Crypto-mania may continue for now. Traders will be watching the charts to see how the trends develop. But the long-term investment story looks like another matter. The risks are rising.
Howard Marks, billionaire investor and founder of Oaktree Capital Management is adamant about his stance on cryptocurrencies like bitcoin, Ether and others: 'They’re not real.'
On the comparison between bitcoin and tulips, one blogger says: ‘At least with tulips, you had something tangible — a plant.’
A bearish trifecta — the Elliott wave pattern, optimistic psychology and even fundamentals in the form of blockchain bottlenecks — will lead to the collapse of today's crypto-mania.
I hate to be the curmudgeonly old man yelling at the kids to get off his lawn, but get off my damn lawn with this cryptocurrency nonsense. Bitcoin isn’t a currency, it’s not a store of value and it’s certainly not worthy of investment. Cryptocurrencies are the 2017 version of Dutch tulips, pure and simple.
I hate to be the curmudgeonly old man yelling at the kids to get off his lawn, but get off my damn lawn with this cryptocurrency nonsense. Bitcoin isn’t a currency, it’s not a store of value and it’s certainly not worthy of investment. Cryptocurrencies are the 2017 version of Dutch tulips, pure and simple.
I’ve seen enough cryptocurrency stories over the last few weeks to last me a lifetime, especially about Bitcoin. Bitcoin is not a store of value, and it’s not a reasonable investment candidate. You’ve been warned!
We now have enough information on cryptocurrencies to conclude that Bitcoin = Betamax, and Ethereum = VHS. One wins, but both soon obsolete.
The Bitcoin Investment Trust still trades at a large premium to this failed currency. . . Bitcoin, unfortunately, cannot fill that last function (store of value). To be a store of value, a currency needs to keep its value reasonably stable over time.
Cryptocurrencies, or cybercurrencies, which have been in a massive financial mania until their sudden selloff this week, have two actual applications: online gambling and money laundering. Neither is the heart of a major business model. But that’s it.
The explosion [in the price of Bitcoin] is mania. It’s people looking for a rate of return. It’s in the bubble phase. [Bitcoin] goes through this periodically… it rises several hundred percent, and then collapses. . . This revolutionary digital infrastructure will soon be able to process billions more transactions than Bitcoin ever has. It may well be a Bitcoin killer...
Bitcoin is a bubble. The Bitcoin bubble will pop. Nobody knows when it will pop, but it will. Bitcoin has no intrinsic value or utility. You can set a dollar on fire for warmth or wipe your butt with it in a pinch. Bitcoin is just pixels on a screen. If your battery dies, you are Bitcoin broke.
Fundamentally, Bitcoin has no value. . . It is important that the media get a better understanding of the cryptocurrency phenomena so more members of the public don’t get duped.
This is a global ponzi scheme and that’s the end of it. As a super-national currency, the only appropriate comparison with bitcoin is gold or other hard assets that hold their value when sovereign paper money does not. Is that going to happen with bitcoin if we reach some at which sovereign currency loses all value? Nope. It’s going to be worthless as well.
No controls, no backing and no regulations about it. . . Still, some people will buy it as an 'investment.' In my opinion, Monopoly money is safer.
This is a story the mainstream media isn't covering. And millennials aren't going to get the memo either, before it's too late. But, mark my words'This is the death of Bitcoin'
Book it. Bitcoin's finished. The New York Times, on Saturday, I think it was' April 29, anyhow, said the hacker who tried to get a ransom from Netflix over the new episodes of that show'
I used to be an avid trader years ago, and my co-founder is as hardcore of a crypto-anarchist as they come. I would love nothing more than for bitcoin to succeed, but I believe it will die a slow and painful death and something else will come along to be its successor.
Bitcoin, with all the noise and talk of large scale acquisitions, is just a playground for those wanting a quick buck and will never be part of the genuine electronic financial markets economy
The problem with a finite asset is that the economy is not finite, and if you have a limited amount of money to match this almost unlimited capacity of people in the economy to do things, money doesn't work.
Add that on top of the fact that bitcoin exchanges are prone to collapsing (as they have in the past) and you have a digital currency that is, according to the Financial Times, essentially worthless. At least it's good for entertainment.
Economist William J. Luther said he doesn't think the dollar will be challenged by the Bitcoin or any other digital currency any time soon'
So if you are 'holding' any Bitcoins (not that anyone can actually hold something so ethereal), your moment to exit and flee is rapidly approaching.
But don't let that big number fool you: this strange and controversial technology is no closer to becoming a mainstream currency. 'Bitcoin is not something the average person will ever use to buy and sell stuff, they say, particularly in the US and other Western countries. The world just doesn't need a dedicated digital currency.
As a phenomenon bitcoin has all the attributes of a pyramid scheme, requiring a constant influx of converts to push up the price, based on the promise of its use by future converts. So the ultimate value for bitcoin will be the same as all pyramid schemes: zero.
Bitcoin is a bubble that like Tulip, South Sea, Dot.com or Subprime will burst'Bitcoin was a great experiment that provided a lot of useful learning.
'I think Bitcoin has stalled out,' said Nathaniel Popper, a reporter for the New York Times who wrote a book about Bitcoin in 2014.What went wrong? The Bitcoin community has been hampered by a dysfunctional culture that has grown increasingly hostile toward experimentation. That has made it difficult for the Bitcoin network to keep up with changing market demands.
Allaire went on to say that bitcoin is likely doomed for two reasons: lack of regulations and, surprisingly, inconsistent use.
It's still a good reason not to use Bitcoin as a hedge against the expected market sell-off an electoral victory by Donald Trump would entail.There are other reasons, too.For one, Bitcoin is quickly becoming a thing of the past.
Cryptocurrencies are dead.
The best that can be said about Bitcoin right now is that it still exists.
The cryptoanarchists' revolution is over. Condolences. The victorious cryptocapitalists' advice is: Do what your parents did! Get a job, sir, at UBS,Deutshe Bank, Santander or BNY Mellon. Even JPMorgan Chase.
The deadlock between competing corners of the Bitcoin community when it comes to hard forking, in contrast, spells doom for the currency, according to Tual. 'As long as that's true, Bitcoin will never evolve, and it will die, because what doesn't evolve dies.'
Russo's glaring point remains, Bitcoin has created a class hierarchy divided by computational power. The cryptocurrency as is can not deliver on the promises of decentralization, anonymity, or full control over property. And I agree with him.
The reasons for Bitcoin's failure are many, including poor governance, a lack of technological infrastructure and infighting within its community. Besides, as I noted in my previous article, the fact that sovereign governments have the power to tax in their own currencies always made a Bitcoin takeover unlikely.
If you ask Taavet Hinrikus, CEO of international-payments app TransferWise, 'Bitcoin, I think we can say, is dead. There is no traction, no one is using bitcoin. The bitcoin experiment, I think we can say, is over.'
At this point in the bitcoin lifecycle, the fear, uncertainty and doubt (FUD) and naysaying we've been hearing is mostly true. The network is abysmally slow. The use cases are half-baked and consumers will receive no implicit benefit from bitcoin over, say, swiping their Visa card.The bitcoin 1.0 experiment is, in short, over.
The best analogy, although not perfect, for the demise of bitcoin vs. Ethereum and the other unlimited blockchain technologies being developed for commercial application is that of the experience of digital audio tapes (DATs) vs. the compact disk technology of the mid-1980s.
Bitcoin will soon be dead, claims David Yermack, chairman of the Finance Department at NYU's Stern School of Business. He blames the democratic process of decision-making in the Bitcoin community for the cryptocurrency's problems.
Bitcoins are a digital Ponzi scheme, not a digital cryptocurrency. Investors would be wise to steer clear of bitcoins and any other digital currencies.
Still, based on recent developments, a bitcoin resurgence looks like a long shot. When the final history of bitcoin is written, the currency itself is likely to be just a colorful footnote in the tale of the emergence of a powerful new blockchain technology.
The digital currency is on the 'brink of technical collapse,' he wrote, and 'as a result there's no longer much reason to think Bitcoin can actually be better than the existing financial system.
There was a time when believers in bitcoin, the virtual currency backed by math instead of any government, thought that it might one day replace cash as a relatively anonymous way to pay for everything from groceries to your morning coffee.Now, that dream might be smack dab in the midst of crashing down, a function of the currency's code playing out. At stake is nothing less than two competing visions for the future of bitcoin itself.
We know that bitcoin itself is a complete failure and shows the number one law of programming and software: that anything that can be programmed can be hacked. So nothing is completely secure.
Do not confuse Ethereum with Bitcoin. Bitcoin was never a viable blockchain platform for commerce. Ethereum is.
The Bitcoin failure does illustrate that human institutions must have politics in addition to technical expertise. Try to engineer around politics, and it will flood back in the most atavistic and unscrupulous forms.
Let's also bear in mind what it is that makes some venture capitalists Bitcoin zealots: pure greed. That is the reason clearest to me for Bitcoin's failure. Intended as a level playing field and a more efficient transaction system, the Bitcoin system has deteriorated into a fight between interested parties over a pool of money. In the beginning, Bitcoin was a noble experiment. Now, it is a distraction. It's time to build more rational, transparent, robust, accountable systems of governance to pave the way to a more prosperous future for everyone.
But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.
He also outlines some of the design flaws he sees in Bitcoin and why those flaws, which many in the Bitcoin community view as important features, will actually lead to the platform's eventual downfall.
So spare a thought for the companies scrabbling to jump off the bitcoin ship before it sinks. The currency's value has been static for months (except for a brief boom and bust in early November when it was caught up in a Chinese ponzi scheme), but perhaps more damningly still, the hype has all but disappeared.
Bitcoin is a non-thing. It will never be able to have an independent, sovereign value on its own, because it is a non-thing, just like all currencies in the world today are non-things, including the (temporarily) Almighty Dollar, which became an absolute non-thing precisely on Sunday, August 15, 1971.
Intuitively, bitcoin's shortcomings as a currency thus far would stem from issues like the absence of government backing, low interest from the broader public and high volatility. Weber approached it from a different angle, essentially saying that bitcoin cannot by printed by governments in times of need- a morally repugnant notion for many hardline Bitcoiners.
No merchant will risk accepting Bitcoin if it can't be transferred back into their own currency. Even if they could pay their grocery bill, rent, and utilities using Bitcoin, there's still the small matter of taxes. Ultimately, central banks need the authority to ease the pain of business cycles. That's why Bitcoin is no more than a Libertarian pipe dream.
This is my personal opinion, there will be no real, non-controlled currency in the world. There is no government that's going to put up with it for long ' there will be no currency that gets around government controls.
Minor, too, predicts that bitcoin as a currency 'will get destroyed.'
The main thing is that bitcoin network spends much more resources (electricity, hardware, human efforts) per transaction than current centralized systems,' Maclin wrote. 'Bitcoin exists now, because of bubble-ponzi scheme.
Fortunately, it's unlikely that Bitcoin will survive long enough to generate the environmental disaster that would arise if it became a major part of the financial system. The same design feature that requires the use of so much electricity is the fatal flaw in Bitcoin as a currency.
So, can we agree to move time, energy and brain cells away from bitcoin as an alternative currency? And to disentangle the technology of the blockchain away from it, too?
After analyzing the facts, it becomes apparent that Bitcoin is not destined to grow and mature beyond what it is today. Without a major overhaul of Bitcoin's system and values, it is na've to think that there will be widespread adoption. There are too many inherent problems and general complexities with the currency for it to gain mainstream traction.
Is Bitcoin on its death bed?That was the question posed during a Sept. 21 panel at Tech Crunch Disrupt, a conference in San Francisco, as Bitcoin proponents speculated on the digital currency's lackluster performance for venture capitalists and whether it would ever see a comeback.
Our best guess is that in the short term there will continue to bea drip-by-drip erosion of confidence as the realization grows that thesystem is compromised
In light of the above analysis, Bitcoin's power usage per transaction isn't remotely sustainable as a wholesale replacement for the conventional financial system. In the future, Bitcoin could massively gain popularity, pile on millions more transactions, and still be unsustainable due to the arms race between miners.
It's not clear what Bitcoin is or what it will be, but it is clear what it's not. It's not a currency. People don't set prices in Bitcoin and, for the most part, don't buy things with it either'. In the meantime, though, Bitcoin is still a little bit of a Ponzi'or is it a pyramid?'scheme that its libertarian early adopters are trying to cash in on.
I don't think Bitcoin is the correct technology to build these sorts of ideas on. I understand and strongly sympathize with the desire to move to decentralized systems and plan on eventually working in that space myself, but between Bitcoin's efficiency problems and poor tolerance of network partitions, I do not think it's suitable as a general purpose global decentralized database in the way people want to use it.
Bitcoin, at its core, is an attempt to solve big socioeconomic problems through technology. But so long as it remains an overwhelmingly male domain, it's going to continue to concentrate on the economic problems, while missing the big social problems. Which means that it's going to continue going nowhere.
'I'll be surprised if bitcoin is here in five years,' he said. 'It's a means to an end. The value of bitcoin isn't the currency, but the technology. I think once the world becomes more accustomed and attuned to the platform of bitcoin, the noise will go away, and the currency will go away too. The real transformation is the idea of taking all barriers down and having it be ubiquitous. Whatever currency or commodity you want to transact in, you can, and you can do it for free. That's pretty revolutionary.'
The price of Bitcoin lost most of its value since its parabolic rise and speculators have lost a lot of money. The next electronic payment technology will be very large. We eagerly await the next version of electronic money to appear.
Another multi-million dollar Bitcoin heist could be the nail in the coffin for the troubled cryptocurrency.
Nevertheless, the chances of bitcoin, the most popular of this new breed of self-clearing financial instruments, making it as a mainstream currency are now zero. Prices have been floundering at around $350 a coin for months, escalating losses for those who invested at last year's $1,200 highs. Add to this a stream of high-profile scandals over the past year, such as the collapse of Tokyo-based currency exchange Mt Gox in February, and you realise it is not a question of if but when the public loses interest in this experiment entirely.
It doesn't take a genius to realize that if a Bitcoin futures market is implemented, in the United States and Europe, the large speculators with bankrolls in the billions, will be more than happy to turn bitcoin into another crude oil-style pump-and-dump. In the case of Bitcoin, the volatility will kill any chance bitcoin ever had of becoming a medium of exchange.
Bitcoin will fail, not for fans lack of trying, but rather its status will never be more than an interesting concept championed by those in the techie or libertarian camp. Holding Bitcoin is more of a political expression rather than a sound economic investment. . . . Ultimately, Bitcoin will be relegated to the history books unless structural changes are made. It will never be fully adopted in its current form, being nothing more than a neat concept for people to lose money on.
'It's not a currency now, it's a pretend currency,' Robinson said. 'It does not qualify or satisfy the requirements for a modern currency. The problem with disruptive technologies is that the disrupted has something to say about it. I say 10 years from now we will all have digital currencies ' fiat currencies ' and bitcoin will be remembered probably much like Pogs and Sinclair's C5.'
One of the signs that Bitcoin is dying is that hardly anyone actually uses the currency. . . . The Bitcoin network is fading away and the price is destined to continue its downward march. This is likely to be the last year people take Bitcoin seriously (if last year wasn't already). Whether Bitcoin disappears with a bang or a whimper, the end is coming.
At this point, it's merely a speculative commodity, just like tulip bulbs centuries ago or even Beanie Babies more recently. . . . Bitcoin has peaked and is very unlikely to escalate significantly in value again. . . . It's basically an elaborate Ponzi scheme. . . . While I don't relish anyone losing money, Bitcoin basically went out of the way to make itself vulnerable. For this reason, it is destined to fail.
The Bitcoin is dead. Or is it? Well, not yet. But it will be very, very soon.
Even if the price of Bitcoin doesn't go to zero, the chances the Bitcoin community convincing the wider public, governments, and industry that Bitcoin really represents the future of the world's digital economy will become extremely unlikely. . . . this grand technological experiment may have run its course.
The Swiss Franc might be the currency getting all the attention, but the real blood bath is in Bitcoin. Remember how Bitcoin was supposed to change everything? And the dollar was dead? Boy, was that ever wrong. . . . Some are suggesting that the precipitous decline in the currency is probably its death knell.
Bitcoin is proving a big disappointment. . . . There's almost certainly more bad news to come. The electronic token has lots of enduring problems. As a store of value that is not subject to government intervention, it lacks the support of authorities and is always in danger of being banned. . . . Defenders of Bitcoin have not given up hope. Their emphasis has shifted though, from the currency to the underlying blockchain processing software. . . . But it will not bring up the price of Bitcoin.
Bitcoin the currency may be dying, but it doesn't matter. . . . Certainly, a trend line from November 2013 to now, extrapolated forwards, intersects worthlessness sometime later this year. . . . This could create a negative feedback loop as miners retire, the network becomes less secure and resilient, investors lose faith, and the price drops further.
Bitcoin isn't going to replace any fiat currencies as long as it feels intuitively safer for most people to keep their savings in a bank account instead of in a digital wallet. . . . This brings us to the current crisis in Bitcoin: far from widespread adoption giving it resilience and reliability, the system may be starting to fall apart. . . . These issues add up to what we're seeing now: the slow, inexorable decline in the price of a digital currency with no value beyond the trust in the system.
If Bitcoin were a currency, it'd be the worst-performing one in the world, worse even than the Russian ruble. But Bitcoin isn't a currency. It's a Ponzi scheme for redistributing wealth from one libertarian to another. . . . But in the long run, we're all dead, and Bitcoin might be too.
The virtual currency is looking increasingly beleaguered, and its price had been dropping steadily in recent months. . . . It is a reminder of the security issues that face any virtual currency seeking mainstream adoption, and it brings back memories of the infamous exchange Mt. Gox. . . . Combined with bitcoin's reputation as an enabler for criminal activity, it is likely this public-image problem is hindering mainstream adoption. As one commenter on the discussion board Hacker News remarks, bitcoin is an 'even worse' investment than gold.
Even if the price of Bitcoin doesn't go to zero, the chances the Bitcoin community convincing the wider public, governments, and industry that Bitcoin really represents the future of the world's digital economy will become extremely unlikely.
Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. . . . The coins will never be the money of the future. . . . Bitcoins are too volatile in price ever to serve as a currency. . . . bitcoins are not money; dollars are money.
We'll sign off with the simple point that unless a massive amount of new capital is transferred into Bitcoin market sharpish, which is not impossible, since there are still a number of deep pocketed believers out there ' it's hard to imagine the asset class going any other way but south. Furthermore, it's unlikely at this stage that either price rigging, mining cartels or lower energy costs will be able to reverse that trend.
It kills any chance that bitcoin could be a mainstream currency. No one wants to hold a currency that has that great a risk of depreciating in value. Most people who put money in bitcoin wallets in 2014 and didn't spend it instantly took a hit. It is dead, let me repeat, dead, as a mainstream currency.
And that Bitcoin could only survive at the margins, where it would be isolated, and in no position to threaten Visa or Mastercard, or the underlying payment and messaging services that underpin the world financial system as it stands today. Then there's The Oracle of Omaha who has one four letter word for bitcoin: joke.
Bitcoin's defects will hasten its demise in 2015 . . . Bitcoin's flaws are becoming more evident, which may explain why prices more than halved in 2014. That trend should continue.
A writer for The Washington Post argues bitcoin's system is doomed to fail because governments have a lot of say when it comes to any financial system and can put pressure on those intuitions as it sees fit.
Right now, Bitcoin is only mostly dead. As an investment, it was the worst of 2014. . . . The problem, though, is that Bitcoin will likely not survive to get to that level of innovation. Will Bitcoin enthusiasts support it after they realize it has ceased to be useful as a currency and is a terrible investment? Not likely. At some point they are going to realize that they are subsidizing Bitcoin for theoretical and emotional reasons so that it can be exploited by regulation-seeking venture capitalists. When that happens Bitcoin will shift from being mostly dead to being all dead.
But Bitcoin is doomed as a payments network ' the very point at which it looks as though it is likely to be widely deployed is the point at which governments, like that of the United States, will crack down on it.
But Bitcoin is doomed as a payments network. . . . But if I had to put money on it? I'd say Bitcoin is doomed in the medium-term future.
Bitcoin's collapse comes as governments around the world consider regulating or prohibiting the virtual currency to prevent criminals from using it to trade contraband. . . . Ripple has gained 36 percent this year; eventually it could displace bitcoin, Reinelt said.
Now I dare say our message is a disappointment to Bitcoiners. I share that disappointment: it would have been great if Bitcoin could displace government money. However, Bitcoin is an experiment, most experiments fail ' and Bitcoin is another failed experiment.
And so the whole bitcoin system eventually becomes a house of cards, and anything ' a scandal, a government attack, whatever ' could trigger a loss of confidence leading to a run that brings it all down. . . . There will be a stampede for the exit, the price of bitcoin will drop to its intrinsic value ' zero ' and the system will collapse. The only question is when.
Bitcoin is not [the future]. It is a step along the way and will eventually disintegrate. . . . As a currency [Bitcoin] is almost negligible against anything. It can't stand toe-to-toe with the Cuban Peso. . . . With Bitcoin the pretend currency, what you see is not what you get.
With only about 13 million Bitcoins in circulation and the final number capped at 21 million, the supply is too limited for them to serve as a viable currency. . . . There will always be a place for Bitcoin and its ilk somewhere in the bowels of the Internet, but the cryptocurrency will never challenge the dollar as a medium of exchange.
We need to consider the distinct possibility that Bitcoin is dying. A star gone supernova. Something will be there for a while, but it will never be what it could have been. . . . The big players didn't get in, and now they won't. Nobody wants to bet on a loser, which Bitcoin has been over the past few months, unequivocally.
We're going to stick our neck out at this stage and call this the end of Bitcoin. . . . We're sure we may still see a few deep pocketed VCs or 'believers' throw more money at defending the dream, but chances are we've now gone through the exponential break point. Time and money would probably be better spent trying to pump up Bitcoin V.2.
Unfortunately, bitcoin is doomed to fail, it appears as though Bitcoin is not as secure as once thought. Just a few weeks ago, it was announced that Mt. Gox, once one of the largest global Bitcoin exchanges, went bankrupt.
In general, [Gina] Sanchez sees no reason for investors to trade their dollars for Bitcoin. 'Bitcoin as a currency doesn't make any sense,' she says.
This combination of encryption, mining, and decentralized verification makes Bitcoin potentially powerful and difficult to control, but governments do have tools at their disposal that could make it all but impossible for Bitcoin to become widely adopted. . . . And so Bitcoin may very well die.
Bitcoin is not a currency. . . . There's nothing that Bitcoin allows anyone to do that they can't already do in the regular banking system.
Neither Satoshi Nakamoto nor Bitcoin ever stood any chance of operating outside the bounds of conventional society. There will be regulation, there will be consumer protection, there will be rules and taxes, and criminal prosecutions for those who break the law. Bitcoin isn't cyberpunk fantasy and it isn't a Thomas Pynchon novel. It's dull. The thrill is gone. And that's why people are so mad.
Opinions are still divided, but the evidence that Bitcoin is doomed to failure piles up almost every day. . . . Of course, we Bitcoin doomsayers have been waiting for the bubble to pop for some time now. We also tend to think that every new drop is a sign of it's impending doom. . . . Anyone still willing to bet a Bitcoin on the future of Bitcoin?
All of which is why I'm convinced that while bitcoin (or something like it) is likely to hang around as a niche commodity for certain kinds of gray- and black-market transactions, Mt. Gox pretty much assures that the average consumer will never use it. Because there is no way for you to ever ensure that your bitcoins are completely safe. . . . The speculators may not realize it yet, but you can stick a fork in bitcoin. It's done.
Bottom line: Bitcoin's days are numbered. Literally. Williams predicts that Bitcoin 'will trade for under $10_ by June 30, 2014. A bold prediction, no doubt. But the point is clear ' Bitcoin doesn't stand a chance at ever gaining widespread adoption.
Bitcoin's market cap on paper by far exceeds that of the competition, but the ability to translate Bitcoin wealth to wealth in other forms is very limited. There are many Bitcoin holders heavily invested in Bitcoin's success and it has a first mover advantage. However as a store of value, its only value is reputational, and recent developments have shaken that reputation.
But does this one significant report of Bitcoin failure mean that the virtual currency is doomed to failure? I am no Bitcoin expert but I do know that any given currency is rooted in belief, which is then supported by faith in the issuing entity. Therefore, once the belief or faith is gone, the currency is gone. Thus far, in the opinion of your humble author, Bitcoin is nothing more than illusion.
Bitcoin does not yet have enough users to continue its survival. . . . it will go the way of laser discs and eight-track tapes.
'It is a bubble, there is no question about it'. It's just an amazing example of a bubble.'He added that he's 'amazed by how people are so excited about it' and that he tells his students that 'No, it's not such a great idea.'
After a year of volatile price swings, the data is finally available and obvious enough that the concept of the Bitcoin as a currency is finally starting to fade. . . . the fatal flaw of the Bitcoin is that it is intentionally deflationary.
The part where you run in to trouble is getting governments to accept tax revenue as Bitcoin, because it undermines the national currency, making monetary policy irrelevant. And why would a country do that exactly? Why would they surrender the ability to heal their economy? Sorry to all the believers, but it's a Libertarian pipe dream that makes absolutely no sense.
Bitcoin is the wrong answer to a good question: what can be done to make the monetary system less crazy? . . . Bitcoin is not over yet. But the pseudo-currency is close enough to collapse to merit an early retrospective. . . . Bitcoin is neither a relatable store of value nor a helpful unit of account.
Sorry, but Bitcoin isn't the future. If anything, it's a throwback to an earlier era. . . . Anyone who thinks that Bitcoin will triumph has to believe that it will succeed where earlier generations of private currencies failed ' that Bitcoin will, improbably, manage to overthrow more than century's worth of accumulated state power, jealously guarded and ruthlessly enforced. That's a preposterous fantasy ' and a dangerous one, if you're an investor.
Bitcoin is not a legitimate currency but simply a risky virtual commodity bet. . . . Bitcoin lacks the essential attributes that are needed to support a widely recognized transactional currency. If Bitcoin was allowed to proliferate as a currency it would produce greater economic uncertainty, reduced trade and lower individual standard of living.
The developers of bitcoin are trying to show that money can be successfully privatized. They will fail, because money that is not issued by governments is always doomed to failure. . . . Bitcoin, or something like it, will thrive until the authorities do better.
And, in the greater scheme of things, bitcoin is small: even at a roughly 10 billion dollar market capitalization it is almost irrelevant in financial terms. This is probably roughly the peak market capitalization achieved by Beanie Babies in 1999. There are indeed important and valuable ideas that exist in bitcoin's design. But bitcoin itself? I believe its volatility and built-in irreversibility will doom it to the ash-heap of history.
The federal reserve comes out with their own version of the bitcoin, let's call it the 'USDcoin', they make a .001 (or some other arbitrary number) USDc the equivalent of $1 and they make it very easy to use. You can have these deposited into your existing bank account and they are immediately converted to dollars and when you send dollars out of your account they are immediately converted to USDc. Then the government also implements anti-bitcoin laws that make using bitcoin difficult or impossible to use. Of course they will claim bitcoin was being used for illegal purposes and money laundering. This will be the end of bitcoin.
But make no mistake, Bitcoin is not the currency of the future. It has no intrinsic value. . . . Bitcoin? Nada. There's nothing keeping it being a thing. . . . Again, Bitcoin might go up a lot more before it ultimately ends. That's the nature of bubbles. The dotcom bubble crashed a bunch of times on its way up. Then one day it ended. The same will happen with this.
In theory, bitcoin could become a lawful virtual currency if the bitcoin community gave up anonymity and therefore incorporated the identities of bitcoin senders and receivers as part of the currency. But that would eliminate the cash-like feature that makes bitcoin attractive and vastly decrease the demand for bitcoin. That does not seem like a viable path forward. . . . While I praise the sheer ingenuity of bitcoin and its payments innovation, it should be buried.
Yes. It's not anonymous, it's not free, it's not instant, and it's not convenient. It's extremely difficult to make money on it, mining is useless, and it's literally impossible that it will ever go into widespread use. Unless you have an ideological stake in the concept of Bitcoin (or want to buy drugs and/or child porn), there is literally no reason to get involved in it.
In this blog post, you'll learn exactly what bitcoin is, and why I personally am pretty sure it's doomed to fail. . . . I'm willing to go on record for saying that bitcoin will crash. I'm pretty sure about it. It's human nature. But here's what I don't know ' I don't know when it will crash.
All of which is to say that doing anything legally with bitcoins ' and especially converting them into fiat currencies ' is going to get harder and more expensive as governments involve themselves. So hard and so expensive, I'd argue, that any advantages the crypto-currency may have over normal means of exchange, like credit cards, will soon disappear.
The problem, as I see it, is that bitcoin only value is it's medium of exchange, without any real effort. It is ripe for fraud and manipulation, but what fiat monetary system isn't. The automatic systems of growth to a finite number of units along with the division into smaller increments are intended to eliminate the problems of past monetary failures but cannot control human nature. As the medium of exchange and perceived value increases, hording will occur.
Bitcoin's path to the grave has always been fairly clear to me. . . . You can't seize a Bitcoin like you can seize a dollar, since it's simply an alphanumeric string. But people need to be able to get their money in and out of the Bitcoin economy in order for it to be a useful alternative. With Mt. Gox and other Bitcoin go-betweens having such a hard time staying afloat, it probably won't be long before even some Bitcoin diehards consider packing it in.
Everyone agrees that Bitcoin is an amazing proof of concept from a technical standpoint, and has succeeded in raising much awareness for the current flaws of the monetary system. But does Bitcoin really address these flaws? More and more prominent economists and net activists say no.
Ultimately, it's greed ' not a genuine interest in a fundamentally stronger alternative to the status quo ' that's driving Bitcoin prices. So forget Bitcoin being a contender as an alternative currency. At best, it's a speculative investment.
Bitcoin will fail because it has no fundamentals beyond the news cycleMost currencies will fluctuate in value against other currencies based on a number of known factors.
At the height of its popularity, Bitcoin was trumpeted as a viable alternative currency for the internet age, a monetary system engineered to prevent theft, gaming, and criminalization. Then came the malware, the black market, the legal ambiguities and The Man. Today, you can''t even use it to buy Facebook stock.
Beyond the most hardcore users, skepticism has only increased. Nobel Prize-winning economist Paul Krugman wrote that the currency's tendency to fluctuate has encouraged hoarding. Stefan Brands, a former ecash consultant and digital currency pioneer, calls bitcoin 'clever' and is loath to bash it but believes it's fundamentally structured like 'a pyramid scheme' that rewards early adopters.
There's no denying the rise of Bitcoin has been as amusing as it has been interesting. A quasi-anonymous, internet-spawned currency that shoots up to a price of $US32 is captivating. But the honeymoon is over and Bitcoin is falling. Fast.
Although I think that Bitcoin is ingenious and fascinating in many ways, I don't'believe that it'will succeed as a currency. The problem is that a Bitcoin is unlikely to ever be a good store of value (a primary function of any widely accepted'currency) because the (eventually)'fixed money supply will'cause the purchasing power of a Bitcoin to be extremely volatile.
True, Bitcoin does still offer anonymity: but then so do copper sheets to cowrie shells via butter, salt, gold, silver and even pieces of paper with Dead Presidents on them.It's difficult to see what the currency has going for it.
Bitcoin is not a viable currency. It is a store of speculative value much like investing in stamps, comic books and vintage shoes.
Like the gold standard, a successful bitcoin would send our economy back into the dark ages.
Negative feedback loops like this are basically homeostasis. In nature, positive feedback loops like exist with Bitcoin are lethal; the only thing that's even kept Bitcoin alive this long is its novelty. Either it will remain a novelty forever or it will transition from novelty status to dead faster than you can blink.