Bitcoin is a fraud conceived and executed successfully by the Silicon valley nerds. Forget about the mania aspects of it, the underlying technology as it stands today is not sustainable economically.
Bitcoin was supposed to eliminate the middleman (banks, brokers etc) which would lead to zero or near zero transaction fees.
- BIG LIE - Current transaction fees for bitcoin ranges from $12-$20. It could go higher with higher mining costs
Bitcoin could be used as a currency to buy products and services.
- As it stands today, it is practically of no use w.r.t to buying any goods or services, given the ridiculous transaction costs
Bitcoin is a store of value
- Yes, only until the last of the fools realize they are the bagholders.
Bitcoin mining a.k.a proof of work is one fo the most inefficient technologies out there. This was a technology used to prevent denial of service attacks. Somehow the bitcoin nerds convinced the world that it could be used in blockchain. At the current rate of bitcoin growth, it's projected by 2020 all energy produced in the world would be used just by the bitcoin miners. This is just for bitcoin ! Imagine if we have a host of other apps based on blockchain technologies, using the current mining concept, it would mean the end of the road for this technology. We just don't have the required energy on this planet to support it.
Now how did these incredibly smart nerds not realize this ? Did they not know that eventually there would be more miners and there would be increase in computing power of the miners, which would lead to more complexity in the puzzles that the miners solve, which would lead to exponential energy needs ? Besides, in the mining world, the winner gets it all. So all the mining done by the rest of miners go waste. What an incredible energy-wasteful technology congame this is ? Well, it's not that the creators did not foresee this or not know this. High Technology has become a con game of exits. Create something which most common folks do not understand, create a buzz around it, market it and exit before the crowd realizes. If you successfully do that, before the rest of the world emulates you, you are considered a winner, even if the technology or the enterprise go bust after you exit. That's what happened with dot com in 2000. More than 5000 companies closed in just the SF bay area alone. It's all about exits !. Sometimes, they cannot exit fast enough, they get trapped in their own making - like the CDOs during the mortgage bubble. Sometimes, they start believing in their own delusions.
Now confronted by this big question, Ethereum folks are talking about moving to a different mining scheme based on something more geeky "Proof of stake". This is an unproven technology and there's no consensus among the technology folks as to whether it's secure when it comes to double spending, maintaining the mutability/integrity of blockchain. "Proof of stake" also casts doubts on the whole decentralized appeal of the technology. So they really do not have an economically viable solution at this point for achieving distributed consensus. But they are promising that this is the future and will disrupt the financial industry the way we know it. Really ? Without a solution on hand ? And raise billions of money on a economically non-viable protocol ?
Don't get me wrong. There are some great stuff happening in technology - big data, ioT, Nanotech, Quantum computing, Deep learning, Driverless cars, AI et al.
But this blockchain seems like a big fraud at this point. Yes, we could come up with some viable solutions in the future or NOT. We could move to an entirely different paradigm. But would you lend me billions based on a promise of something that could happen in the future for which there is no viable solution in present ? Yes, as long as the system is flooded with money, you would.
This is my last rant on bitcoin. Now, enjoy the bubble while it lasts.
Edited by NAV, 19 December 2017 - 11:46 PM.