Here's my 2c on Bitcoin
Firstly, from an environmental and ethical standpoint, I wouldn't touch Bitcoin with a 10 foot pole. The amount of electricity used by Bitcoin is horrifying, see https://digiconomist.net/bitcoin-energy-consumption
- Consumes the same amount of electricity as Ecuador
- 7 US households could be powered for a day with the electricity used by one Bitcoin transaction
- 2,000,000+ US households could be powered by the electricity used by Bitcoin
No doubt blockchain is a clever idea for security of financial transactions, but really, whoever came up with Bitcoin as a currency should be awarded the ig Nobel prize for stupidity, if they have one. The transactional efficiency is so awful in terms of energy cost, I don’t see how it can ever be sustainable. Ethereum looks like it has the same problem.
I found a video somewhere of the inside of a Chinese Bitcoin mine. I had this idea it would be a modern, clean, Google-like data centre humming away. It was some f-ing idiot who had leased the second floor of a crumbling building in the back blocks of China, and it was filled with shelves and shelves of mining computers, fans whirring, cables like spaghetti, the whole thing was a third rate ramshackle operation with an electricity bill of $80,000 a month, courtesy of coal-burning power plants. Mankind has enough ways to rape the environment in the name of greed, I don’t see why we need another one.
Anyway, mini-rant over.
The problem I see with Bitcoin as a currency is that there are only 21 million of them (correct?). Of course you can own fractions of a Bitcoin, but it’s still a finite number…(unless they start allowing smaller and smaller fractions of a bitcoin, in which case isn’t that the same thing as printing more traditional currency?)
For it to be successful as a currency, it needs to be useful to people to buy goods and services. (The PDF listing places that currently take Bitcoin is a joke, when you have to have some obscure English Pub on the list, you’re clearly padding it). Businesses that sell goods and services accept specific methods of payment because they believe doing so will make it easier for people to do business with them. With a finite number of individuals holding Bitcoins there is little incentive for them to hop on board. Meanwhile, as Bitcoin holders want good and services that they can’t pay for with Bitcoin, they will at some point have to cash out in USD (or local currency), further reducing the number of Bitcoin holding individuals, and further reducing the incentive for merchants to accept them. If you don’t have as many people coming “on-board” as you do “cashing out”, Bitcoins are simply going to tend to pool in Exchanges, and like a giant game of pass the parcel, it will be a case of not being the one stuck with all of them.