Meltem Demirors is on the record as the crypto insider who responded to the call of explaining the difference between Bitcoin, the world’s original, most popular and largest cryptocurrency by market cap, and ‘shitcoins’ – for Congress.
‘Shitcoin’ is a pejorative term that refers to a cryptocurrency that is worthless or is on the road to worthlessness.
The chief strategy officer at London-based digital asset management firm CoinShares, Demirors testified before the U.S. House Committee on Financial Services today during a hearing to probe Facebook’s controversial Libra project.
Congressman Warren Davidson asked Demirors to give a definition for the term “shitcoin” which is widely used by people in the cryptoshere – from economist Nouriel Roubini to Bitcoin maximalists who use the term to disparage other coins, to people who dismiss cryptocurrencies, including Bitcoin, as useless garbage.
Addressing Demirors, Davidson asked,
“A lot of people in this space will use a phrase that you may be familiar with. There’s Bitcoin and then there’s ’shitcoin’. Are you familiar with that phrase and what people may mean by that?”
Demirors responded,
“I think the idea here is Bitcoin has had a long track record. The network has been operating for 10 years. The Bitcoin network has been tested. The decentralized nature of the Bitcoin protocol has been tested. People have tried to co-opt control of Bitcoin source code and push it in certain directions that benefit their business models, and this network, and this protocol and its open-source governance have withstood that test.
It is robust. It has been tested, and it has had the benefit, frankly, of spending its first five years in its nascency, operating in this environment of innovation and not having a lot of regulatory attention.”
Davidson pointed out that Bitcoin is not controlled by a central authority that could potentially manipulate Bitcoin by diluting its value or filtering transactions. He also highlighted its ability to allow users to make peer-to-peer transactions, like cash, and to enable developers to create digital wallets to store their assets.
Concludes Davidson,
“All these features are different than many of the things that people call, colloquially, shitcoin because the value can be distorted…”
While Demirors has tweeted about shitcoins and shitcoining in the past, perhaps the most colorful references have come from Roubini.
As Congress debates the value and validity of Libra, some politicians are drawing the line between the decentralized cryptocurrency Bitcoin and other digital currencies that operate under the auspices of tech giants and corporate enterprises, praising the former.
Says House Minority Leader Kevin McCarthy,
“I like Bitcoin… Blockchain gives you a great deal and amount of security.”