5 Reasons Why Fox Are Scared Of Cryptocurrency

5 Reasons Why Fox Are Scared Of Cryptocurrency

Yesterday, Fox Business, a subsidiary media channel of 21st Century Fox posted an article titled: 5 Reasons I Won’t Invest in Bitcoin, Ethereum, Litecoin or Ripple, you can see the original article here: https://www.foxbusiness.com/markets/5-reasons-i-wont-invest-in-bitcoin-ethereum-litecoin-or-ripple This sparked some interest from me, firstly because it is very regressive for a 21st Century business channel to be writing about 21st Century business opportunities in such a bad light and secondly, you’d think the business experts at Fox would be all over the benefits of cryptocurrencies, not the other way round right? Well in the pursuit of fair and honest debate, i’ve got a few counterpoints for Fox that should hopefully provide at least some food for thought within their discussion. Please see the full article if you want to explore their discussion, for ease, I am just highlighting their main points here. Blockchain is a long way from being a real world solution The article states:

“Namely, businesses won't make the jump to blockchain until the technology proves its ability to scale. However, this can't be proven in the real-world until businesses make the leap and give blockchain a try without the so-called training wheels.”

Forgive me if I am wrong, but this sounds somewhat like actually, the blockchain isn’t the issue, the issue is that businesses are unwilling to jump into the unknown. They are right in saying that the blockchain can’t prove its scalability until businesses make it do so, but the problem isn’t with blockchain being a long way off an ideal solution. We know blockchain technology has proved itself again and again. The problem is, many companies don’t see it as a solution yet because they either don’t understand it, or, they fear its potential, through both a lack of regulation and legislation. This is of course understandable but maybe Fox have worded their argument wrong? The barrier to entry is exceptionally low The article states:

“How about the exceptionally low barrier to entry in developing a digital currency and/or blockchain. All it takes to join the ever-crowded field is time, money, and a team that understands how to write computer code.”

Right okay, I don’t believe that is technically accurate. It disregards the tiresome work behind compiling a white paper, market research, a very in depth technical knowledge and of course risk. The barrier for entry it not low, it is just achievable given the right level of commitment, this is not a bad thing, it is a sentiment to the level of passion that exists in the cryptocurrency industry. If the above is true, then why haven’t Fox made a cryptocurrency yet? A need for regulation The article states:

“I wouldn't even think about buying into the cryptocurrency craze without a major improvement in regulation.”

In some instances, this is a fair argument, but is it a strong enough argument to use against never investing in any form of cryptocurrency? There are more regulated alternatives out there, it just requires a bit of background research first. I do believe that regulation is an issue for many but it does present a lot of controversy within the crypto-sphere at the moment. Few tangible means to value cryptocurrencies The article states:

“There's no fundamental or logical way to value cryptocurrencies opens a new window, which makes for a pretty good reason not to buy. Sure, the old adage that "an asset is worth what someone else will pay" for it is true, but hoping someone else buys back your tokens at a higher price than you paid isn't exactly a sound investing strategy.”

As with everything, the value of cryptocurrency is determined by various different behaviours and outcomes. It sounds like Fox are accusing the value of cryptocurrency of being almost an imagined concept. Well if you strip the essence of money back to its roots, its entirely composed of imagined values and ideas. It’s a discourse which has woven its way into society. This argument disregards the early days of cryptocurrency and I would suggest that by its sheer nature, cryptocurrency is a sound investing strategy because unlike traditional investments, as a trader you can help shape its value. The tax situation is a nightmare The article states:

“The IRS recently won a court case against cryptocurrency exchange Coinbase that may allow it to go after thousands of tax evaders. Also, the Tax Cuts and Jobs Act eliminated a profitable tax loophole opens a new window, known as the "like-kind exchange," which had allowed investors to sell one cryptocurrency and buy another (or others), all while avoiding capital gains taxes.”

Does anybody remember the report from 2014 which highlighted some of the strategies used by 21st Century Fox and other organisations to avoid paying accurate taxes? Take a look here if you need a reminder: https://www.theguardian.com/australia-news/2014/sep/29/tax-avoidance-costing-budget-more-than-8bn-a-year Tax avoidance is not an issue that is just represented by the cryptocurrency community, in fact as we know, corporate tax avoidance is a huge international issue, this argument by Fox highlights one small section of that. This is a problem that needs to be addressed worldwide and is not a realistic reason for trying to put people off investing in cryptocurrency. So, overall, what do I think about this? Well it's pretty weak, there are many valid reasons for not wanting to invest in cryptocurrency but these arguments stink of uncertainty, built upon foundations of poor research and an unwillingness to understand the industry. Yes, some of the points are valid but I do think there are ways and means of working around them. I still don’t see why Fox have posted this, it doesn’t ring true with the future of financial investment and surely they should be able to see that there is money to be made in cryptocurrency? My verdict is that it is just Fox trying to be a bit controversial, as am I by trying to outline a succinct counter argument. Please do read the article for yourself, it is at least insightful and offers some food for though as indeed I intend this article to. Featured Image Source: Flickr - Great Photo By Johnny Silvercloud

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