On Jan 19th, Jamie Dimon, CEO of JP Morgan Chase, the largest consumer bank in the US, shared his views on bitcoin with CNBC’s Squawk Box. And phew, let me tell ya, it’s a veritable tour de force of status quo FUD (Fear. Uncertainty. Doubt.) and logical fallacy. So, gather round frens! Let’s deconstruct the highlights of Mr. Dimon’s take on bitcoin to examine why it is all completely wrong.
Bitcoin is a hyped-up fraud, a pet rock!
For the opening salvo, we get a nice 1980s spin on the age-old “Bitcoin is a fad” / Tulip Mania mantra. This is the gold standard (pun intended) of a priori arguments against bitcoin. If one decides, axiomatically and in their own mind, that bitcoin is a fad, then no amount of empirical evidence to the contrary may sway them.
Along with a priori reasonings, this argument generally works best in tandem with deep appeal to both authority and incredulity. Mr. Dimon, being one whom society is told not only understands but controls money, wields the former expertly and implicitly with his every statement — given his position, this would be the case even if he did not want or intend for it to be so. He’s Jamie Dimon, a name synonymous with money, America’s friendly-faced rich uncle — he should know best, right? To the latter, dismissing bitcoin as a fad brings soothing conform to the minds of those irreconcilably bound to the status quo. For such a person it is easy to believe that bitcoin is too exotic, too transformational, too disruptive to be successful because it is also extremely convenient to believe the same. It denies that anything transformational is happening, and therefore absolves them of having to grapple with, make, or accept changes that they would prefer not to — a dangerous magical thinking in the face of rapidly accelerating monetary and technological evolution.
So, in making this argument, Mr. Dimon willfully ignores the large and clear body of observational evidence that bitcoin is not a fad. Examination of bitcoin’s hashrate (compute power directed towards the bitcoin protocol at significant cost of money, time, effort, and management) and number of bitcoin holders shows a steady and strong upward trend over the past 14 years despite extreme fluctuations in bitcoin’s USD price, exchange hacks and crashes, and roiling global regulatory animus. Rather, observation would suggest a continuously and growing number of people, the world over, find both real and enduring value in bitcoin — the opposite of a fad if there ever was one.
Blockchain, not Bitcoin!
For his second trick, Mr. Dimon presents “Blockchain, not bitcoin!” When host, Andrew Sorkin, raises that firms like BlackRock are investing in bitcoin infrastructure as a counterpoint, Mr. Dimon wastes no time to aggressively reframe the conversation around blockchain, “No, that’s different — blockchain is a technology ledger system that we use to move information […] That’s a technology ledger type of thing that we think will be deployable. But remember, we’ve been talking about that for twelve years too, and very little has been done.”
What a pivot! It is hard to believe that Mr. Dimon’s changing the subject to “blockchain technology” is accidental. It certainly could not have been lost on him that just days prior BlackRock had added bitcoin eligibility to its 15B USD Global Allocation Fund while also committing a new 17M USD loan to bitcoin miner Core Scientific. Hence, the question was about bitcoin, but Mr. Dimon’s answer was about “Blockchain.” Which is to say, it was a purposeful and evasive non-answer.
Further, by Mr. Dimon’s own admission, the bank’s 12-years long engagement with “blockchain” has yielded scarcely little fruit. Conversely, what has bitcoin achieved over the past 12 years? Well, since Jan 19th, 2011 bitcoin has monetized from 0.32 USD to some 23,000 USD on the day of this interview, weathering eight 50%+ price corrections and an ATH of nearly 69,000 USD in between. It is on the balance sheet of Fortune 500 companies. It is legal tender in El Salvador. And it is estimated to be held by at least 100M people, globally. “Blockchain” or distributed ledger is simply a single component element, along with proof of work, decentralization, equitable supply and issuance rules, and first mover advantage which have enabled bitcoin to be the emergent, revolutionary monetary phenomenon that it is. In short, it should be clear to anyone seeking the truth of the matter that bitcoin, not blockchain, is the key innovation here.
How do you know its gunna stop at 21 million!
Next, Mr. Dimon hits a crescendos by rejecting that bitcoin’s supply is fixed at 21 million coins, “Well maybe its gunna get to 21 million and Satoshi’s picture is going to come up and laugh at you all — and by then satoshi will have taken out billions of dollars!” Lets be clear here, this is not some technical or economic argument based on evidence or logical reasoning, this is purely argumentum ad ignorantiam, appeal to ignorance. The premise here is that as we can neither time-travel into the 2140s (when the last bitcoin is mined) nor prove with absolute certainty that there is not some heretofore undiscovered corruption in the Bitcoin Core code that will one day, someway, somehow, result in violation of the 21 million supply cap — therefore, Mr. Dimon’s assertion that bitcoin’s supply is not fixed must be taken as correct.
This is, of course, absurd. But it is subtle, pernicious and, sadly, can be quite convincing FUD to the many people attenuated to the new theology of accepting all things digital as majik, unbounded from fundamental mathematics or the laws of physics. Believing that “anything is possible” through technology can also be used as false refutation if something, say, the corruption of bitcoin’s supply cap, is presented as not possible. Yet, bitcoin’s supply cap of 21 million is defined in the protocol source code — a code that is downloaded and run independently on each bitcoin node. As the code is open source and constantly audited, in actuality, we are left with overwhelming evidence that bitcoin’s supply is fixed to 21 million, and no evidence that it is not. And in the realm of empirical reasoning, where we all should be operating - Jamie Dimon most of all - this is as good as it gets.
FTX was a “Decentralized Ponzi Scheme”
Ok, so in no uncertain terms, FTX was a centralized Ponzi scheme. There was never, for a single moment, anything decentralized about FTX, Alameda, or any of their “crypto projects.” Host Joe Kernen, before he is cut off by Mr. Dimon, aptly points out that conflating FTX’s criminality with bitcoin would be like conflating Bernie Madoff’s criminality with the very concept of banking itself — an overreach, and one that Mr. Dimon certainly would not agree with himself (JP Morgan having been Madoff's primary banker and all, under Mr. Dimon's tenure no less...). All of this is important to remember because what Mr. Dimon does here is a sly and savvy heuristic attack on the very idea of decentralization. Giving that decentralization is the organizing framework that underpins bitcoin’s security and network resilience, this can and should be viewed as an attack on bitcoin, albeit an indirect one. So, Mr Dimon, even when disparaging the crypto criminals at FTX, seems unable to help himself from doing so in a way that falsely misdirects ire at the bitcoin ethos.
Conclusion
Jamie Dimon is wrong about bitcoin. His arguments are dismissive, dare I say lazy, ignore empirical evidence, and rely overwhelmingly on logical fallacy and topic/conclusion misdirection. It can be tempting for established bitcoiners to simply disregard Mr. Dimon as an “enemy of bitcoin,” yet his positions — no matter not shallow, simplistic, or wrong — represent the thinking of Boomer money holders and their Gen X corporate manager allies writ-large. While Bitcoin itself requires no change to prove these people wrong and obsolete their worldviews, we bitcoiners likely do ourselves a service in being able to deconstruct (its important to understand which fallacies are being employed) and rationally refute these type of “Blue Chip” attempts to obscure the truth and slander bitcoin.
Remember, FUD is the mindkiller — reject it and destroy it wherever it is found.