Do you understand what Bitcoin is? If you answered “Yes,” you’re in the minority. A lot of people don’t.
Jamie Dimon, chairman and CEO of JPMorgan Chase, famously dismissed the cryptocurrency as a “fraud” in September, later saying on CNBC he wasn’t going to talk about Bitcoin anymore, but if anyone was stupid enough to buy it, they were going to “pay the price one day.”
Dimon’s basic problem with Bitcoin is that it lacks the backing of any nation or government, which by the way is one of the aspects that proponents see as an asset. Transactions done in Bitcoin don’t require any middlemen, i.e. banks, and are done anonymously, leading Dimon to add that Bitcoins are great for “criminals.”
Meanwhile, the value of bitcoin has been soaring, thanks to speculators. As of Nov. 10, one bitcoin was worth $6,944.24. Dimon was not impressed, pointing out there have been currency bubbles in the past. A tulip bulb, he says, was once worth something like $75,000.
Dimon was referring to what is commonly thought to be the first speculative bubble in history, the tulip bulb craze in the 17th century Dutch Republic. In any event, Dimon believes Bitcoin will ultimately be “crushed” by governments who like to keep a tight rein on their currencies.
David Johnson, CEO of Latium, another form of nascent cryptocurrency distinct from Bitcoin, understands the confusion surrounding these new forms of money.
“I think a lot of people really don’t have any idea what it is,” he says of Bitcoin. Johnson’s explanation is that Bitcoin is an encryption key. It’s similar, he says, to what happens when you log onto your bank’s website and transact business.
“That’s all Bitcoin is, a string of numbers,” Johnson says.
Johnson argues that everything has value based on perception, and Bitcoin is no different.
“The U.S. dollar has value because everybody believes it has value,” he says. A perfect example of value being perception, Johnson says, is the collapse of the German mark after World War I, when it took a “wheelbarrow full of cash to buy a loaf of bread.”
“Nothing creates value except the faith we have in our ability to transact (business),” Johnson says. With that in mind, Johnson has launched Latium, which he sees as a cryptocurrency technology that will allow for “mass adoption.” Johnson believes Latium will act as a bridge between the “99.9 percent who have no concept “ of what cryptocurrency is, and make it something they can use.
Based in Madison, Mississippi, the “tech center of the world,” Johnson says, Latium expects to launch in the second quarter of 2018. Unlike Bitcoin, which Johnson says takes two or three days to get, with Latium you could be performing a task within minutes and getting paid.
Put simply, Latium will be a way to pay for the performance of tasks. “Anybody with a skill set can come in, perform a task big or small and be paid in cryptocurrency,” Johnson says.