The federal reserve comes out with their own version of the bitcoin, let’s call it the “USDcoin”, they make a .001 (or some other arbitrary number) USDc the equivalent of $1 and they make it very easy to use. You can have these deposited into your existing bank account and they are immediately converted to dollars and when you send dollars out of your account they are immediately converted to USDc. Then the government also implements anti-bitcoin laws that make using bitcoin difficult or impossible to use. Of course they will claim bitcoin was being used for illegal purposes and money laundering. This will be the end of bitcoin.
But make no mistake, Bitcoin is not the currency of the future. It has no intrinsic value. . . . Bitcoin? Nada. There’s nothing keeping it being a thing. . . . Again, Bitcoin might go up a lot more before it ultimately ends. That’s the nature of bubbles. The dotcom bubble crashed a bunch of times on its way up. Then one day it ended. The same will happen with this.
In theory, bitcoin could become a lawful virtual currency if the bitcoin community gave up anonymity and therefore incorporated the identities of bitcoin senders and receivers as part of the currency. But that would eliminate the cash-like feature that makes bitcoin attractive and vastly decrease the demand for bitcoin. That does not seem like a viable path forward. . . . While I praise the sheer ingenuity of bitcoin and its payments innovation, it should be buried.
Yes. It’s not anonymous, it’s not free, it’s not instant, and it’s not convenient. It’s extremely difficult to make money on it, mining is useless, and it’s literally impossible that it will ever go into widespread use. Unless you have an ideological stake in the concept of Bitcoin (or want to buy drugs and/or child porn), there is literally no reason to get involved in it.
In this blog post, you’ll learn exactly what bitcoin is, and why I personally am pretty sure it’s doomed to fail. . . . I’m willing to go on record for saying that bitcoin will crash. I’m pretty sure about it. It’s human nature. But here’s what I don’t know – I don’t know when it will crash. Many a people tried to predict when bubbles will end, and most failed miserably. It could take months, even years. In the meanwhile, some people will become rich, and they will call me a fool. But inevitably, it will all end in tears for many. Make sure you’re not one of them.
All of which is to say that doing anything legally with bitcoins — and especially converting them into fiat currencies — is going to get harder and more expensive as governments involve themselves. So hard and so expensive, I’d argue, that any advantages the crypto-currency may have over normal means of exchange, like credit cards, will soon disappear.
The problem, as I see it, is that bitcoin only value is it’s medium of exchange, without any real effort. It is ripe for fraud and manipulation, but what fiat monetary system isn’t. The automatic systems of growth to a finite number of units along with the division into smaller increments are intended to eliminate the problems of past monetary failures but cannot control human nature. As the medium of exchange and perceived value increases, hording will occur.
Bitcoin’s path to the grave has always been fairly clear to me. . . . You can’t seize a Bitcoin like you can seize a dollar, since it’s simply an alphanumeric string. But people need to be able to get their money in and out of the Bitcoin economy in order for it to be a useful alternative. With Mt. Gox and other Bitcoin go-betweens having such a hard time staying afloat, it probably won’t be long before even some Bitcoin diehards consider packing it in.