You've probably heard of Bitcoin. It's the form of virtual currency – basically digital money that has actual worth – that's got tons of people, including a slew of celebrities, excited: A once-broke 50 Cent recently found out he was a Bitcoin millionaire after sales from his 2014 album Animal Ambition (for which he accepted Bitcoin as payment) dramatically increased in value; a few days before the Grammys, Katy Perry shared an Insta snap of her nails painted with the Bitcoin logo; even Ashton Kutcher and Paris Hilton have vocalized their support of Bitcoin or other forms of cryptocurrency.
So why, then, did Facebook announce a new policy on Tuesday prohibiting ads that promote "financial products and services that are frequently associated with misleading or deceptive promotional practices," including Bitcoin? And why are cryptocurrency enthusiasts happy about that ban?
Cosmopolitan spoke with cryptocurrency expert James Altucher about the recent removal of Bitcoin Facebook ads and why cryptocurrency should be on your radar.
People love Bitcoin, because it solves a lot of the problems paper currency currently has.
"Every form of currency that's ever existed was created to solve the problems of the currency beforehand. Paper currency, which we use now, solves the problems of using gold as currency, because you can’t buy a house with a truck load of gold bars. You buy it with regular dollars from your bank. Just like paper currency solves the problems of gold, cryptocurrency and Bitcoin solve the many problems of paper currency.
Bitcoin is one of many cryptocurrencies and, unfortunately, some are scams. But the ones that are legitimate have incredibly valuable software and solve incredibly important problems caused by paper currency like privacy or human error or credit card company hacks. With Bitcoin, there's no bank involvement necessary. Which means no possibility for your bank account to get hacked in any way or for someone to steal your credit card number. Has someone ever broken into your PayPal account? Bitcoin solves that problem."
And it has enormous opportunity for growth.
"Think of Bitcoin like the Internet in 1994. There was a sense, back then, like oh the Internet solves a lot of problems, we’ll see what happens. Fast forward almost 25 years and everyone in the world uses it. Cryptocurrency is the same. We're just at the beginning – Starbucks is looking into using it and UPS is looking into using it to track their logistics – and there's enormous opportunity for growth.
But anytime there's a new financial innovation, charlatans and scammers and criminals get involved. There’s a lot of fraudulent things happening in the cryptocurrency space currently. But it solves so many problems that it will be great when there’s widespread usage. Right now, companies and governments want to make sure that the riffraff is out of the space so that the masses can trust it.
I think we’re going to eventually see big retailers like Amazon accept Bitcoin as valid currency. I think eventually we’re going to see a country adopt a cryptocurrency as their currency. I think we’re going to see more and more Fortune 500 companies adopt the technology of Bitcoin in their own internal systems. Then suddenly, there’s going to be a lot more opportunities in cryptocurrencies."
Which is why the Facebook ban prohibiting Bitcoin advertisements is actually a good thing.
"Facebook is definitely helping Bitcoin rather than hurting it. It's a very smart idea to clamp down on all the potential illegitimate things happening in the cryptocurrency space — the sooner, the better. This will improve the trust of the masses on cryptocurrencies and eventually pave the way for widespread usage when people understand that the companies and characters they’re dealing with are trustworthy.
The ban won't have any immediate impact on the average person, whether you have Bitcoin or not. It does have an effect on people who are selling products in the cryptocurrency space. The masses should stay focused on how the Facebook ban will result in Bitcoin getting more and more trustworthy. Just like the Internet in the '90s, if you'd ignored its growth, there would have been enormous missed opportunity."
50 Cent got lucky getting Bitcoin early. But, really, anyone can get into Bitcoin now.
'I'm not giving investment advice here. But if you want to buy any amount of Bitcoin, there are exchange sites and various ways you can pay with a debit card or by linking up your bank account. And you can buy $10 worth of Bitcoin or more."
This interview has been lightly edited and condensed.