I think the South Sea Company or tulip mania are good analogies.
The fundamentals of how it works can be changed. It is true that entrenched actors may dig in their heels and prevent it from changing, and so some other more fast moving cryptocurrency may take over. An alternative is a hard fork. I think it's possible that a hard fork that has figured out the "right way" will do better than a fresh cryptocurrency doing the right thing but from scratch, because by hard forking you don't have to convince everyone to bootstrap. I accept it may equally go the other way; we'll have to wait and see.
> Transactions cost too much, take too long, and require too much proof of work.
Let's see what the lightning network brings.
As for requiring too much proof of work, I think that's a fallacy. You're looking at it backwards. "Much" proof of work isn't required; that miners compete by providing it is a consequence of the current value of the block reward and transaction fees. Relatively little hash power is actually required to maintain the network. The reason the current hash rate is so high is because hash rate follows price rather than the other way round. The high value of the mining rewards has attracted many miners. In the future, when the block reward becomes zero and the lightning network has relieved congestion on the main blockchain, traders (actually probably just parties seeking clearing) won't have to bid against each other so hard in fees to get their transactions confirmed. Then transaction fees will drop, so the reward for finding the next block will also drop, unprofitable miners will leave, and so will the hash rate.
So: 1) transactions cost too much and take too long is currently true but if the lightning network effort succeeds then this will no longer be a problem; and 2) too much proof of work is not actually "required".
I agree. I did say that :)
The underlying _why_ for these "first movers" fail are not related at all since it's a totally different vertical.
The deflation and high transaction fees seem to favor btc bc miners wouldn't shift to somthing less profitable and those using btc as a value store profit from deflation long term.
I have faith in the overall Bitcoin architecture. Its greatest threat is a malicious actor taking over enough processing power to alter the blockchain.
I doubt that Bitcoin itself will be the dominant cryptocurrency due to the reasons I mentioned in my original post. These are two different issues and I appreciate your pointing that out.
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