Distributed Ledgers Part I: Bitcoin is dead
finiculture.com
finiculture.com
He then goes to find anything that is, or seems to be an issue about it.
He then makes a list of them. He then claims it's dead.
So, what can kill bitcoin? The only thing that can kill bitcoin is a technological advancement that makes its security weak or vulnerable.
Bitcoin is huge to many industries:
1. Extortion, Ponzi Schemes, Gambling, Lottery.
2. Drugs, Weapons, Terrorism, Out-lawed organisations (donations).
3. Tax Evasion, Money Laundering, Moving Capital Overseas.
Given these huge industries (or illegal fields, doesn't matter). Annexed industries can emerge
1. Bitcoin banks, exchanges, and derivative financial services.
2. Bitcoin mining.
3. Bitcoin consulting and development services.
And that assuming Bitcoin is not good for your day-to-day legal services, is unstable, and has lots of technical challenges to overcome.
Zerocoin is those things.
Bitcoin vs Bitcoin XT bull$$$$ is a major example. Will BTC actually be able to evolve this relatively minor technical challenge?
As Bitcoin vs Bitcoin XT has shown us, it is the BTC Community that needs to evolve, not BTC protocol itself.
The opinions of the teenagers on r/bitcoin don't matter much, as very few of them are either: coders, miners, or even users.
Is bitcoin really huge to those industries? Or are those the biggest industries using bitcoin? A quick search pulls a stat that worldwide gambling revenue is ~350b - is bitcoin really even 1% of that? The US illegal drug market is $151b/year - bitcoin is what percentage of that?
I'm not weighing in on whether bitcoin is flawed or what will happen to it, but the idea that bitcoin is having a meaningful impact on these massive industries at this stage is a little silly.
It just takes time until people (or criminals) learn and adopt the technology.
Bitcoin is money without the middleman or bank, which is a huge advance in the fight against centralization and elitism which is arguably one of humanity's biggest challenges.
So you painted it in an immoral light, when in fact it is a great moral cause.
BTC obscures the middlemen. It doesn't remove them.
Calling them middlemen couldn't be more wrongheaded.
Its like calling farmers "middlemen" because after all the sun / seeds ultimately grow the plant.
In the United States, the Depository Trust Clearing Corporation, which settles the vast majority of security transfers, could be completely replaced with technologies like Bitcoin.
The DTCC has always had issues with naked short selling and very few financiers will shed a tear when it is dead and gone.
Tracking ownership and settling transfers in an open and transparent manner is also something that is sorely lacking in the realm of copyright. The music industry has taken notice of Bitcoin's technology and publishers and authors alike are excited about the possibilities of using what works out to be an equal-access public datastore to track ownership and payments. The money has never been in running the regulated machinery of ASCAP, Harry Fox or SoundExchange, rather in investing, owning and capitalizing from the profits of authored works.
The same applies to Wall St. There's a rotten core at the center of modern finance and using decentralized consensus mechanisms like Bitcoin is in everyone's best interest. This is why so many established financial institutions are making such a fuss about this technology.
If by "bitcoin" you mean "cryptocurrencies" then yeah, security is the only real killer. But the thing that's most likely to kill Bitcoin is a better cryptocurrency.
The article's laundry list includes some real issues. Mining really is horrendously inefficient. Confirmation time really does make BTC infeasible for many kinds of transactions. And deflation really will cause problems, if it's not doing so already.
How much energy is needed to be burned? Precisely as much as is needed to combat 'spam' (both in the form of speculation and block-space consumption).
The only 'alternative' that has been pitched is the ironically named Proof of Stake. PoS has many, many problems (Andrew Poelstra itemizes many of them) not least of which is that they will degenerate into Work-based attacks/mining-strategies.
Thus far, miners have been reluctant to switch to an alternate chain. It is probably a very tall claim that this will ever happen at this point. SMTP was/is a terrible protocol, but the advantages of the network effect sustained its success. This effect is particularly pronounced in Bitcoin, mostly due to the way that blockchains work. The longest chain will almost always secure the most 'faith'.
When a miner Finds a valid hash for a block, they prove that they've consumed a certain amount of electricity in a way they everyone can easily verify. In order for someone to perform a 51% attack, they have to use more electricity than everyone else, which is probably more expensive than just participating honestly. The security of the network is proportional to the amount of money it costs to attack it.
Mining is therefore neither wasteful nor inefficient, if it is understood that the goal is to have a decentralized, censorship-free currency that disincentivizes attacks.
Balnaphone, why did you post this article? What is special about it?
His dismissal of being able to use the Bitcoin blockchain in a 100% secure manner for digital assets is completely unfounded and the network remains incredibly resilient and secure. No one would continue to be using the currency unless it retained these properties. Without any hard evidence to the contrary, this authors opinions are unworthy of discussion.
The purest metric for Bitcoins decline can be found in the hundreds of spiteful, insulting, censoring, excluding conversations that are replacing the hope and optimistic tinkering that started it all.