I can't even load the site due to some issue with their Cert, but based on the headline it's the latter. Bitcoin as a currency is hugely problematic, while as an asset its inherent deflationary nature makes it surprisingly safe as an investment, assuming you have plenty of time to wait out the enormous volatility of the system.
Sure it's basically a giant pyramid scheme, but since everyone is incentivized so strongly to keep holding and not selling it has remained remarkably stable as far as pyramid schemes go.
I don't think it is inherently better than any other pyramid schemes like the dollars. The only difference between the two in terms of long term holding is in the latter you are forced to.
Yea, exactly—you kind of answered your own question: I'm mortal. So like Bitcoin, there is a finite amount they will increase. That makes it a great investment opportunity, right?
The problem is that it's not trivial to distinguish between your bitnails and all the other altnails, so you have a massive counterfeiting problem the moment any real value gets attached to your bitnails.
It's hard to securely transfer your toenail clippings over the internet, meaning they have no advantages over fiat currency.
If you could somehow create a new technology that would allow your specific toenail clippings to be easily transferred over the internet (or could give your toenail clippings some other substantive advantage as a currency over traditional fiat currency) they would likely become very valuable very quickly.
I liked the idea of bitcoin for a while but I think it's pure garbage now. Not only because the blockchain technology has evolved a lot and you can make better networks with it, but because it's being used only to make very few people very rich.
There are others DLT (Distributed Ledger Technologies) far more advanced, with real life use cases and without that monstruosity called Proof of Work.
I forgot to add that using it as an asset is not the best idea. It has some nice features that makes it look good as a long term investment but it's heavily manipulated by big whales, mostly with Tether.
* "Sound money" groups have one set of wishes of what will happen to the US Dollar
* Some parts of the population want money printing to pay for services.
* WallStreet likes money printing US Dollars to bail them out.
* Everyone has an agenda for US Dollars.
Here is what happens to bitcoin:
* Bitcoin (and Ethereum) were given a historic strategic value by the US Gov because they get grand fathered in that they are not required to have KYC & AML. Future crypto tokens will, and they will be held back.
* Bitcoin is where citizens can turn to, when money printing doesn't match their agenda. What is amazing, is that they don't need to get approval from the full citizen base. This is great for citizens that are hurt by money printing.
Right now, it is for speculation for investors. But the investors are investing towards more usage as a currency in the future.
Why would you spend or invest a currency that magically goes up whenever there is demand for it?
The hard money aspect of Bitcoin and most other cryptocurrencies guarantees that they will be speculation devices that will behave like iterative Ponzi-like games of chance (even if they were not explicitly intended as such). Any increase in their use as currencies will drive their value up which will paradoxically discourage their use as a currency, leading to boom-bust cycles. These will be quite extreme as Bitcoin and its ilk are much more deflationary than precious metals or other traditional commodity monies. They are not only absolutely finite but are subject to breakage (permanent loss) due to lost secret keys.
This is why the entire world rejected hard asset money and fiat money pegged to hard assets. It's bad for the actual economy where actual economy is defined as actually doing things in the real world. Money is a means to an end not an end in itself.
Because what you're saying is some dreamland example everyone always repeats like a scratched disc.
Why would you buy a CPU today when you know next year it will be at least 1/2 price or twice more performant?
Why buy a new phone today when tomorrow it will be cheaper?
Why marry a woman/guy today when you know tomorrow there will be a younger and better looking person out there?
Thats what you're saying. It doesn't hold true. I want something TODAY, not tomorrow, or next week. So if i had some gold or bitcoin, i would exchange some of it for the thing i want.
Lastly, some of the bitcoin-USD payment processors saw the largest volumes DURING the bubble of Dec 2017. What that means is as people got richer they started buying goods with their highly appreciated bitcoin.
I used to subscribe to the pop Austrian hard money ideology. Watching cryptocurrency devolve into a HODL cult and gambling casino is one of the things that changed my mind. I saw by watching the evolution of Bitcoin that Keynes was right, at least about that particular topic. Everything Keynesian and modern monetary theorists said would happen happened, and for easy to understand reasons. In science we call that a correct prediction.
What I saw in 2017 was a giant bubble driven by the greater fool theory followed by a complete abandonment of cryptocurrency as a payment method. This abandonment actually coincides with the bubble as this boom-bust cycle made it very inconvenient to use as a currency.
All this accomplished was to make early adopters rich at the expense of later adopters, like any Ponzi. (Again I don't think it was an intentional scam, but unfolded as a Ponzi for structural reasons.) Today I am hard pressed to find anyone who accepts Bitcoin for anything but drugs and black/grey market stuff, and those people have a special need that overcomes the currency's downsides as such.
Today the cryptocurrency world seems like nothing but scams and even those are fading away. Most articles I see about it are scammy.
Bitcoin is very unlike gold. Gold costs little to nothing to maintain while BTC has a huge electricity cost. That must be slowly consuming the actual value in the ecosystem. Eventually nothing will be left but Tethers and other fictional tokens. When those collapse the music will be over.
> This is why the entire world rejected hard asset money and fiat money pegged to hard assets.
The world did not reject it, governments did. Consumers overwhelmingly prefer money backed by hard assets. The switch made it possible to exert more control over monetary policy.
The Bitcoin experiment is more about consumers wresting that control back from government.
As a consumer, I for one hope the value of the dollar falls (slowly of course).
Housing is grotesquely overpriced. There is no way to reduce the cost of assets like real estate in nominal terms without mountains of pain. Housing can't go down without leaving recent purchasers underwater and triggering a banking crisis. The most orderly way for house prices to be made sane again would be for the value of the dollar to fall until a $500k starter home is "reasonable" in real value terms. Everyone gets a 1.5X-2X raise, a loaf of bread is $10, gas is $12/gallon, and now magically $500k for a starter house/condo is reasonable.
Inflation is an ugly solution to an even uglier set of problems that revolve around the inelasticity of pricing and the blind spots of human psychology. It's almost impossible for the price of assets or wages to fall in an orderly fashion. The resistance is both structural and psychological. Market pricing mechanisms can't work if prices can't move in both directions. Inflation allows prices to fall and debt to be written down in a more silent less painful way. It's a hack to allow prices of all things to move in both directions and thus for market pricing signals to work.
We may not need this hack if we were perfectly rational. A perfectly rational employee would understand if you cut their wages in nominal terms but explained that the value of the currency had increased. A perfectly rational bank would write down the value of underwater home loans to avoid a debt crisis. People do not behave like this. Banks will refuse to write down loan values unless other banks do (game theory), guaranteeing a disorderly debt crisis rather than an orderly haircut. People will always feel like they got a pay cut if number go down regardless of purchasing power.
I pick on real estate, wages, and loans because they are probably the least elastic in terms of nominal price. For those number must always go up (or at least stay the same) or really bad things happen. Other things are still at least somewhat subject to the same forces to varying degrees.
The US Dollar money supply increased 500% in 5 years ($800b in 2008 to $3.6 Trillion in 2013) [Monetary base]. That is a lot of "money printing" (including digitally expanding the money supply).
There will come a time when the fact that Bitcoin won't EVER "print money" or expand the money supply is a HUGE value.
You say the currency supply "fluctuates". In the future, with 500% increases in US Dollar, the US Dollar can greatly drop in value. Over time, the fact that people know bitcoin can't expand the money supply is VERY VERY powerful.
> There will come a time when the fact that Bitcoin won't EVER "print money" or expand the money supply is a HUGE value.
The huge value is simply in Bitcoin being disinflationary.
That is, yearly inflation converging to 0. Whether it's 0% or 0.01% or 0.1% doesn't matter that much. What matters is that, unlike fiat, it goes down predictably.
> Bitcoin (and Ethereum) were given a historic strategic value by the US Gov because they get grand fathered in that they are not required to have KYC & AML.
Could you elaborate on this (e.g. what law or decision are you referring to?) I tried searching for more info and only found another comment of yours[1]
When people launch tokens (new cryptocurrencies) today, they need to be KYC and AML compatible. KYC and AML add so much friction, it destroys usage. It blocks it from working on some parts of the planet. (Small third world countries don't all of the FinCen-like organizations that exist across the US and Europe)
The SEC sues people who launch tokens without KYC and AML these days. The SEC is having a hard time finding Satoshi.
Here is where SEC has grandfathered in ETH and BTC specifically:
> The SEC has declared that Ethereum and its digital coin ether, are not securities today, during the Yahoo Finance summit.
https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not...
Equivocating over the technical definition of "money" won't obscure the plain fact that it's been out for a decade and you can't buy stuff with it.
More generally, the whole point of BTC was supposed to be that it would be free of external control. Now, everyone seems resigned to the fact that the only way to scale it is off-chain ledgers run by financial corporations. Doesn't seem to be much more to say about it.
If you're going to reference the rules, you might put more effort into articulating the nuances rather than stating it as an absolute, as what you stated is clearly false.
Bob: "That's technically false! The truth is you mostly can't buy stuff with it."
Whatever; the point stands. Separate from that, you might put some thought in to why the HN guidelines say "Please respond to the strongest plausible interpretation" instead of "Please try to phrase your comments so carefully that there is only one possible interpretation."
This is, frankly, ridiculously dismissive, and you violated both guidelines.
If you've never heard of Bitpay, I'd suggest looking it up.
I can purchase software on Microsoft's store, hardware on Newegg, a phone line from AT&T, whatever from Overstock, I can travel via Expedia among other travel brokers, I mean seriously...
"You can't buy stuff with it" has no obvious interpretation. Did you mean specifically in some part of the world? Specifically from Amazon or Target?
I phrased it vaguely because I meant it that way. Is there one specific thing keeping Bitcoin from being widely used? No, there are a bunch of challenges. Why do you think I should've listed them? Don't you pretty much know what they are? Is it not safe to assume that the other people this deep in a HN thread on the subject do too?
Sure, I should've said, "...enough stuff" or "...easily enough" or some other minimizing qualifier, to keep uncharitable readers from mentally inserting a maximizing one. (I would've edited it in, but the edit button was already gone) But I also don't think anyone involved had any genuine trouble figuring out that it was implied. I mean, it's common enough to merit its own bullet point on the HN Guidelines list.
Outliers exist, but in practice it can't be used to buy much. I can't use it to pay medical bills, tuition, insurance, cell phone, daycare, car payment, taxes, uber or pretty much anything besides a few online services or beer in a very small selection of local bars.
I really think you should do more research into your viewpoint. There is a significant ecosystem supported by crypto that makes these copy pasta statements very much outdated.
I would highly recommend Felix Martin’s “Money: The Unauthorized Biography” to anyone who is interested in the underlying subject of money.
Martin’s basic argument is that money is simply a social technology.
I don’t believe that bitcoin is the internet’s native “money” but I do believe it is the internet’s native “gold.” I believe future currencies (as some currently do) will peg their value to Bitcoin. However, once the first major corporation begins accepting bitcoin then it just might as well be what we classically view as “money”.
For now, you can't do much with Bitcoin besides buying drugs and paying ransoms. But people expect it to become more important in the future, and that's the main reason why they buy Bitcoin.
So, it is like 99% speculation and 1% "internet money", a big part of that 1% is for illegal activity.
The main reason its only for illegal activities right now is because (for almost every case) it provides no advantage over using a credit card.
The biggest problem is the user now owns liability. With a credit card, if someone steals your card you can call up the provider and get the charges reversed. Without a centralized authority, if something goes wrong with your bitcoin account your out of luck.
Other than that, its somewhat inconvenient to get your hands on it. BTC exchanges feel a little shady. And it's not as private as you'd think. All of your transactions are public.
On the plus side, you don't need a credit card provider to bless your business, so sketchy or illegal businesses are free to transact online now. And lastly, it's decoupled from any one government. But that's not a benefit unless you live in a volatile region.
True, and cash is used for any activity at a scale that dwarfs Bitcoin. It makes sense to compare their ratio of illegal to all transactions in this case.
Bitcoin is massively used as a remittance infrastructure tool by Venezuelans. See this report be Venezuelan citizen: https://stephanlivera.com/episode/143/
Bitcoin is terrible for transacting (slow, expensive, traceable), but I think its use case will be to provide a store of value, hence the "digital gold" description.
Monero is closer to Internet's native money imo, and that doesn't seem to have nearly the drastic swings that BTC has had in the last few months.
That being said, use case for store of value is difficult since whales can manipulate the price so easily.
It is blazing fast in practice. Most merchants accept 0-conf transactions once they propagate p2p. Some merchants already implemented Lightning Network. Together, that means about 2-20 seconds for vast majority of payments.
It is not expensive. Currently fees are in cents per on-chain transaction. And basically 0 for Lightning Network payments.
It is traceable though and that is indeed a big issue going forward. Again, Lightning Network helps to some extent but much more is needed.
None of the items in "Bitcoin’s Advantages Over Traditional Money" are without significant caveats:
> Bitcoin’s supply is limited to 21 million coins...
Until it's not. There are already discussions at the highest levels of the Bitcoin community to raise the cap[0].
Also what are forks and new coins if not new currency in circulation? The supply of "bitcoin" doubled when BCH forked. The supply doubled again when BSV forked.
> Low and predictable inflation rate.
See caveats above. Also the inflation rate has appeared to have 0 impact on the price of BTC so far, so it doesn't appear to be a meaningful metric. Payments for goods and services using BTC are almost always denominated in fiat with BTC being used as the medium of exchange (eg a seller wants $50 for some pills but accepts payment in $50 worth of BTC). BTC's inflation rate is meaningless in this scenario.
> Lack of a central authority. This makes Bitcoin resistant to censorship and voluntary manipulation of its parameters.
This is arguably somewhat true. However, there are very few meaningfully sized Bitcoin miners, and it's not unreasonable to assume a single miner may have or be able to have >51% of the hashrate if they desired. The core development team is also fairly small with a relatively small number of people and organizations controlling what ships.
As for censorship: exchanges censor bitcoin addresses and manipulate (eg lose, socialize losses) balances all the time. As long as bitcoin is beholden to fiat for its value, it's far from censorship proof.
> Low transaction costs and acceptable processing speed.
"acceptable processing speed" is laughable from a retail transaction perspective.
"Low transaction cost" is arguably somewhat true, but there's also times of fee volatility as well as a times of high risk if you don't pay enough fees to get processed quickly. Resubmitting transactions with higher fees is possible but complex and imperfect.
> Security and irreversibility of transactions
"Security of transactions" is arguably true in the technical sense that the PKI protecting a transaction is so far unbreakable. However that's just one attack vector: it's untrue and meaningless for the vast majority of financial attack vectors. Sure double spends are exceptionally hard, but theft is rampant, loss due to technical error/bugs is common, and then irreversibility is a liability not an advantage.
Bitcoin value is in it's potential to become a savings technology(store of value, digital gold, hard money) on the internet.
Decentralisation is a spectrum, expensive and slow is intentional in it's design to provide the highest level of security and trustlesness. If you want fast and cheap transactions then blockchain is not the answer.
If Bitcoin goes mainstream, layer 0 will be used for large value transactions. Rest will be moved off chain to custodial wallets and on probably a much smaller scale lightning, liquid and ethereum. Compared to fiat, transparency and opting out of centralized systems are easier.
The real question is not whether Bitcoin is a good SoV but if Austrian economics and sound money are a better alternative to our present economic system[1].
Either way, I believe Bitcoin might become the safe-haven asset that people could fall back on in times of inflation[2].
I think the following arguments against Bitcoin are not useful.
65 comments
[ 11.3 ms ] story [ 1466 ms ] threadSure it's basically a giant pyramid scheme, but since everyone is incentivized so strongly to keep holding and not selling it has remained remarkably stable as far as pyramid schemes go.
My toenail clippings have an inherently deflationary nature. Yet, nobody's knocking down my door to collect them. What gives?
how can they be deflationary (unless you're dead, or don't have toes) when they're growing 24/7?
The problem is that it's not trivial to distinguish between your bitnails and all the other altnails, so you have a massive counterfeiting problem the moment any real value gets attached to your bitnails.
(So, no, I won't be investing.)
If you could somehow create a new technology that would allow your specific toenail clippings to be easily transferred over the internet (or could give your toenail clippings some other substantive advantage as a currency over traditional fiat currency) they would likely become very valuable very quickly.
There are others DLT (Distributed Ledger Technologies) far more advanced, with real life use cases and without that monstruosity called Proof of Work.
Sad but true.
* "Sound money" groups have one set of wishes of what will happen to the US Dollar
* Some parts of the population want money printing to pay for services.
* WallStreet likes money printing US Dollars to bail them out.
* Everyone has an agenda for US Dollars.
Here is what happens to bitcoin:
* Bitcoin (and Ethereum) were given a historic strategic value by the US Gov because they get grand fathered in that they are not required to have KYC & AML. Future crypto tokens will, and they will be held back.
* Bitcoin is where citizens can turn to, when money printing doesn't match their agenda. What is amazing, is that they don't need to get approval from the full citizen base. This is great for citizens that are hurt by money printing.
Right now, it is for speculation for investors. But the investors are investing towards more usage as a currency in the future.
The hard money aspect of Bitcoin and most other cryptocurrencies guarantees that they will be speculation devices that will behave like iterative Ponzi-like games of chance (even if they were not explicitly intended as such). Any increase in their use as currencies will drive their value up which will paradoxically discourage their use as a currency, leading to boom-bust cycles. These will be quite extreme as Bitcoin and its ilk are much more deflationary than precious metals or other traditional commodity monies. They are not only absolutely finite but are subject to breakage (permanent loss) due to lost secret keys.
This is why the entire world rejected hard asset money and fiat money pegged to hard assets. It's bad for the actual economy where actual economy is defined as actually doing things in the real world. Money is a means to an end not an end in itself.
Why would you buy a CPU today when you know next year it will be at least 1/2 price or twice more performant?
Why buy a new phone today when tomorrow it will be cheaper?
Why marry a woman/guy today when you know tomorrow there will be a younger and better looking person out there?
Thats what you're saying. It doesn't hold true. I want something TODAY, not tomorrow, or next week. So if i had some gold or bitcoin, i would exchange some of it for the thing i want.
Lastly, some of the bitcoin-USD payment processors saw the largest volumes DURING the bubble of Dec 2017. What that means is as people got richer they started buying goods with their highly appreciated bitcoin.
What I saw in 2017 was a giant bubble driven by the greater fool theory followed by a complete abandonment of cryptocurrency as a payment method. This abandonment actually coincides with the bubble as this boom-bust cycle made it very inconvenient to use as a currency.
All this accomplished was to make early adopters rich at the expense of later adopters, like any Ponzi. (Again I don't think it was an intentional scam, but unfolded as a Ponzi for structural reasons.) Today I am hard pressed to find anyone who accepts Bitcoin for anything but drugs and black/grey market stuff, and those people have a special need that overcomes the currency's downsides as such.
Today the cryptocurrency world seems like nothing but scams and even those are fading away. Most articles I see about it are scammy.
Bitcoin is very unlike gold. Gold costs little to nothing to maintain while BTC has a huge electricity cost. That must be slowly consuming the actual value in the ecosystem. Eventually nothing will be left but Tethers and other fictional tokens. When those collapse the music will be over.
And if prices are falling, they delay harder. My family has not purchased solar panels because the price keeps dropping!
The world did not reject it, governments did. Consumers overwhelmingly prefer money backed by hard assets. The switch made it possible to exert more control over monetary policy.
The Bitcoin experiment is more about consumers wresting that control back from government.
Housing is grotesquely overpriced. There is no way to reduce the cost of assets like real estate in nominal terms without mountains of pain. Housing can't go down without leaving recent purchasers underwater and triggering a banking crisis. The most orderly way for house prices to be made sane again would be for the value of the dollar to fall until a $500k starter home is "reasonable" in real value terms. Everyone gets a 1.5X-2X raise, a loaf of bread is $10, gas is $12/gallon, and now magically $500k for a starter house/condo is reasonable.
Inflation is an ugly solution to an even uglier set of problems that revolve around the inelasticity of pricing and the blind spots of human psychology. It's almost impossible for the price of assets or wages to fall in an orderly fashion. The resistance is both structural and psychological. Market pricing mechanisms can't work if prices can't move in both directions. Inflation allows prices to fall and debt to be written down in a more silent less painful way. It's a hack to allow prices of all things to move in both directions and thus for market pricing signals to work.
We may not need this hack if we were perfectly rational. A perfectly rational employee would understand if you cut their wages in nominal terms but explained that the value of the currency had increased. A perfectly rational bank would write down the value of underwater home loans to avoid a debt crisis. People do not behave like this. Banks will refuse to write down loan values unless other banks do (game theory), guaranteeing a disorderly debt crisis rather than an orderly haircut. People will always feel like they got a pay cut if number go down regardless of purchasing power.
I pick on real estate, wages, and loans because they are probably the least elastic in terms of nominal price. For those number must always go up (or at least stay the same) or really bad things happen. Other things are still at least somewhat subject to the same forces to varying degrees.
There will come a time when the fact that Bitcoin won't EVER "print money" or expand the money supply is a HUGE value.
You say the currency supply "fluctuates". In the future, with 500% increases in US Dollar, the US Dollar can greatly drop in value. Over time, the fact that people know bitcoin can't expand the money supply is VERY VERY powerful.
The huge value is simply in Bitcoin being disinflationary.
That is, yearly inflation converging to 0. Whether it's 0% or 0.01% or 0.1% doesn't matter that much. What matters is that, unlike fiat, it goes down predictably.
Could you elaborate on this (e.g. what law or decision are you referring to?) I tried searching for more info and only found another comment of yours[1]
1:https://news.ycombinator.com/item?id=21032259
Here is where SEC has grandfathered in ETH and BTC specifically: > The SEC has declared that Ethereum and its digital coin ether, are not securities today, during the Yahoo Finance summit. https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not...
Blockchain as a technology isn't, although distributed ledgering isn't just blockchain. But Bitcoin is a pyramid scheme.
In fact, you won't even find "invest" word on the website.
There is zero promise, nor even implied, about future value.
More generally, the whole point of BTC was supposed to be that it would be free of external control. Now, everyone seems resigned to the fact that the only way to scale it is off-chain ledgers run by financial corporations. Doesn't seem to be much more to say about it.
Take that for what it’s worth, but yeah, you’re wrong.
Bob: "That's technically false! The truth is you mostly can't buy stuff with it."
Whatever; the point stands. Separate from that, you might put some thought in to why the HN guidelines say "Please respond to the strongest plausible interpretation" instead of "Please try to phrase your comments so carefully that there is only one possible interpretation."
If you've never heard of Bitpay, I'd suggest looking it up.
I can purchase software on Microsoft's store, hardware on Newegg, a phone line from AT&T, whatever from Overstock, I can travel via Expedia among other travel brokers, I mean seriously...
"You can't buy stuff with it" has no obvious interpretation. Did you mean specifically in some part of the world? Specifically from Amazon or Target?
Sure, I should've said, "...enough stuff" or "...easily enough" or some other minimizing qualifier, to keep uncharitable readers from mentally inserting a maximizing one. (I would've edited it in, but the edit button was already gone) But I also don't think anyone involved had any genuine trouble figuring out that it was implied. I mean, it's common enough to merit its own bullet point on the HN Guidelines list.
* bills
* amazon purchases
* some art bought online from a small dealer
* grocery store purchases
* local restaurant purchases
* some plane tickets, hotel reservations
* some hobby purchases
* some pet supplies
I'm pretty sure zero of these businesses let me pay in bitcoin.
Martin’s basic argument is that money is simply a social technology.
I don’t believe that bitcoin is the internet’s native “money” but I do believe it is the internet’s native “gold.” I believe future currencies (as some currently do) will peg their value to Bitcoin. However, once the first major corporation begins accepting bitcoin then it just might as well be what we classically view as “money”.
https://www.amazon.com/Money-Unauthorized-Biography-Coinage-...
So, it is like 99% speculation and 1% "internet money", a big part of that 1% is for illegal activity.
The biggest problem is the user now owns liability. With a credit card, if someone steals your card you can call up the provider and get the charges reversed. Without a centralized authority, if something goes wrong with your bitcoin account your out of luck.
Other than that, its somewhat inconvenient to get your hands on it. BTC exchanges feel a little shady. And it's not as private as you'd think. All of your transactions are public.
On the plus side, you don't need a credit card provider to bless your business, so sketchy or illegal businesses are free to transact online now. And lastly, it's decoupled from any one government. But that's not a benefit unless you live in a volatile region.
Monero is closer to Internet's native money imo, and that doesn't seem to have nearly the drastic swings that BTC has had in the last few months.
That being said, use case for store of value is difficult since whales can manipulate the price so easily.
Look at Stellar. Transactions take <5 seconds and the chain is kind to the environment with trust based transactions rather than POW.
It is not expensive. Currently fees are in cents per on-chain transaction. And basically 0 for Lightning Network payments.
It is traceable though and that is indeed a big issue going forward. Again, Lightning Network helps to some extent but much more is needed.
I also hope that P=NP.
> Bitcoin’s supply is limited to 21 million coins...
Until it's not. There are already discussions at the highest levels of the Bitcoin community to raise the cap[0].
Also what are forks and new coins if not new currency in circulation? The supply of "bitcoin" doubled when BCH forked. The supply doubled again when BSV forked.
> Low and predictable inflation rate.
See caveats above. Also the inflation rate has appeared to have 0 impact on the price of BTC so far, so it doesn't appear to be a meaningful metric. Payments for goods and services using BTC are almost always denominated in fiat with BTC being used as the medium of exchange (eg a seller wants $50 for some pills but accepts payment in $50 worth of BTC). BTC's inflation rate is meaningless in this scenario.
> Lack of a central authority. This makes Bitcoin resistant to censorship and voluntary manipulation of its parameters.
This is arguably somewhat true. However, there are very few meaningfully sized Bitcoin miners, and it's not unreasonable to assume a single miner may have or be able to have >51% of the hashrate if they desired. The core development team is also fairly small with a relatively small number of people and organizations controlling what ships.
As for censorship: exchanges censor bitcoin addresses and manipulate (eg lose, socialize losses) balances all the time. As long as bitcoin is beholden to fiat for its value, it's far from censorship proof.
> Low transaction costs and acceptable processing speed.
"acceptable processing speed" is laughable from a retail transaction perspective.
"Low transaction cost" is arguably somewhat true, but there's also times of fee volatility as well as a times of high risk if you don't pay enough fees to get processed quickly. Resubmitting transactions with higher fees is possible but complex and imperfect.
> Security and irreversibility of transactions
"Security of transactions" is arguably true in the technical sense that the PKI protecting a transaction is so far unbreakable. However that's just one attack vector: it's untrue and meaningless for the vast majority of financial attack vectors. Sure double spends are exceptionally hard, but theft is rampant, loss due to technical error/bugs is common, and then irreversibility is a liability not an advantage.
[0] https://twitter.com/mhluongo/status/1092559017178734594
Decentralisation is a spectrum, expensive and slow is intentional in it's design to provide the highest level of security and trustlesness. If you want fast and cheap transactions then blockchain is not the answer.
If Bitcoin goes mainstream, layer 0 will be used for large value transactions. Rest will be moved off chain to custodial wallets and on probably a much smaller scale lightning, liquid and ethereum. Compared to fiat, transparency and opting out of centralized systems are easier.
The real question is not whether Bitcoin is a good SoV but if Austrian economics and sound money are a better alternative to our present economic system[1].
Either way, I believe Bitcoin might become the safe-haven asset that people could fall back on in times of inflation[2].
I think the following arguments against Bitcoin are not useful.
- X blockchain is faster than bitcoin.
- PoW is wasteful.
- Bitcoin is used for drugs so cannot be money.
- Whales can manipulate the price.
[1] http://econfaculty.gmu.edu/bcaplan/whyaust.htm
[2] https://news.bitcoin.com/countries-suffering-from-rapid-infl...