnitude smaller, and its mining is merged with Litecoin. I don’t know if Elon buys into that argument - he’s a shoot-first, ask-questions-later kinda guy, so I’m guessing not.
But then false gods and false dogs were never the problem. It’s the very idea that Bitcoin has - or can even tolerate - figureheads that’s the problem. Bitcoin is less a faith to be followed and more a discipline to be mastered. So, while it’s natural to take shortcuts, remember that knowledge is power; ultimately the only way to ensure your financial future is to take the time to learn the fundamentals so you can tell unfounded celebrity opinions from first principles-derived facts.
In Bitcoin, there’s only one leader who matters, one expert you can trust: yourself.