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.
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.
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.
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.