One Christ follower looks at Bitcoin and crypto currencies

bitcoin cryptocurrencies

Nothing written below should be construed as investment advice or recommendation. Do your own homework and due diligence. This post is not a splinter of a fraction of a fragment of the available information. Disclosure: At the time of this writing, the author has small holdings in nine crypto currencies.

Near the end of 2017 Bitcoin leapt into the collective American media consciousness, not to mention not a few non-media types. To be fair, many articles have been written since Santoshi Nakamoto published Bitcoin: A Peer-to-Peer Electronic Cash System in 2008, including many speculating on who Nakamoto actually is. Bitcoin, which enthralled gamers and fans of alternative economies, was lately featured in major news outlets (Reuters, Business Insider, NYT, The Economist) as well as tech and science sites (Wired, Tech Crunch, Popular Science).

And why not? Bitcoin is both digital (stored at “addresses” of numbers and letters as in the below image) and financial (it can pay for both goods and services, and be exchanged for many global currencies). While “bitcoins” exist, they do not exist in they way quarters, loonies, or Eisenhower silver dollars exist. You can put them in a wallet, but not a pocket, and even the wallet may exist only online.

Warning: This purports to be an actual bitcoin address. If you send bitcoins to it I doubt they’ll be returned.

Depending on who you read, Bitcoin is either a hoax, a bubble, another round of “tulip mania,” or the future of money. Semi-officially, Bitcoin (the crypto-currency granddaddy) is “a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself.”

(I’ve chosen to use “crypto currency” though it is alternatively written “cryptocurrency” and “crypto-currency.”)

The Blockchain

You cannot fully understand crypto currencies (the family of digital money within which Bitcoin, according to some, falls) without knowing about the blockchain. Writing at Cryptoeconomics, Chris Berg, Sinclair Davidson and Jason Potts provide the simplest of definitions:

The blockchain is a digital, decentralised, distributed ledger.

Admittedly boring, but critically important, ledgers confirm ownership, confirm identity, confirm status, and confirm authority. Thus, they say, “At their most fundamental level, ledgers map economic and social relationships.” (The linked article is lengthy and worthy of several readings.)

No less an authority than Harvard Business Review, in a 2017 article, says blockchains are here to stay.

The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically.

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

The authors conclude: “Blockchain could slash the cost of transactions and reshape the economy.”

Call it the next iteration of the global economy, built on the Internet.

From Coindesk, on the power of one specific blockchain implementation:

Already, there are distinct innovations emerging across what can best be described as the emerging investment management chain.

Protocols are being built that allow you to:

Bring data securely to the blockchain (e.g. Oraclize); exchange assets in a secure, peer-to-peer way (decentralized or hybrid exchanges like 0x, Kyber, Oasisdex, etc); issue all sorts of digital assets on-chain (protocol tokens, ETFs, regulated equities, derivatives, etc); set up and regulate your investment funds.

IBM, Royal-Dutch Shell, Advanced Micro Devices, BP, BBVA, and Nvidia are among companies developing blockchain applications.

Bitcoin and Other Crypto Currencies

The problem some have with the idea of digital currencies is they do not seem real. Why trade in a good ole American five-spot for a string of numbers and letters? Mark Leftovic explains:

[C]rypto-currencies are based upon mathematics, zero-trust, open-source, and consensus.

The US dollar is back by the “full faith and credit” of the United States government (and the press room at the Fed), while cryptos are backed by math. Everyone choose your dance partner now.

But, we may add, cryptos have a value determined by the marketplace. Goldman Sachs economists Dominic Wilson and José Ursua argue

that Bitcoin and other digital currencies lie somewhere on the boundary between currency, commodity and financial asset. Our best definition would be that it is currently a speculative financial asset that can be used as a medium of exchange.

If you have ever watched a crypto currency exchange or traded your Litecoin for dollars, you understand cryptos have value.

It is worth noting that “real” money is becoming less real all the time. Salaries were once paid in physical bills and coins. Over time, those physical bills and coins were exchanged for a single piece of paper called a check. That check was worth nothing apart from its representation of the physical bills and coins. In recent years workers have the option for their salary to be directed deposited, foregoing the need for any physical monetary token. We access that stored “money” (in reality just a number on a ledger) with debit cards that subtract from the number in my account and add to the number merchant’s account. No physical money changes hands. Even the vending machines in my office take debit cards, ie, digital money.

Cryptos take the idea of digital money one step further: no physical representation of the money exists because none needs to exist. (Images like the one at the top are not spendable coins. They are merely the symbols used to identify Ethereum and Bitcoin on exchanges.)

Scott Rosenberg’s WIRED article is helpful.

Can “real” items be purchased with crypto currencies?

Yes, wherever the merchant or trading partner accepts Bitcoin (or other crypto currency) as payment. In September 2017, an Austin, Texas house brokered through Kuper Sotheby’s International Realty was purchased entirely using Bitcoin. In December 2017, two homes sold in England in Bitcoin-only transactions. One of the owners intends to rent the home in Bitcoin.

Gift cards can be purchased with Bitcoin, as can items at Square’s Cash app is trial-ballooning Bitcoin purchases. Also, Expedia, Dish Network, Microsoft (some items), and many more. There are even Bitcoin ATMs worldwide. Coinmap has thousands of listings.

Though some believe Bitcoin/cryptos to be commodities or assets (the government of Israel calls cryptos “assets,” Joe Carter calls Bitcoin “commodity money,”). However, Ripple, Lightning Network, and other developments will make cryptos as easy to spend as the bills in your pocket. Maybe easier.

Is Bitcoin the only one?

No. There are literally hundreds if not thousands of crypto currencies. Many of them function more like shares of stock than currency, and many are—currently—only good for trading for other cryptos. Recently, the global market capitalization of all crypto currencies briefly passed $900Billion. Less than half of that was Bitcoin. It’s still the big gorilla in the room, but the other gorillas are gaining weight. (Mitch Steves, an analyst at the Royal Bank of Canada, sees a $10Trillion global crypto/blockchain market coming.)

[Edit: Tim Duren notes the barrier for creating a coin is very low, and the failure rate, like that of all start-ups, is very high. Tracking of ICOs—Initial Coin Offerings—can be done at]


There are real dangers with investing in crypto currencies, even the Big Three: Bitcoin, Ethereum, and Litecoin. Many exchanges are not regulated at all (relying solely on the trust of their users), some have been hacked, others closed by their governments, and some simply vanished taking deposited currency with them.

If you find a solid exchange and start investing, be forewarned the crypto currency investing is extremely volatile. Some coins or tokens can swing wildly in a single 24-hour period.

A few people may have made quick thousands last fall, but I expect most of them had been in Bitcoin for a long time before the run-up. Many latecomers will buy high, sell low, suck up their losses, and move on.

Recently, a large tracker, Coin Market Cap, removed without warning a number of South Korean exchanges, claiming they were inflating prices. That sent the global crypto market into a slide from which it has yet to recover.

Isn’t Bitcoin just a way for pornographers and drug dealers to make money?

Here’s a newsflash: pornographers and drug dealers make money every day using cash. Has anyone ever suggested you should have a $20 in your wallet because Hugh Hefner had a $50 in his or Pablo Escobar had $100s in his? Of course not.

It is true that the cryptographically protected nature of crypto currencies is something n’er-do-wells find beneficial. I assume drug lords find Cadillac Escalades beneficial, too. But the technology is here and need not be written-off to criminals. Bitcoin, like a Chick-Fil-A vanilla shake, is available for purchase, and Bitcoin (and other crypto currencies), like cash and digitized money, will be available for anyone to use who chooses to use them.

Christian Investors and Crypto Currencies

Should a Christian be involved in buying, selling, trading, or investing in crypto currencies? At the core, the question being asked is, “Should a Christian invest in anything that does not guarantee 100% safety?” The answer is, “We cannot help but do so because there are no guarantees in this life.”

Every time a farmer puts seed in the ground, he or she risks a crop failure and loss of investment.

Every time a worker puts money in the pension fund (back in the day), he or she risked that the company would stay around until they retired, that the fund was being well managed, that the fund’s investments were dependable, and the like. Even pension funds are not guaranteed.

Every time Joe Christian invests in a money market fund, buys stock in his favorite company, or buys 300 boxes of TOPPS baseball cards, he risks losing money.

Every time you invest in Lehman Brothers you…oh, yeah.

If you had put $100,000 in a safety deposit box in 1970 and took it out today, it would have far less buying power than when you put it in. That is, the “safety deposit box” would have provided no safety against the fallen value of your “investment.” Even storing cash—what could be safer?—comes with risks.

(Doesn’t Matthew chapter 25 in the Bible have a story about a guy who invested by merely sticking his money in the bank to only draw interest?)

The fact remains, though, that blockchain, Bitcoin, and crypto currencies are very new. But, while Miracle Max may have been saying “mostly dead” for a while, it does not look like they are going anywhere. As is true with any new opportunity, do not invest in cryptos without a lot of research, do not invest money you need tomorrow or next week, do not invest in a way that resembles gambling (if your “investment” strategy amounts to, “Put it all on black”), do not invest money you or your family needs, do not invest money you should be giving to your church or charity.

I will not make cryptos the bulks of my investment strategy, but, for the foreseeable future they will remain a part of it.

Ultimately, followers of Jesus will give an account for every idle word and every idle expense. The power to get wealth should not lead to the idolization of it. In the Old Testament of the Bible, Proverbs 28:20 warns against trying get rich quick. The love of money is condemned, but shrewdness (even that which leads to riches) is commended.

As long as we invest with open hands, are honest and ethical, and are willing to give generously from increase God sends our way, a multitude of investment opportunities are open to followers of Jesus.

For your further reading:

What Bitcoin Isn’t: A Ponzi, Unbacked, Tulipmania, FEE

Cryptocurrencies have an everything problem, Tech Crunch

How Bitcoin Compares to Fiat Currency’s House of Cards, Bitcoin Magazine

A Legal Renaissance, Blockchain Style, Coindesk

What happens when governments get into cryptocurrency, Mashable

Blockchain for the rest of us, Tradecraft

Marty Duren

Just a guy writing some things.