The Holy Bitcoin -- Great Expectations Never Met

By Jelly Fish | cryptofun | 7 Oct 2019

Then I saw her face, now I'm a believer
Not a trace of doubt in my mind

The Monkees (1965)


Bitcoin and all the crypto industry is now 10 years old. Probably everyone by now knows about the pizza, the MtGox, the hype tsunami all over the planet, $20K all-time-highs, and the promise to eat own thing by 2021. And after a recent couple of years, I've got a bit sick and tired of reading over and over again about how the Holy Bitcoin and friends will rule the world not later than by the next Thursday...

But my personal attitude is not important, anyway. Let's see what was expected about crypto in theory and we have in practice today. Of course, the Holy Bitcoin is the main prey, but the remarks can well be extrapolated to its crypto-friends too.

Anonymity. "Don't let the government control your hard-earned money!" In practice, there's rather little anonymity in the internets. Mostly, the anonymity of the Elusive Joe who nobody tries to catch. And the less hacker you're -- the less anonymity you have. You can hardly hide your IP even if you know about TORs and VPNs. The one with enough time, money, and brains can track your BTC address down and tax your hard-earned pennies. And generally, there's even little need for such elaborated chasing plans -- thanks to AML, KYC et al. And generally, anything based on the internet is not anonymous by default...

Decentralization. "No one can control cryptocurrency!" Days, when everyone could mine bitcoins on their laptops, are long gone. As I've heard, 60% of BTC mining is in China now. And those are not laptops, but sheds packed with thousands of ASICs pricing say $2K each. I can well imagine how the Communist government builds up state-owned mining plants with an unlimited supply of free electricity -- and voila, шnstead of FRS-regulated dollar you now have CPC-regulated bitcoin. The only question why would the CPC need the state-regulated bitcoin for. And I even don't talk here about the power the developers of new altcoins have over their own blockchains...

Safety. Wallets and exchanges can be hacked. Your pennies and even your address itself may disappear from the blockchain as a result of some 51%-and-I-don't-know-what-else attack. You don't have any proof of owning your crypto-assets except the record in the blockchain itself -- it's not a bug, it's a feature. I don't mean that the cryptocurrency is "unsafe", but much like "anonymity", crypto-"safety" has many little devils sitting in its details. Shortly, you can lose your crypto just like you can lose your fiat, only in somehow another way... And it's hard to tell definitely which safety kung-fu is better.

Adoption. "Everyone will throw their dollars away and will start to use bitcoin!" Huh, with BTC it's now possible to buy pizza or to pay for VPN somewhere. What else? T-shorts, taxi, tips, and crowdfunding some geek gadget? And even then it's mostly a USD price, only expressed in BTC. Anyway, you can now hardly fund building a power-plant or even a pubic laundry room with crypto...

Transaction benefits. As for bitcoin, its transactions are now neither cheap nor fast, even with segwit and the like. Many altcoins are much better in that relation but are much less used.

Investing. "Bitcoin is not for payments, it's for investments, it's digital gold!" Hmmm, apart from being quite far from gold, bitcoin is a sort of investment, that goes from zero to $20k, then back to $3k, then forth to $10k, and then I don't know to where else... BTC is a great investment if you'd got a couple of thousands mining them on your laptop back in 2009 and sold everything at $20k in 2017. But it's not so great if you bought it at $20k... Shortly, cryptocurrencies can be an investment tool, at the moment at least -- but not for everyone. The majority of inexperienced investors will loose in the long run.

So what's the moral, you might ask? Well, there's none, actually. I didn't tell anything new. I don't have any financial advice and don't know if to buy, to sell, or to hodl. I just wanted to say something provocative -- and so I said!


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Jelly Fish
Jelly Fish



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