Founding PayPal CEO Calls Bitcoin a "Scam", Here Is Why He Is Wrong

Founding PayPal CEO Bill Harris has labeled Bitcoin the "Greatest scam in history" in a frustrated blog post earlier this week, referring to the cryptocurrency as a "Colossal pump-and-dump scheme" and addressing cryptocurrency investors as "Losers."

According to Harris, "a Bitcoin has no value at all," a perspective that is, apparently, based on a series of flawed, highly reactionary and poorly-researched opinions - all of which lack objective fact.

While Harris may be ill-informed when it comes to the reasons behind his anti-Bitcoin stance, the issues the PayPal founder highlights during his recent teardown of Bitcoin are worth addressing, if only for how frequently they are brought up by cryptocurrency opponents.

Harris brings up a number of different reasons as to why he believes that investing in Bitcoin is sure to result in the loss of all investor capital, focusing on three primary points that don't specifically address Bitcoin but are rather aimed at cryptocurrencies in general.

Bitcoin, which can currently be used as a currency at hundreds of thousands of stores and businesses around the world including Microsoft, KFC, Playboy, Subway, massive retail electronics giant Bitflyer, as well as online retailer Overstock, is experiencing rapid adoption.

It's now possible to use Bitcoin to pay for holidays via Expedia, purchase virtually anything via ecommerce platform Shopify, or even travel to space with Virgin Galactic.

The second point highlighted by Harris is that Bitcoin is useless as a store of value as its extreme price volatility makes the cryptocurrency an undesirable store of value.

Harris even contradicts his own statements regarding the effectiveness of Bitcoin as a payment method when stating that the primary use of Bitcoin is as a payment method that circumvents law enforcement, stating that its "Use is dominated by illegal endeavors." If Bitcoin is such an inefficient payment method, then why would it be "Best-suited for one use: Criminal activity"?

Harris argues that "a Bitcoin has no intrinsic value" and refers to the greater fool theory, stating that Bitcoin is driven by the irrational beliefs and expectations of market participants.

Bitcoin allows individuals to "Become their own bank," controlling the way the value represented by their currency is stored, managed, and transferred.