Bitcoin is Basically Worthless - Odd Nugget


I've learned a lot since I first took an interest in Bitcoin back in 2016.

I bought, I spent, I gained, I lost...

Ultimately, I made money. But, the most precious things I acquired were patience and perspective.

With patience, I profited. With perspective, I pieced together the reality of Bitcoin and most (if not all) speculative asset bubbles.

Bitcoin circling the drain

After 5 years of lessons learned, I'm here to tell you - Bitcoin is absolutely devoid of value.

It's worthless, but people will keep paying for it.

The reasons for such behavior are both complex and saddeningly simple. Yet, they are the same reasons for all bubbles in human economic history - namely, greed, fear and forgetfulness.

Have Fun Staying Poor

have fun staying poor bitcoin haters

The only people charging into the Bitcoin sphere of influence (read: manipulation station backed by bottomless greed) are those with very short memory and those who know exactly what's happening/believe they can profit from it before the wheels come off.

To the weary whose reservations are made public, they retort "have fun staying poor" with a side of "LOSER!" thrown in for good measure.

should have bought bitcoin

It's a jolly time to be had by all while the music's playing, but many of us have seen this song and dance before...

The pump precedes the dump.

Blockchain Tech May be the Future...

blockchain trains are the future

But Bitcoin most assuredly is not.

There, I said it. Bitcoin will never amount to anything more than it is now - a speculative asset that rises and falls to the tune of millions of mindless hypesters.

Everyone is seeking refuge from the impending collapse of the Western empire and all asset classes are game. Bitcoin has gotten caught up in all the madness and many are "banking" on its longterm success. (See what I did there? HAHAHAHAHAHA... Oh, shut up.)

Unfortunately, although blockchain technology has its place as a likely backing for the so-called 'Internet of Money', Bitcoin very clearly does not. This is entirely due to it failing on EVERY possible level.

fails abound in buildings and bitcoin

Common use cases for the world's first cryptocurrency include, well, being a currency, storing value and banking the unbanked.

It's a real shame that it does not one of the above things particularly well.

Bitcoin is Slow as Balls

slowpoke bitcoin transaction

Bitcoin can never be used as a real currency because it's too slow. WAY too slow. And no, the 'lightning network' is not a real solution. You can't build a complex, functioning system on top of a simpler system that already doesn't work.

Not only is Bitcoin too slow, it actually gets noticeably slower with use and adoption. Anyone who has followed the technology over the last 5 years knows this to be true. In mid-2017, a single transfer took over 24 hours. I experienced that little sweetheart myself.

But wait, there's more!

Bitcoin is Expensive as Balls

solid gold bitcoins

No, I'm not referring to the price of a single Bitcoin. We all know it's pretty overpriced, but it can be quartered down to the 8th decimal point, so who cares, right? Stack sats, loser! Right? Wrong.

The expense I'm referring to is another thing those who have followed the coin's progress over the years know all too well.

Every single transaction has a price.

This is inevitable and understandably necessary. However, with adoption and widespread use, Bitcoin's transaction fees go up, not down.

At its height, near the end of 2017, Bitcoin was burdening regular users with transaction fees in the $50 range. Yep, that's a $50 fee to send any amount of Bitcoin from one address to another. This has everything to do with Bitcoin mining incentives.

Suffice to say, Bitcoin's mining protocol is not well-suited to large swaths of real-live users, um, USING Bitcoin for, well, anything at all.

Since 2017, the transaction fee issues have been improved somewhat, though.

Now it only costs $10 or more to send funds to another address. Obviously, that does not work for ANY currency in everyday microtransactions. No one's going to pay $10 to transfer $2 for a cup of coffee and a newspaper any time soon.

Bitcoin Incentivizes the Wrong Behavior

bullying award is good for bitcoin

A currency is a very specific type of financial instrument. It's not technically an asset and should not be thought of or directly used as such.

Instead, a currency should serve as a medium of exchange, first and foremost. Think of it as a buffer for the bartering system we humans depend on to cooperate with one another.

If I keep hens but want a gallon of milk, instead of squeezing something akin to milk out of a chicken, I can exchange some eggs or a full chicken for the milk. Great!

milk from a chicken beats bitcoin

But, what if the milk man doesn't want a chicken and is allergic to eggs? Gee, I guess I'm screwed then. That's where currency comes in!

We both agree the currency is worth a certain number of eggs/chickens/milk droplets and we strike a deal on that basis. I collect currency from those who want my sweet, sweet eggs and give some to Mr. Milky for a gallon of the good stuff. Perfect!

Only, Bitcoin gets this relationship wrong from the start.

I'm happy to use currency to get milk because I know that said currency is not a product or an asset in and of itself.

But, what if it is an asset?

Well, I'd be less inclined to give it away, for one. See where I'm going with this?

hoarders gonna hoard

If your currency will be worth more tomorrow than it is today and so on to potential infinity, why would you ever use it for anything? Obviously currency values fluctuate, but they all have relative downward trends overall. This is a feature, not a bug.

Diminishing currency value might kinda suck, but it also encourages people to spend instead of hoard, thus allowing it to serve its primary purpose as a medium of exchange. Assets are for wealth preservation and generation, while currencies are for human cooperation.

Bitcoin is trying to be one while being a very dangerous version of the other. This simply can't work.

Oh, and the store of value narrative is as watertight as a paper bag with a porcupine in it. Bitcoin has collapsed by over 80%, repeatedly, in the last 4 years or so.

Sure, it has climbed to the top of the slide once again, but it is definitely not stable enough to store anyone's hard-hoarded "value" consistently over a reasonable stretch of time.

And moves like this...

bitcoin goes parabolic

Do NOT go on forever.

For every action, an equal and opposite reaction awaits. (Read: sell now, buy at the bottom.)

Bitcoin Only Works on the Grid

cabin in the woods accepts bitcoin

Got no Internet connection? Then, you've also got no Bitcoin transactions, my friend. Nature of the beast and all that.

Unless the "unbanked" all have functioning smartphones with high-speed Internet uplinks, they're thoroughly excluded from participating. So much for being their own banks...

First Movers Rarely Come Out Victorious

nobody remembers the first search engine

This is the cold, hard truth in the business (and especially the tech) world.

Being the first to enter the ring in a Royal Rumble usually just means you'll get thrown out by a fresh, energetic opponent. Bitcoin is the first of its kind, but it is not the best and it buckles under pressure in ways that undermine its purpose.

bitcoin loses royal rumble

Other options have already surfaced to replace it, armed with the much more reasonable goal of serving as infrastructure for the world's virtual economy to function on top of.

Instead of playing the part of usable currencies directly, these improved options take aim at allowing currencies to flow more freely around the world by providing native, peer-to-peer liquidity across an inherently secure and validated network.

Mind you, precious few projects in the blockchain space are worthwhile; I'd guess at only 4-7 even being legitimate, let alone potentially successful. Most are outright scams dressed up as profitable pseudo-business operations.

I've partaken in enough ICOs and assorted pump-dump schemes to know how most of the noise in this space will peter out with time...

*Crickets chirping followed by police sirens.

ride the wave

Don't jump face first into the Bitcoin blue ocean while the tide is high.

Waves crash, and quite a lot of unsuspecting swimmers in this space will soon taste jagged reef.

Read about hoverbikes being hella dangerous next.

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