2014

Bitcoin’s defects will hasten its demise in 2015 . . . Bitcoin’s flaws are becoming more evident, which may explain why prices more than halved in 2014. That trend should continue.

A writer for The Washington Post argues bitcoin’s system is doomed to fail because governments have a lot of say when it comes to any financial system and can put pressure on those intuitions as it sees fit.

Right now, Bitcoin is only mostly dead. As an investment, it was the worst of 2014. . . . The problem, though, is that Bitcoin will likely not survive to get to that level of innovation. Will Bitcoin enthusiasts support it after they realize it has ceased to be useful as a currency and is a terrible investment? Not likely. At some point they are going to realize that they are subsidizing Bitcoin for theoretical and emotional reasons so that it can be exploited by regulation-seeking venture capitalists. When that happens Bitcoin will shift from being mostly dead to being all dead.

But Bitcoin is doomed as a payments network — the very point at which it looks as though it is likely to be widely deployed is the point at which governments, like that of the United States, will crack down on it.

But Bitcoin is doomed as a payments network. . . . But if I had to put money on it? I’d say Bitcoin is doomed in the medium-term future.

Bitcoin’s collapse comes as governments around the world consider regulating or prohibiting the virtual currency to prevent criminals from using it to trade contraband. . . . Ripple has gained 36 percent this year; eventually it could displace bitcoin, Reinelt said.

And so the whole bitcoin system eventually becomes a house of cards, and anything – a scandal, a government attack, whatever – could trigger a loss of confidence leading to a run that brings it all down. . . . There will be a stampede for the exit, the price of bitcoin will drop to its intrinsic value – zero – and the system will collapse. The only question is when.

Bitcoin is not [the future]. It is a step along the way and will eventually disintegrate. . . . As a currency [Bitcoin] is almost negligible against anything. It can’t stand toe-to-toe with the Cuban Peso. . . . With Bitcoin the pretend currency, what you see is not what you get.

With only about 13 million Bitcoins in circulation and the final number capped at 21 million, the supply is too limited for them to serve as a viable currency. . . . There will always be a place for Bitcoin and its ilk somewhere in the bowels of the Internet, but the cryptocurrency will never challenge the dollar as a medium of exchange.