Co-founder of Wikipedia, Jimmy Wales, criticised Bitcoin’s viability because of the risk of losing funds. Crypto community members disagreed with his remarks.
I forgot my bank password and lost my entire net worth. No, actually that didn’t happen, because banks work and bitcoin doesn’t.
— Jimmy Wales (@jimmy_wales) December 10, 2023
“I forgot my bank password and lost my entire net worth. No, actually that didn’t happen, because banks work and bitcoin doesn’t,” — Wales wrote.
The statement by the Wikipedia founder provoked sharp reactions from cryptocurrency supporters. Many reminded him of the flaws in the banking system.
Alex Gladstein, director of strategy at the Human Rights Foundation, noted that financial institutions function normally in countries with the rule of law and a strong currency. Only about a billion people worldwide have access to such banking services, he added.
Banks work decently so long as you live in a country with rule of law and a strong currency. So maybe ok for ~1 billion people out of 8 billion people. And they tend to not work very well if you criticize the government or voice provocative opinions
— Alex Gladstein ? ⚡ (@gladstein) December 10, 2023
Founder of Lyn Alden Investment Strategy, Lin Alden, emphasised that bank account holders are not always safe. As an example, she cited a Lebanese doctor who lost 95% of their savings due to hyperinflation.
One of the most heartbreaking emails I got was from a Lebanese doctor who lost 95% of their net worth due to hyperinflation, because they held it in banks/currency.
They were too busy being a doctor rather than a hands-on investor on the side as well, assuming the money is safe.
— Lyn Alden (@LynAldenContact) December 10, 2023
“If you have a dollar account in a developing country’s bank, your risk/reward is that you still get slow devaluation of the dollar, but without real dollar safety, since the bank has no access to the ФРС. And what are you actually holding? It’s a bond fund with a ‘junk’ rating and leverage, for which no help would be provided if things go badly,” she explained.
Founder of Web3-project E8, Caterina Zhang, reminded Wales of the banking crisis of early 2023. However, he noted that at that time ordinary people did not lose money.
Self-custody indeed needs private key management which is a bit challenge for people new to crypto. Good news is that more and more 3rd party custodian services are being developed by institutions including banks. People have options to hold their crypto assets by themself or…
— Caterina Zhang (@caterinazhang88) December 12, 2023
Zhang acknowledged the need to manage private keys when self-storing digital assets, calling the process challenging for newcomers in the crypto sphere. However, she stressed that more and more third-party custodial services are being developed by traditional financial institutions, including banks.
According to the CEO of the Coin Corner exchange, Danny Scott, the Wikipedia founder is comparing two different things. His scenario is closer to forgetting the password to a trading platform rather than a wallet, he added.
You’re comparing 2 different things
That scenario is more akin to forgetting your password to a Bitcoin exchange, in which case you could reset it, like a bank.
Physically storing the cash yourself would be a better example, but you lose that and its gone, the same as Bitcoin.
— Danny Scott ⚡ (@CoinCornerDanny) December 10, 2023
“The best example would be self-storing cash, since if you lose it, it disappears, just like Bitcoin,” Scott clarified.
Founder of JAN3, Samson Mow, reminded Wales of Wikipedia’s difficult position. In his view, the organisation would not have to beg for donations every year if leadership had bought the first cryptocurrency a couple of years ago.
If @Wikipedia just bought #Bitcoin a few years ago like I suggested, you wouldn’t have to beg for donations every year in perpetuity.
— Samson Mow (@Excellion) December 10, 2023
Despite the criticism, in 2021 the head of the online encyclopedia put up for sale the first version of the site at Christie’s in the form of a non-fungible token.
As reported in November 2023, Euro Pacific Capital president Peter Schiff stated that gold is better than the leading cryptocurrency, naming the latter a “cheap imitation.” Earlier he compared Bitcoin enthusiasts to a sect.