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Bitcoins for the Average Joe: Utterly Incoherent

Written by Gary North on December 4, 2013

I am in marketing. I have made a lot of money in marketing.

Here is a rule in marketing: if you cannot explain your offer in language understandable by the buyer, you will not make a sale.

Here is a video on how the Bitcoins system works.

Watch it until you cannot follow it. This will be about 2 minutes — 10% of the video. It may be less.

How much of your wealth would you entrust to Bitcoins, based on this video, which explains how the system works?

You may not understand the Federal Reserve, either. But there is this difference: you have used the existing system all of your life. It does not ask you to re-think everything. It does not ask you to change.

Where will you spend Bitcoins? How many stores accept Bitcoins? How many public utilities accept Bitcoins?

People need to trust their money. Does this video convey trust?

Will your wife say, “I understand! Let’s pull our money out of the bank to buy Bitcoins.”

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13 thoughts on “Bitcoins for the Average Joe: Utterly Incoherent

  1. 10 Ways Bitcoin is Better Than the Federal Reserve http://www.activistpost.com/2013/12/10-ways-bitco

  2. Texas Chris says:

    It's fun to play with BtC. Not invest. Play.

  3. This is how I gamble when in Vegas, or even with scratch tickets. It's not my investment strategy. It's play.

  4. What’s the problem? I can understand that video, but then again I don’t suffer from future shock.

  5. Tobias Rhinehardt says:

    Gary, its clear that you have been stung by the completely correct criticism of your anti Bitcoin articles, and really, its a shame that you don’t know anyone who could have walked you through Bitcoin before exposing yourself as a computer illiterate. Your previous work is valuable and we need your insight, when its properly informed of course.

    Its very disingenuous of you to choose a technical video with a title, “How Bitcoin works under the hood” while trying to pass it off as an explainer for the common man. This sort of sophomoric nonsense is beneath you Gary. If you can use Google, which we presume you can, you should have been able to find this:


    Which has the best explanatory video for the layman. It makes the Bitcoin proposition very clear and simple to understand for the average user, who has no problem sending text messages, posting on Blogs or making telephone calls, or using any of the myriad modern devices that all have computers in them. Which means just about anything that has electricity in it.

    Even if Bitcoin was difficult to use and understand, which it is not, a true entrepreneur who boasts about having made “lots of money” should immediately see the simplification of Bitcoin (if it needed it) as a business opportunity. Unfortunately, people who have no idea how a computer works will not be able to do this work. On the other hand, a blind spot like this could provide useful insights into how to make Bitcoin consumer friendly, if it were not already so. This is why companies use focus groups to hone and simplify their software. Unless you are using a personal secretary to post these screeds on Tea Party Economist, there is no reason why you should not be able to use Bitcoin immediately. You should download the Blockchain.info client and simply use it, so that at least you know what you are talking about from first hand experience. I am sure a famous person like you can find someone to send you a dollar in Bitcoin just to try it. Or maybe they can send you a penny. It doesn’t matter how much they send you; the fees are negligible.

    The fact of the matter is, Gary, that you have got this spectacularly wrong. What is worse, is that you accept Bitcoin for your books that are on sale at Mises.org.

    You might be able to claim that you do not receive Bitcoin yourself when your books are purchased with it from that site, and so you might be able to decry “I am not a hypocrite, because it doesn’t matter if I accept Bitcoin for my books” but the fact that Mises accepts Bitcoin for your books and then remits you cash without you of them making a loss proves that Bitcoin is useful for this purpose and the purpose of any online purchase, is not a bubble or a “Ponzi Scheme”, and puts you in a very difficult position to defend.

    Will you now remove your books from Mise.org if they do not refuse to stop taking Bitcoin for your books, or will you now concede that Bitcoin is not a scam, is sound, easily understandable and that you use it yourself via Mises and have got this entirely wrong?

  6. I understand it so far (5-6:00-ish), but that "how do you check the balance?" kinda stopped me. I thought of a couple of ways. Either make everybody's balance so that everyone can check, or do whatever the banks do, and then I wondered, so then how are they different from dollars in practice? Is it merely that they're transacted under the Taxman's radar?

    And I agree, it'd be fun to experiment if I had any spare money.

    It will be very very interesting to see the outcome with a totally free-market currency. 🙂

    And the thing that really intrigues me is "mining." (0:04 "to own, send, or mine bitcoins.") I wonder what that means? .

  7. buying selling transacting and storing bitcoins will become easier, and it will be easiest when the price is the highest and the herd wants in at any cost, thats when you get a big crash…it may begin at $100 000/bitcoin

  8. FreeMarketAnarchist says:

    Dr. North isn’t entire wrong in his criticism of bitcoins. From its inception until the recent mania began, the majority of bitcoin users were trying to buy and sell with them, and build an economic network of merchants and services who use and accept bitcoins for payment. That is no longer the case. The majority of bitcoin users today are looking to “invest” in something that was never meant to be an investment. Dr. North is exactly right that this mania will no doubt lead to a spectacular crash in the value of bitcoins when all these “investors” see losses on their “investment”. Will bitcoin survive this? Who knows.

  9. TrueAustrianThinker says:

    Dr North accepts Bitcoin for his books online. Why does he do that if Bitcoins are no good? Just because the majority of Bitcoin owners are speculators, (if that is even true, which of course, it isn't) that has no bearing on the utility or soundness of the idea of Bitcoin or the actual running software.

    All the arguments against Bitcoin made by the curmudgeon wing of the Austrian School and their younger fans fall flat, because they are not rational or coherent. Once they have actually used Bitcoin and understood it, perhaps they can come up with some novel objections.

  10. FYI, this same argument was used against the internet in the early 90's. It was complex and for geeks only. Look what happened. Bitcoin is a protocol that can and is being built upon just like TCP/IP and will eventually be much more robust and user friendly.

  11. I'm still wondering what backs it up other than the user's word. What happens when its value crashes like the stock market has? Do all your bitcoins lose purchasing power?

    Speaking of credit, are there bitcoin loan sharks?