On BK’s TV this morning, Andrew Ross Sorkin asked Prince Alwaleed about Bitcoin and the response was predictable. Prince Alwaleed called Bitcoin “Enron in the making”. While this makes for a great headline it is just fundamentally wrong. This quote indicated that Prince Alwaleed does not understand Bitcoin at all.
Let BK explain..wait there is no time…let BK sum up…
Bitcoin is an internet protocol in the same catergory as the other protocols that allow me to send you this email today. The more well known internet protocols are:
Simple Mail Transfer Protocol (SMTP) – this dictates how emails are sent over the internet
Transmission Control Protocol/Internet Protocol (TCP/IP) – this dictates how data is transferred over the internet
Hypertext Transfer Protocol (HTTP) – this dictates how we access websites
and now we have:
Bitcoin Protocol (BTC) – this dictates how value is sent over the internet; this has been the missing protocol
For Prince Alwaleed (and others- I’m talkin’ to you Jaimie) to call Bitcoin a fraud or “Enron in the making” is like saying,
“Internet is Enron in the making and internet is fraud.”
It just doesnt make sense and shows a fundamantel misunderstanding. Of course since bitcoin automates many of the functions that JP Morgan and Citibank do today, BK understands why those at the center of the current financial system think that the gods must be crazy.