Bitcoin: JP Morgan boss calls it “a fraud that will blow up”

Published: September 13, 2017 at 3:28pm

The boss of America’s biggest bank, JP Morgan, has been quoted in The Guardian saying that bitcoin is “a fraud that will blow up”. The cryptocurrency is only fit for use by drug-dealers, other criminals and people living in places like Venezuela and North Korea, Jamie Dimon said. He was speaking at a conference in New York.

Dimon said he would fire “in a second” anyone at JP Morgan found to be trading in bitcoin. “For two reasons: it’s against our rules, and they’re stupid. And both are dangerous….The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

“It is worse than tulip bulbs,” Dimon told the conference, referring to the Dutch economic disaster of 1637, known as Tulip Mania, in which speculation on something unreal, caused by popular delusion – the price of the newly discovered tulip bulbs – led to financial catastrophe.

Key people in Malta are raving about bitcoin as the next big thing. They would do well to read what Jamie Dimon has to say about it. Are they so arrogant as to think they know more than the man who runs America’s biggest bank? I’m more interested in his views, and consider them more reliable as expert opinion, than in the views of Joseph Muscat and those behind him who are pushing bitcoin for their own nefarious ends.

Those who need to launder the proceeds of crime and corruption need bitcoin. But civilised society does not.




151 Comments Comment

  1. Galeforce says:

    The Castille Gang are pretty keen about promoting this Bitcoin.One wonders why.

  2. Sea Bastion says:

    “But civilised society does not.”

    Maybe civilised society in the future does. Bitcoins aren’t inherently illegal

    I wish I had a Bitcoin wallet and invested in them long ago. One Bitcoin is worth almost 4000 USD now! Imagine mining one Bitcoin when it’s equivalent to $200 and having the value spike over $2000 later on. Other than Bitcoin there are several other cryptocurrencies like Litecoin, Ethereum and also Dogecoin which started as a joke in a meme kind of way but is now an actual cryptocurrency.

    This video kinda explains Bitcoin:
    https://www.youtube.com/watch?v=yCy_7Z1f-Bs

    • People who bought those tulip bulbs back in 1636/37 thought they were making a killing too. And I actually remember the dotcom boom (and major bust).

      With both those two things, as with bitcoin, people didn’t stop to ask ‘But what are we actually buying, and how can money be made from this?’

      • NoThanks says:

        Anything is vulnerable to that however, including money itself. The value of something is only a function of how scarce it is, and how much people decide it is valuable.

        Expert opinions in this matter should also be taken with a pinch of salt. They’re (in)famously terrible at predicting the future. I remember following the financial crisis in 2007 when you had several big shots saying “the worst is behind us” before the collapse of Lehmann.

  3. A Curmi says:

    The boss of JP Morgan is not the only one of leading figures in banking/finance who have labelled bitcoins and other forms of crypto-currencies as most dangerous scams that can easily be used for for money laundering.

    An article in The Financial Times last week-end (9/10 Sept.) quoted the US Securities and Exchange Commission having warned that it is relatively easy for anyone to use blockchain technology to create a virtual currency that looks impressive even though it might be a scam.

    When asked if he would put any of his money in bitcoins the billionaire investment manager Warren Buffett replied ‘No. absolutely not’.

    And we in Malta are playing with the idea of introducing virtual currencies; something that it is reported even the Malta Financial Services Authority is against. So there must be a reason for government’s keenness to put Malta on the blockchain map.

  4. Kyle Pullicino says:

    Hi! I’ll like to clarify some things written in the article because they are factually incorrect. Bitcoin, Ether and other blockchain-based cryptocurrencies are not created “out of thin air” but through a tough computational process called “mining”. This ensures that the cryptocurrency is cryptographically secure and in fact, Bitcoin (and other currencies) have been mathematically designed to withstand censorship and oppressive control.

    What I mean here, is that Bitcoin and blockchains are the tools for making our democracies truly impenetrable and free from authoritarian control. For example, no government official or bank in the world can freeze a journalist’s Bitcoin assets ever (by filing numerous court cases) because it would take more computational energy and time than exists in the universe. With smart contract blockchains, we can make it even mathematically impossible for governments to cheat at elections or to misappropriate tax funds. This technology is truly the tool needed by people who are against the establishment (since that’s the buzzword nowadays). I have written two articles about how we can build fair & just societies here which I invite you to read for more information.

    https://medium.com/@kyle.pullicino/fairer-and-just-societies-using-blockchain-60462044ded4
    https://medium.com/@kyle.pullicino/set-sail-for-the-blockchain-republic-6434a9184400

    Finally, people like Jamie Dimon and others are talking the way they are because they know that they will be losing power and control over us mere mortals. Feel free to contact me for more information!

    • J. Vella says:

      But where is the fiduciary characteristic of money in Bitcoin? All country currencies have a promise to pay supported by the respective people of that country. So the euro, for example, is guaranteed by the governments and people composing all the countries which have adopted it as their currency. In the case of Bitcoin there in no such guarantee.

      • They’re collecting conch shells on the beach and using them to pay for groceries. But they call it ‘mining bitcoin’ and unlike taking a walk on the beach it’s expensive and complicated, so they think that makes it different to the conch shells.

      • NoThanks says:

        You’re not too wrong, but rather than conch shells which are everywhere, think gold which is rare.

        At the end of the day, gold is only valuable because as a society we decide it is. If the markets decide that bitcoin is valuable, and it is scarce, then you’ve got the most important elements covered.

        Government promises only help in ensuring scarcity of a currency and to ensure there is trust in them.

      • etc90 says:

        Gold is valuable because there’s a finite amount of it

      • Ganni Muscat says:

        That is not a problem with virtual currencies. It’s a problem with currencies in general, that is only solved by having a government adopt it.

        That is, it is not a problem of Bitcoin intrinsically, but only circumstantially since a government could easily adopt it. So yes, Bitcoin currently is like the tulip craze, but it could easily be made into a safe currency.

      • J. Vella says:

        Governments already have their currency. Why should they adopt a new currency called Bitcoin in the hope that other governments would join in? Europe already has the Euro which is a hard currency.

    • La Redoute says:

      Why do Bitcoin’s defenders equate cryptocurrency with blockchain techology? It’s possible to have the latter without the former.

      • Mike says:

        It is certainly possible to use blockchain technology but it won’t be as cryptographically secure as the Bitcoin blockchain.

        The reason is that as Bitcoin is so widely distributed (i.e. the network of people using and mining Bitcoin) it is virtually impossible to alter the records on the Bitcoin blockchain whereas a blockchain with no significant computing power behind it can be attacked (and its records altered).

        So to summarise, yes it is possible, but you would want the security of a secure blockchain otherwise you would have to rely on a trusted centralised power to keep the records, which is essentially what the Bitcoin blockchain makes redundant.

    • etc90 says:

      Being anti Establishment may be a new word for you, but that term has been in use for donkeys years

    • Stefan Balzan-Attard says:

      It’s worthless. Created by a PC = out of thin air. If everyone used it there would be no tax revenues and nobody would be able to sue someone for running them over. But not everyone is going to use this virtual game – which is basically Farmville on steroids.

  5. Nik X Conti says:

    Many nations are embracing it. It’s totally expected from JP Morgan’s boss to defend his piece of the pie (which is everybody’s pie may I add).

    Bitcoin is not just a currency. It’s a technology: blockchain. It goes way beyond anything we’ve seen so far so for many social reasons I will not go into here.

    For the first time power goes back to the people where it belongs. This is all fear mongering to kill the competition, not much of a news story. To compare Bitcoin/BlockChain to Tulip fiasco is ridiculous on all levels.

    • Oh, god – the financial equivalent of politics: power back to the people. We’ll bring down the banking system and reinvent the wheel.

      You don’t even seem to understand that banking systems are not just about currency: they serve very real purposes in the economy and society.

      A currency without a banking system is just a sophisticated version of conch shells.

      • Mark Bartolo says:

        Please stop using ‘bring down the banking system’. This is not the case. This is only banking reinvented. Why do you keep saying that blockchain embracers are anarchist lunatics?

      • Because we have been here before, and because the anarchic drive towards cryptocurrencies is the same one which has motivated the populist movements across the world, which are essentially anarchic movements.

  6. Jonathan Galea says:

    It’s a bit ironic that you’re quoting the CEO of one of the banks which fraudulently set up the whole mortgage subprime fiasco back in 2008, ending in millions of people losing their jobs and impacting the global economy. Looks like he’s now panicking about something which was labeled a joke a few years ago. Good to see him starting to take this seriously.

    I also suggest that you look up some facts about Bitcoin before quoting someone whose sole interest is to protect his fat slice of pie. Quoting a few here below:

    Fact #1 – All the transactions in Bitcoin are published on a ledger which you can access on sites such as blockchain.info. You simply need to know the address of a person and off you go.

    Fact #2 – Bitcoin’s transaction fees and processing times are far lower than those of bank transfers.

    Fact #3 – Time and time again, those who have researched the workings of Bitcoin have conclusively reported that it is, in fact, quite a bad means for money laundering schemes:

    http://www.sciencemag.org/news/2016/03/why-criminals-cant-hide-behind-bitcoin
    http://www.zerohedge.com/news/2017-07-17/criminal-groups-still-prefer-cash-bitcoin-eu-study-finds
    https://www.coindesk.com/bitcoin-cops-criminals/
    https://www.coindesk.com/uk-treasury-digital-currencies-low-money-laundering-risk/

    Fact #4 – You are quoting the needs of society. I quote the needs of the millions of unbanked people who cannot afford a bank account or who lead a nomadic lifestyle. Bitcoin allows them to break from the shackles of banks and to transact freely with others across the world.

    Fact #5 – Tulips do not have an inherent use. Bitcoin does, as you can see from the brief explanation above. Lack of tangibility does not automatically translate to lack of value.

    More than happy to answer any other questions which you might have on the subject.

    • jj micallef says:

      While you’re right in saying that bitcoins transactions are completely traceable, traceability without ownership is useless.

      For people with a coupleof decades on their shoulders, the closest comparison to cryptocurrencies is the banned “bearer” bank account.

      That said, and while he may have a point, JP Morgan boss is not best suited to speak of fraud. Muscat and his corrupt gang is even in worst position to promote bitcoin — only because they discovered that Panama and the like are not watertight.

    • Jozef says:

      The subprime fiasco was Clinton’s idea. He demanded banks finance people who posed excessive risk to get these into the housing market.

      The whole shebang was the banks coming up with the algorithms and packages to sell and trade the risk itself to offset the potential bad debts.

      Banks ultimately do as they’re told.

  7. Jetwest says:

    Daphne….Please stick to what you know best, investigative journalism on political affairs. If you understood cryptocurrency, you will see that it eliminates fraud, rather than encouraging it. Jamie Dimon is also very afraid of losing his job, which he will as Bitcoin gives the opportunity to people to send money peer to peer and store it in their own pcwithout the need of a bank. Bitcoin can literally bring down the banking elite and give people the ability to control their money. Just because JM said he wanted to change the nation into a blockchain country does not mean that you should oppose it. Educate yourself if you really want to write about the subject. Bitcoin and blockchain are the future – they are here to stay. Might as well pioneer on them instead of trying to join the countless (and clueless) individuals that said Bitcoin is doomed.

    • Only crazy anarchists think it’s an excellent idea to bring banks down.

      • Jetwest says:

        Seriously? You where at the forefront of a relentless campaign against some high profile people in this country in which you could not prove much due to the lack of transparency. And I do not know if you were around in 2008. Where you not appalled with the mess the banks have created and how they were ultimately bailed out by the taxpayer?

        Banks are going to have their kodak moment soon, mark my words. Governments are already starting to realize how this will impact and disrupt not only banks but many other industries. And this is because the BLOCKCHAIN here is the true revolution, not Bitcoin – Bitcoin is merely the currency that travels through the blockchain.

        Humanity tends to upgrade its infrastructure every so many years. We have had the Printing press as of recent, then came radio, then came TV , we have had the internet – now it is time for the blockchain. (If you notice, governments have always tried to control the infrastructure. Blockchain is decentralized, which is virtually impossible , think the Hydra dragon)

        Take a deeper look into decentralization yourself Daphne. You might also discover the fact that journalists now can publish the truth which is time recorded, visible to everyone and irreversible without the possibilty of censorship. Think of all your poor colleagues that write in fear of persecution of their own government. Blockchain, through anonimity and decentralization helps people like these, and the users can contribute directly to journalists – Thanks to cryptocurrency.

      • You’re confusing so many issues, primary among which is the fact that you can have blockchain technology (desirable) without cryptocurrencies (undesirable).

        And yes, only cracked anarchists want to bring down banks – because anybody who is not a cracked anarchist knows what the fall-out from that will be and does not take an anarchist’s delight in the disaster.

      • Jetwest says:

        I do not think I am the one confused here….I suggest you to read about it.

      • You obviously are confused. People with clear thoughts are able to lay them out in clear sentences.

    • La Redoute says:

      Muscat said he wants Europe to be a bitcoin continent.

  8. Veronica says:

    Daphne I am a regular on your blog and think highly of you. However, if you do not know much about cryptocurrency or understand the huge potential it has to help the world fight against the losing battle that is corruption then I suggest you refrain from posting these misleading articles.

    The CEO of JP Morgan has his own agenda when ‘advising’ that bitcoin is a fraud and it is solely because it is a huge threat to all banks as it essentially cuts out the need for one.

    Cryptocurrency has the potential to bank 3.5 billion ppl who are unable to obtain a bank account and offers financial freedom to anyone who holds it. When you say it is used for illegal activity you are painting a negative picture. At the of th day so is the dollar or any other fiat currency for that matter being used for all the wrong reasons. Crypto has th power to provide aid in the form of food and medical supplier to those hat truly need it just google how etherium was used to help Syria and the poorest parts of Africa.

    Do not cheapen your exceptional journalism by quoting a billionaire who has absolutely no desire for crypto to go mainstream.

    • I am sorry, but the fact that I am anti-Establishment does not make me a cracked anarchist. So the aim of the cryptocurrency fanatics is to bring down the banks. Yes, and then what?

      I don’t think you’ve thought this through. This is beginning to remind me of conversations I used to have 35 years ago with my late friend Julian Manduca. Even in my teens and with the hippy era only recently departed I used to get terribly impatient with this kind of ‘rage against the machine’ thinking.

      • La Redoute says:

        Here’s the bit I don’t understand about the Bitcoin evangelists. They’re convinced that a cryptocurrency is foolproof. So I’ll just leave this here:

        Bitcoin value surge sign of criminal activity

        http://www.washingtontimes.com/news/2017/aug/10/bitcoin-value-surge-sign-of-criminal-activity/?fref=gc&dti=321526564943741

      • Nik X Conti says:

        Oh Daphne, Daphne. Don’t just read one article inform your self for once. But we all know what this post is about.. you say black I say white…. you say white i say black ;) Seems like what ever you go up against succeeds … Then surely I’ll invest in bitcoin;)

      • “Don’t just read one article inform your self for once”

        My views are based on 45 years of reading extensively about a variety of things. I think you need reminding that forming an opinion about cryptocurrencies should not be done only the basis of informing yourself about the technology, but also on informing yourself on banking systems, the role played by banks in the economy, and speculative bubbles.

        You also need to learn about the pointlessness of reinventing the wheel: currencies can’t function without a banking system in the contemporary world, and you will realise before long that you are going to have to create the equivalent of a banking system so as to operate. Because otherwise, you are going to have ‘virtual currency’ but in a Stone Age operating set-up.

        Peer to peer loans, indeed. Might as well knock on my neighbour’s door.

  9. No, as a currency system, it most certainly is not. And this is exactly what Dimon meant when he said “inventing a currency out of thin air”.

    All contemporary currencies are virtual. Think about it. That piece of paper in your wallet calling itself a 20-euro note is only worth 20 euros because it’s backed by a promise to pay (from the Central Bank of the issuing country/the European Central Bank). Otherwise, it’s just a worthless piece of paper.

    In the absence of banks to back up a promise of payment, things used as currency are worth literally nothing in themselves – just like those conch shells.

    • Logger Alarm says:

      I have only recently started studying the area of crypto currencies and blockchain so I’ll say outright that I am no expert, but my understanding is (and I stand to be corrected) that while some coins are there to replace the use of banks, some others which are based on the same backbone, so to speak, are there to actually work hand in hand with banks and optimise payment transactions, data workflows etc.

      I think it is unfair to just label these currencies or technology as a scam that will blow up in everyone’s face since some teams out there are in my opinion are honestly working towards improving some payment and banking systems as well as data storage systems that have now become old and no longer properly support how reliant we are becoming on a daily basis on digital technology.

      One that comes to mind is Sia. The whole concept behind having data you store to the cloud dispersed all over the place and not just on someones remote server at a fraction of the cost and at almost 3-4 times the access speed seems like an interesting concept to me.

      Hence I think people have to draw a line in the difference between using the technology and its value and the people who are using it just as a means to make a quick buck at other’s expense.

    • Carmelo Establier says:

      The promise to pay is worthless and it doesn’t apply to euros or any other modern currency. Each currency has the value that each user gives to it.

      It is the agreement of all parts that makes the currency valuable. You can’t go to the European bank and get anything for it. In fact there’s the problem of increasing the amount of a currency in circulation and creating currency devaluation, and therefore inflation. Look at Venezuela, or Zimbabwe.

      This problem does happen with bitcoin now, but when the theoretical value is achieved, inflation will stop, as bitcoin will be stable and completely decentralized.

  10. WHAT ELSE DO BANKS DO BESIDES MOVE MONEY AROUND FOR CLIENTS, JETWEST?

    • Jetwest says:

      It has all been catered for. A whole ecosystem has been built now that could replicate exactly what banks are doing. Peer to peer loans exist already. Identity proof is being built already. The bank is a useless middleman that keeps around 3% of your money to loan them to other entities, that in turn sell these debt related products back to the clients. Again however, banking is merely one industry that is about to be dispruted. Visit the website coinmarketcap (dotcom) and see all the cryptocurrencies being built that include Healthcare, real estate, time proofing. Click on each coin and visit the website, also visit the announcement. You will see things much clearer then.

      • You know, I’m feeling quite nostalgic for the days of my childhood, when cracked anarchists simply took to the streets or blew up the occasional train station in Italy.

        So you have gone from ‘bringing down the banks’ to going to all the trouble of replicating a banking system so as not to use the existing banking system. Can you tell me why? Why would get around in a box-cart with bicycle wheels driven by foot-power when you can use a Jaguar like Adrian Delia? I’m genuinely curious. But I know the answer already, I think: NOT TO USE THE CAPITALIST BANKS AND TO PUNISH THE CAPITALIST BANKS AND THE CAPITALIST PIGS WHO OWN THEM.

        The 1970s are gone. Grow up. Every generation or so goes through exactly this, and then they get over it, because they realise that the banks are actually pretty useful and without them their entire way of life would collapse.

        Peer to peer loan, really? So if you want to borrow money “in crypto”, you do the equivalent of going to your father/friend/neighbour/local loan shark? Most sane people would rather go to a bank.

        And nobody, but nobody, loans you money for free, unless they’re your parent.

      • Jetwest says:

        Look up ‘smart contracts’ in a Google search please. There is nothing free in this world, especially loans :)

  11. Libertarian is just another name for a cracked anarchist, Veronica. You seem to think this kind of attitude is new, but it really isn’t. I grew up in THE era of cracked anarchists and libertarians, all the way from 1960s sedition to 1970s punk and middle-class European terrorists putting bombs in train stations and kidnapping prime ministers.

    So forgive me if I find all these arguments a little, how shall I put it, tired.

    • Veronica says:

      Ofcourse you are entitled to your opinion but in crypto we believe in a famous quote..

      First they ignore you, then they laugh at you, then they fight you, then you win.

      • I’m sorry, but I had thought bitcoin was a currency. I hadn’t quite realised it is a religion. “In crypto we believe..” I don’t enjoy upsetting people on the basis of their religious beliefs, so I’ll end this right here.

  12. You will notice from certain comments here that bitcoin has taken on aspects of a religious or political ideology, with its “believers” – for that is how they divide the world, into believers and non-believers – excited only or mainly about its potential, or so they think, to bring down the banking systems of the world.

  13. J. Vella says:

    ‘Banks have been abusing the financial system for their gain for far too long taking advantage and manipulating markets to bring in the profits. Bitcoin is decentralized and there is no stoping it.’

    My God, are you some financial terrorist?

    • Yes. It’s fascinating, isn’t it, how every generation throws up people with the same dysfunctional attitude, but every generation finds a different depository for them: religious sects and communes in the 1960s, middle-class terrorist groups in the 1970s, ashrams in India in the 1980s, and after that I stopped bothering to look, but apparently in the 2010s it’s financial terrorism called Crypto.

  14. Toni says:

    You seem to be concerned about the banks quite a bit. Banks are also adopting blockchain technology and cryptocurrencies, albeit a few.

    https://ripple.com/xrp/

  15. quickmick408 says:

    Well this is all fascinating, blew my brains out and reminded me I need to empty my small change jar and take it to the bank tomorrow, (if it’s still in business).

  16. You are confusing issues. Runs on banks, even the collapse of banks, have nothing to do with whether a currency is issued by the Central Bank.

  17. Again, you are confusing issues. You are dove-tailing the PRICE/VALUE of an object with the VALUE of a unit of currency.

    • Peritocracy says:

      The true value of Bitcoin and cryptocurrency is that you don’t need anyone’s permission to transact with anyone else on the planet.

      To those of us accustomed to Western democratic freedoms, it seems like we can already transact with whom we want, pretty much. But there are lots of people who are not that lucky, from the Venezuelans, whose government-backed currency is now worthless, to the vast millions who don’t have a bank account or even an id card, but do have a mobile phone.

      Bitcoin is censorship resistant. If the government shuts down your internet, you can receive transactions via satellite and send them by SMS or QR code or in many other ways.

      When the banks closed the accounts of Wikileaks, they had to rely on Bitcoin for donations and nobody could stop them becasue Bitcoin has no central point of control that can be manipulated or shut down. And that is exactly what gives it a value that no other currency has. Your money is in your control. Just like digital gold.

      • Why not just keep your money at home under a tile, Peritocracy? I mean, really. And aren’t you missing something important? People who can’t get a legitimate bank account don’t have the money anyway. While those who live in countries like North Korea and Venezuela are not going to be helped by access to bitcoin because they can’t buy their provisions with bitcoin at the supermarket (if there are provisions at all, which there aren’t in North Korea).

  18. etc90 says:

    Seems like you’re trying to convince yourself more than convince others. Recessions are part and parcel of a healthy economy. The last one in 2008 was long overdue, and the next one ain’t too far away.

    But crypto and blockchain ain’t the answer – and that’s from someone who hates banks and bankers as much as you lot.

  19. We are NOT talking about blockchain here. We are talking about cryptocurrencies. Do not merge the two.

  20. L Farrugia says:

    Okay so I’ve read all the comments and my head is in circles. Say I invest 40,000 euros of hard-earned cash into bitcoin so that would give me circa 10 bitcoins (at the rate of 4,000). So in layman’s terms could someone explain how I would be able to get my daily provisions, subscribe to my favourite TV supplier, eat at my favorite restaurants?

    Well you get my gist – always if banks are not going to be around?

  21. A. Caffari says:

    It wasn’t actually a bailout for JP Morgan Chase. The $12 billion injection and $30 billion guarantee was to compensate JP Morgan Chase for absorbing Bear Stearns and all its liabilities which were huge.

    Had they not done that, it would have created an even bigger financial disaster felt the world over. So to be fair, Jamie Dimon did not run JP Morgan Chase into the ground.

    In fact, during 2008, JP Morgan Chase registered a 10% increase in its stock price during a bear (no pun intended) market where all other institutions were bleeding value by the day.

  22. Antoine Vella says:

    Perhaps the experts here can explain this: if I claim to have the equivalent of one million euros in bitcoin, who can say it’s not true?

    And another question: would they sell me their house if I pay double its market value, but in mathematical bitcoin?

    • Mark Bartolo says:

      I just re-read your second statement. Of course! Whenever you want I will do it. I think you do not know that I can quickly convert bitcoin into euro (or any other currency) in an instant with a click of a button.

      So as soon as you give me double the price of my home in Bitcoin, I will instantly (seconds) convert them to Euro on an online exchange like, Poloniex, Kraken, Bitstamp & Bittrex and get my Euro immediately.

      I will receive your bitcoin onto my mobile phone and convert to Euro instantly from my mobile phone. Then I send them to my local bank and there you have it, I would have sold my house for double the market value less fees.

      Note that bitcoin transaction fees are pittance when compared to FIAT transaction fees. Again whenever you are ready I can sell my property at double the market value but in mathematical bitcoin.

      • Antoine Vella says:

        There was a radio advert some times ago regarding bitcoin. One of the slogans was “do you want to create money?”.

        Creating money is something that most people would love to be able to do.

  23. Kyle Pullicino says:

    Just like any other technology, Bitcoin can be used in bad ways. However, the beauty of blockchain technology is that it also gives us the tools we need to police this.

    In the future, tax can be collected using the blockchain, for example. With Ethereum, we can state that the tax collected is not under the control of a single person who can embezzle or misappropriate the funds. Instead, the blockchain can ensure (and enforce) that the tax is distributed according to a budget approved by a parliamentary majority. No more, no less!

    The transparency we would achieve in this case is off the charts! No one can unilaterally transfer funds that do not follow the agreed budget and all the fund transfers through government departments are fully traceable.

  24. Lots of thing are rare, but it doesn’t follow from this that they are precious. Precious metals and precious stones have one fundamental thing in common: they are beautiful, as well as rare. They started off being prized in and of themselves, for their own intrinsic qualities as things of beauty – AND THE CURRENCY VALUE CAME TO BE DERIVED FROM THAT.

  25. Oh good. I see we agree on that at least.

  26. It’s all right, Jetwest, I’m actually quite intelligent, you know.

  27. I think you’ve missed the point of Jamie Dimon’s words: his argument is entirely about DEMAND for bitcoin. Right now bitcoin is being ‘mined’, bought, sold, whatever, not as CURRENCY but as a tradable commodity – yes, just like those tulip bulbs.

    But the essential purpose of currency is not to be traded in and of itself. Yes, lots of people buy and sell dollars, or euros, or sterling, or whatever else, for profit – or hold dollars as an investment. But the main purpose of currency, the reason people need it, is to allow them TO BUY GOODS AND SERVICES.

    • Mark Bartolo says:

      Here;

      overstock.com

      buy goods.

      There are a LOT of other places where you can buy goods and services. Check out the newly launched decentralized shop called Open Bazaar. It is competing with ebay.

      • Yes, because I really, really want to narrow my options after having spent the first 30 years of my life like that. No thank you. Your generation might find lack of consumer choice an interesting alternative, but for those of my generation it was harsh reality and therefore we are not interested.

  28. And you’re happy with that? If you want a cult, find a proper one. The last time somebody turned money into a religion it ended very badly and nobody ever found that golden calf.

  29. A. Caffari says:

    I nominate this as the comment of the day.

  30. This is all so tedious. Why on earth do these people think banks and banking systems developed in the first place, if not as an efficient solution to the problems they are trying to reinvent for themselves?

  31. Mark Bartolo says:

    Shall I hope that your FIAT gets devalued? I will not as I wish you luck. Alfred Sant (if I am not mistaken) was about to devalue the lira by some 10% at one point. Devaluation of FIAT is also a real possibility.

  32. Oh yes, come on – let’s make life more difficult than it is already and reduce our choices. The whole point of the internet is to make shopping so much easier, but instead let’s make it more difficult with bitcoin.

  33. Forgive me for asking the obvious question here, but how are you going to stop people using banks or eliminate banks altogether?

  34. Are supporters of cryptocurrencies deliberate in saying ‘blockchain’ as though it is the same thing as a cryptocurrency rather than the enabling medium which can be used beneficially for other purposes but not necessarily cryptocurrency?

  35. I think lagging behind in bitcoin and blockchain is the least of Malta’s worries right now, don’t you.

  36. I can buy real, tangible stuff with a paper cheque or a plastic card, Mark. I can even buy stuff with no cheque or card at all, but just by keying the numbers on the card into a little box on my screen.

    • Mark Bartolo says:

      So you have two options. I am giving you a third option.

      • I don’t think you understand that you’re dealing with somebody who has never been interested in cults, sects, religions, gambling, crazes, or anything similar, and who always uses the more serviceable route.

        If my plastic card does the job so efficiently, then I’m not going to bother with conch shells.

  37. I’m guessing you have a lot of time on your hands and are not a married man with three children and a job that keeps you away from home for 12 hours a day.

  38. A Camilleri says:

    That’s why you have to justify substantial cash deposits and withdrawals. That’s also why you have to declare it at the airport.

  39. Oh Madonna, do you understand what you’re saying? “This thing has been created. There are only 21 million. People are hunting them down. They are getting excited about it so the value is going up. And we call it currency.”

    Please. Read about Tulip Mania.

  40. Alfred Psaila says:

    So JP Morgan is saying cryptocurrencies are a huge bubble, yet in Europe, banks are coming together, embracing this now potential and working together to integrate cryptocurrencies within the banking system. See here:

    http://fortune.com/2017/08/31/banks-ubs-blockchain-settlements/

  41. nina says:

    ehm, excuse me but if I understood your comment correctly you are highlighting the benefits of electronic money, as against cash, and not of bitcoin. Now imagine electronic money on block chain technology and you have what the European Central Bank is considering.

  42. Joseph Simon says:

    Bitcoins have been around since 2009 and the estimate is that there are 3 million users worldwide.

    They were never intended as a store of wealth or a speculative instrument but only as a payment mechanism. The consensus is that bitcoins do not meet the definition of money.

    Bitcoins are very volatile and their limited ownership makes price manipulating easy

    Of course any fraudster knows that people are gullible, stupid and greedy. Hence the recent frenzy

  43. Manuel Camilleri says:

    That’s why criminals are finding it hard to pass through airports and customs carrying thousands of dollars in their bags. That’s where Bitcoin comes in handy.

  44. You should. It’s really fascinating.

  45. I know. I can tell. I should be working for Cambridge Analytica.

  46. Yes, that’s right. We should have stuck with conch shells and weighing out POUNDS of silver.

  47. D. Borg says:

    Well, at this rate, Malta may well be swapping the Euro for bitcoin, depending on the outcome of this Saturday’s vote.

  48. NoThanks says:

    Nobody. Who backs gold, silver, platinum, shares in your favourite company, etc? Yup, nobody (and everybody) as well.

    Still these are tradable commodities. There’s even more weird stuff online, like domain names or fictitious in-game items (I’m serious). Increase their portability and their liquidity and you’ve got a quasi-currency on your hands.

    Government backing helps in establishing trust. But it is neither a necessary nor sufficient factor.

  49. ‘Believe/don’t believe’

    Malta must be the only post-modern society where people still think in terms of belief rather than assessment and understanding.

  50. I don’t take kindly to being told to educate myself by somebody half my age who can’t construct a proper sentence. But I’ll let it go and hope greater self awareness comes with age.

  51. Damn, you should have got me his name.

    • JTMadeira says:

      It would be rather ironic if the the ill-gotten gains of Panamalta politicians were in Bitcoins and the value were to collapse. Wishful thinking, or is it?

  52. If people can’t get a bank account, it’s generally for a good reason. And bitcoin isn’t going to help them.

    • Peritocracy says:

      What sort good reason are you thinking of for people not being able to get a bank account? If it’s blacklisted criminals, they already have their alternatives, whether they are pimps, lawyers or prime ministers.

      The truth is many people can’t get a bank account because they are too poor to be worth it to the banks. The 2 billion unbanked surely aren’t all crooks. They just don’t have access to financial services. Now many banks around the world now charge fees just to maintain an account open, squeezing more and more people out of the system.

  53. It also works the other way round, Claire. I don’t know how old you are, but I am old enough to remember a futuristic programme called SPACE 99. It pictured us all wearing space suits and eating pills in space ships in 1999.

  54. I believe J Vella works in money.

  55. Alfred Psaila says:

    actually both, read the last paragrah

  56. Galeforce says:

    When someone dies leaving no will, it is relatively easy for a notary to routinely check for a list on assets including money in bank accounts.

    But how can a notary , in practical and realistic terms, check routinely for any bitcoins that couldbe stashed away in some cryptobank, or crypto wallet or crypto piggy bank of the deceased?

    And what happens to the bitcoins that remain unclaimed in the case of say , the sudden disappearAnce of its owner?
    That is the sort of practical question that I think the post-war baby boomers like me are actually interested about.

  57. NoThanks says:

    I think your assessment of debt is wrong. Bitcoin won’t eliminate debt, because debt is useful. If debt is not possible with bitcoin, rest assured someone will figure out how to create it.

  58. Kevin Zammit says:

    Why didn’t the CEO explain to us why his bank JP Morgan is part of the Ethereum Alliance. Isnt it a blockchain? Can we come clear on this please Mr. CEO?

  59. I did not write an ‘opinion piece’ – unless you consider two sentences an opinion piece. I directed people to two news reports published today. If I were to write an opinion piece, rest assured that it would be much longer and contain details.

  60. There is definitely a reason why it can’t: because people have a currency that’s legal tender already. With that reasoning, why can’t people in Malta go into a shop and demand to pay in US dollars? After all, it’s legal money.

  61. Lillian Smith says:

    But is Bitcoin legal tender? I think Bitcoin is a Ponzi scheme. Now that they’ve hooked the punters, it is time to spring the trap.

  62. What do you think money was originally, Peritocracy? Why do you think it’s called a pound? Because it was a pound of silver. Livre, Lira – same thing.

  63. I’m beginning to think you people love it for its Tomb Raider qualities.

  64. Jozef says:

    Exactly. Fancy turning a piece of paper worth cents into something worth 20 Euros? And we oblige by accepting the signorage.

    Which is why blockchain should not be demonised.

  65. My sons are in their 30s and most definitely don’t need me to buy bitcoins for them. And you’re not making sense. You’re talking about crypto-currency while ignoring the fact that if you remove the banking element, you take the system back 100s of years rather than advancing it into the future. Banks don’t just store money and move it around.

  66. It’s a false comparison.

    Bank cards are now standard. But do you know how low the take-up and use actually is in Malta? That’s because Maltese people are secretive, and every time you use your card, whether it’s a debit or credit card, the people at the bank know where you have spent your money. And so does anybody else with the authority to obtain your bank statements.

    • Peritocracy says:

      Crypto will ultimately offer ways to be as transparent or anonymous as you want. The system is inherently traceable and transparent (ideal for honest governments and public agents) , but then there will also be ways to pool your transactions with those of other people so there is no way to tell who paid whom, and this will grant anonymity for private citizens, just like paying in cash. Both are technologically possible.

  67. Zeus Kronion says:

    Excelllent analogy

  68. Jozef says:

    Surely he’s getting requests to turn Malta bitcoin friendly.

  69. Antoine Vella says:

    Cryptocurrency means it’s hidden. How transparent can it be if it’s called “hidden money”?

  70. No, actually banks developed because people needed to borrow money. And that is still the fundamental basis of their existence.

    • Peritocracy says:

      There will be other ways to lend and borrow money, from crowd lending, which already exists to other methods still to be invented. Believe in human ingenuity. It’s still early days and the technology has to mature.

      Remember that the idea of heavier-than-air flight was once mocked and ridiculed, because how could it be done? Today we get into a plane without a second thought and proceed to die of boredom. There went man’s dream of flight.

      • “Other ways to lend and borrow money”

        But WHY would anybody bother. You have always got to ask yourself WHY. Why go from a serviceable system of getting a loan from something called a bank to ‘crowd-lending’. I mean, honestly, WHY?

      • Peritocracy says:

        You keep thinking back to people who can already borrow money. That’s not where full adoption starts. There are lots of people who don’t have access to bank loans who would love an alternative to the loan sharks they depend on. A lot of the financial systems of tomorrow will probably be tried and tested by people who have no alternative, those for whom something is better than nothing. They will be the first to bother, and to perfect the technology.

      • I repeat that if they have no alternative there’s a reason. Banks WANT customers.

  71. Esteve says:

    And all this time I’d thought it was due to its physical properties (apart from its rarity): its stability, easiness and safety in handling and also its (relatively) easy authentication.

  72. Jozef says:

    Well said. Which should introduce a minimum of mainstream boring politics into the dialogue. One prays.

  73. Major Tom says:

    Dark net drug-lords love cryptocurrency as do money launderers.

  74. I don’t control the free market, Joe. I don’t control the Nationalist Party either. If I had such amazing powers, I wouldn’t bother to work for a living.

  75. No, Claire, I’m trying to explain to you that predictions about the future are very unreliable. Space 99 did not come out of thin air, but was the product of a culture in which people really thought, after the moon landings, that the age of Space had begun and that by the year 2000 (which was unimaginable) we would be living on different planets and eating pills instead of food.

    I actually remember watching editions of Panorama (a serious documentary, just for your reassurance) when I was a child, quoting experts explaining how ‘in the future’ people would all wear clothes made of ready-crumpled fabric because there would be no time for ironing (sample outfits shown) and how we would be flying through the streets on scooters that hovered about a foot of the ground and were jet-powered. But I look around and the basics of life haven’t changed at all since I was 6: just the technology on phones, banking, internet and of course cheap air travel. But the pattern of life is no different. We still iron our clothes, wash them in a washing-machine, have baths and showers, cook and eat normal food rather than adding water to powder or consuming pills, and so on.

  76. No, Joe, that isn’t quite how it works.

  77. A Camilleri says:

    For the same reasons you have to declare cash over €10,000 at the airport.

  78. Salvina says:

    So did the telecoms giants say about VOIP in the 90s. Now they are in the game. On this one I think the jury is still out and my hunch is that this may be a big disruptive innovation that will rock the foundations of currencies as we used to know them.

  79. The Sceptic says:

    Mr Dimon may have been somewhat cheeky with this diatribe. His company is a founder member of the Enterprise Ethereum Alliance, and has JP Morgan executives on the Board. This no-so-minor detail was not reported in most articles that reported Dimon’s views.

    https://entethalliance.org

  80. I can’t believe you’re thinking about Bitcoin on a night like this.

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