Thinking about investing in Bitcoin? Don't (2018)
theguardian.com
theguardian.com
What would it take to get you to read the bitcoin white paper and comprehend that bitcoin was not created as an investment vehicle but as an electronic cash system. So Wall Street is speculation on bitcoin. What did you expect?
Bitcoin is as useful at $100 dollars as it is at $1 million. Why then are we fixated on price when this technology can change millions of lives? Let's talk about the many awesome things we can do by coding trust into a decentralized Internet. Price is just a footnote.
I've read the white paper and the Ethereum yellow paper - the technology is undeniably fascinating and cool, and I have some hope for proof-of-stake systems curbing the current waste, but in their present form they're almost useless as a monetary / payment system, and the only thing I really see happening in the crypto space is various get-rich-quick schemes based around issuing probably-worthless tokens of data, and a million and one ways to convert them amongst each other.
Not sure if the volatility thing will be solved, it's still people bidding at the value of intrinsically meaningless bits of data. But maybe more genuine utility, i.e. a payment solution better/cheaper than cash / credit / brokerages, would help justify the valuation. Ethereum's decentralized computation model might find more actually-beneficial-to-the-world applications if the tx costs weren't so painful.
Private keys are dangerously powerful for the average person, i.e. lose or have them stolen and you've lost your money forever. But that's a feature too, you can "open an account" in the few milliseconds it takes for your computer to generate a keypair.
Combustion engines are dangerous and frankly beyond the comprehension of the average person, but cars put such a heavy layer of abstraction on top of them that anyone can get a ton of utility from the combustion engine.
Software and smart contracts like key escrow services will solve this problem I bet.
Volatility, I don't agree with. Look at DAI, it's completely decentralized and has done a great job pegging to the dollar. With DAI you can participate in DeFi / smart contracts without ETH volatility.
At this point though, and really for the last 3-4 years or so, it’s fairly useless as a currency and it’s an environmental nightmare.
That's a great argument, but for BCH (or any other altcoins without a speculation problem) instead of BTC. There's virtually no technical differences between the bitcoin family of cryptocurrencies. That implies that there's no artificial limit on supply of coins, either. Just fork or spin up a new blockchain if there's ever a real supply crunch for cryptocurrency in general.
The BTC mining pools could trivially mount a >50% attack on BCH or any of the other alt-coins, but it's apparently not even worth it for the lulz. All the more reason to use them as simple currencies if that's the case. Any fiat currency issuer would be overjoyed with a 0% interest in counterfeiting.
I agree and this is the argument that I haven’t heard a good response to. If Bitcoin has value and utility, why shouldn’t a second chain, with the same parameters, have roughly equal value and utility?
Gold is on the periodic table of elements. You can’t make another gold.
The value in bitcoin comes from the boatloads of people trusting it enough to use in one form or another. If you spin up a bitcoin fork you'll need a lot of work to get people to believe in your fork.
Sure, but the trust transfers a lot easier than to some completely different cryptocurrency because the only meaningful difference is which protocol the miners and clients accept and which block hash is the root. People trust that bitcoin has value because not many people are going to switch to a new client that e.g. accepts 10^20 bitcoin rewards to miners per block; it's in too few people's self-interest. Or, more specifically, if a group of people do want to issue 10^20 coins every block then the bitcoin protocol serves as a coordination method for them to do that with each other.
Being on the first blockchain has only sentimental and inertial value.
That's why I refer to it as a speculative bubble; everyone is betting on how much other art appreciators will pay for artsy bitcoins in the nebulous future.
It's also only moderately explanatory; the original BTC client doesn't work on the current network any more, either. So what does BTC have that BCH doesn't? They share a root block.
You can’t just spin up another Bitcoin blockchain and expect to have the ecosystem move that chain without sacrificing their hash power on another chain when they’re deeply invested in the original $1 trillion (and growing) chain.
That’s like suggesting Apple move to a copy of the NASDAQ exchange.
Isn't bitcoin nowadays a big pump-and-dump scheme where a hand full of collosal industrial players manipulate the market at will?
Tesla, Square and Micro Strategy aren’t investing billions of dollars in a pump and dump scheme…
or as useless, on the other extreme.
One can clone the bitcoin repo but it would be far easier to attack the network than it would be to attack the bitcoin network.
Does this mean bitcoin is worth $50k? Not to me. But there is a definitely a high value to a chain with bitcoin level of security.
Hm..
If you bought BTC when this article came out you'd be up 250%
no, of course not.
all of this is fueled on speculation, and picking arbitrary date ranges and prices on speculation as a basis for comparison outside of relative speculative performance is not super useful - as recent events have shown, things can move quickly based on purely market- and popularity based events.