How to Kill Bitcoin (Part 2)
The level of cognitive dissonance around Bitcoin (and crypto in general) is kind of amazing. That much I will agree on.<p>But to dismiss anything pointing out the flaws in Bitcoin as sour grapes from people who missed out? Wow. That&#x27;s cognitive dissonance right there.<p>The simple truth here is that:<p>1. Bitcoin consumes an awful lot of energy;<p>2. It solves a problem for almost nobody; and<p>3. It&#x27;s not as secure as people think it is.<p>I&#x27;ve become increasingly convinced that (1) is what will ultimately doom Bitcoin. I mean it will likely be replaced by something more energy-efficient (ie PoS vs PoW). But that transition will be a massive event in wealth redistribution.<p>As for (2), Bitcoin seems to have two forms of utility:<p>- To escape capital controls in many countries. Wealthy individuals in China trying to bypass Chinese capital controls was (IMHO) a big initial driver in Bitcoin. This also covers countries without a stable currency (eg Venezuela) or artificial limits on currency conversion (eg also Venezuela); and<p>- Illegal stuff.<p>You could argue that Bitcoin is also an asset you can hold for diversification purposes but ask yourself this: would people hold Bitcoin if it was expected to hold a constant value against the US dollar? Or another relatively stable currency? Or even a basket of such currencies?<p>That&#x27;s impossible to know but I suspect not. I strongly suspect that expectations of BTC rising in value is a big part of why people buy and hold it. &quot;Ponzi scheme&quot; is one characterization of this. I&#x27;m not sure it&#x27;s fully accurate but it&#x27;s not that far off either. I think &quot;tulip fever&quot; may be more accurate. Either way, the chickens come home to roost eventually.<p>As for (3), I can&#x27;t speak to the technical merit of the suggested attack in this post. It&#x27;s known however that the network as a whole is vulnerable to a 51% attack (and I honestly believe there are several who could orchestrate such an attack if they were so inclined).<p>Personally I find this fascinating. And sure I wish I could go back to 2010 and buy $1000 worth of Bitcoin. But that applies to anything. Buying Apple in 1999. Buying Amazon at, well, pretty much any point. Buying land in the 1990s.