I believe there are 2 primary reasons Bitcoins (and other cryptocurrencies) won’t be used, in their current form, in the future. I think Bitcoin’s doomed.
Weighing up the costs and benefits of using Bitcoin as a currency for a lot of transactions:
The costs we face in accepting Bitcoin as a currency.
It’s basically private companies printing Australian money:
You can’t have 1500 companies around the world printing money. It makes a mockery of money. Governments use money to try and help us out. Bitcoin curtails the government’s ability to execute most components of both it’s fiscal and monetary policy and sooner or later, governments around the world are going to call a halt to it.
It will below up uninformed investors:
As I’ve covered elsewhere, Bitcoin (and its substitutes, alternative cryptocurrencies) are currencies being which are mostly, at the moment, being used as speculative assets. It’s a weird type of confused investor who is buying them. Their main motivator is FOMO – the Fear Of Missing Out – which indicates they have a low propensity for risk – and, to manage it, they take on a very high risk asset (meaning, kind of by definition, they don’t understand it.) In short, people are buying something they don’t understand and will lose a lot of money. Sooner or later, financial regulators (who are set up precisely to prevent this sort of thing) will call a halt to that.
Bitcoin (as a use of Blockchain) uses a lot of electricity to validate transactions:
Even at current levels, at which only a small proportion of all transactions made in the economy are in the currency, Bitcoin consumes as much electricity as New Zealand. That is a high financial, transactional and environmental cost. The costs are so high that Bitcoin miners are locating near hydroelectric power stations – and being thrown out of the area by local authorities for driving the price up. Sooner or later, environmental regulators (who are set up precisely to prevent this sort of thing) will call a halt to that.
Eulogy made by Neil Aitken