I am amazed at the hype put out by some of the so-called news sites about cryptocurrencies. COINTELEGRAPH for one. This came out recently…
“It is possible to make a relatively accurate prediction about the future of Bitcoin by analyzing five factors successfully used by technology adoption experts for decades.”
If you follow the link you will find five reasons, given by a guest author, as to why bitcoin is here to stay. Dear writers of the hype, nothing is “here to stay.”
Not really. It’s just a way to get you to read the COINTELEGRAPH story. It worked for me. But I felt cheated afterwards. Why? Because the guest writer even tells us that well, “maybe” bitcoin is here to stay or maybe not. But here’s why is might be around for a bit.
First, bitcoin is said to have the advantage of being a “decentralized ledger.” We’ve been over that. Every crypto-noob gets it. But dude, it isn’t just about the ledger. It’s about the probable Chinese control of most of the bitcoin system. Now that tingles my funny bone.
Secondly, the next alleged advantage? It’s cheap. Not so fast, gumshoe. The transaction costs of bitcoin have been climbing steadily since its inception. Relentlessly even. Each and every cryptocurrency exchange, retailer, Tom, Dick or Harry — has a different darned rate. And I’ll be a sheep herder if they are easy to understand.
Okay, compared to banks, fees are probably lower — if the value of the BTC doesn’t free-fall during your transaction. So, unless your fiat is depreciating like cash in Venezuela, PayPal is probably cheaper for purchases, at least in the United States. And a hell of a lot easier to use.
And spare me about there only being a limited supply of BTC’s. That’s a gimmick. What is the supply? Numbers? Codes on a shared ledger? It’s information everyone agrees is somehow limited — until we all agree that we can use a better, newer, more secure, more private ‘coin.’
It’s not about the artificially limited supply of bitcoin. It’s about the code. The secret code we the users (those who are allowed to use bitcoin) agree represents a form of functional money, then and there. In that second of time. Because in the next second, this funky bubble might burst all over Beijing. Actually, all over the noob-world, with the Chinese scooping up the whale’s share of other cryptocurrencies in a continued effort bilk the average investor. To convince the unhinged happy-go-broke-today-guys to raid their 401k’s as soon as possible — before there’s bubble-trouble.
No, say you? No bubbles in bitcoin?
(And yes I know that if the dollar takes a roll, 401k’s will become worthless in the United States — but so will just about everything else.)
Third. Well, the “guest writer” didn’t use my ordering here, but the fact that bitcoin payments do not go through a third-party is a bit misleading. Sure, you can send your BTC from your desktop wallet to a retailer or your local coffee shop — and wait 24 hours sometimes — but often retailers want a third-party intermediary.
Even guys like me might want to set our BTC aside, until our socks arrive at our doorstep, before we “release” the cryptocurrency to the seller. Why? because the standard BTC transaction is a one-way ride to someone’s decentralized ledger. Once I send it, it’s gone, unless I use a third party or a smart contract, such as Ethereum. Confused yet? Yeah? Now try to get your bitcoin back.
Dear “Bit-Con Bank,” Joe’s Sock Retailer in Japan screwed me on a pair of socks. What? There is no “Bitcoin Bank?” Wait a minute…who is in charge here? Me? But I can trace the bitcoin to a funny address in Japan, err maybe that’s Hong Kong…wait a minute the bitcoin transaction split…went through a mixer…
The lesson here? Buyer beware.
Another great thing touted as a plus, is bitcoin’s iPhone-like “idea.” It’s compatibility. Seriously? Even iPhone is taking steps — or was — to keep our information private. Not bitcoin. At least not yet.
But that was not the rub here. The cited advantage here was that bitcoin was easy to use. Let me repeat that: easy to use. Are you kidding me?
Yes, I know I can download an app and use a third-party bitcoin service, with fees, and send my bitcoin around, after I scan a bar-code thingy or type a freaking long alphanumeric code (and hope I get it right). It’s just so darned cool… Not.
Sending bitcoin can be dicey. Why don’t the gurus of Fintech ever fess up to that fact? User friendly? Hardly. But I can use most of the wallets and I have tried a variety of third-party apps. The operative word here is “tried.”
I have since dumped all the bitcoin apps from my dumb-phone. They are not all that secure. I don’t bank on my dumb-phone for the same reason. Paranoid I guess. And I don’t have too much to hide. I just don’t want to leave chum in the water.
Not “trialability.” The idea that more and more bitcoin ATM’s are beginning to show up and that people will “try” the goods is a bit over the top. Sure, people will be curious, but not stupid with their money. Not adults anyway. Not in the semi-IRS-police states of America anyway.
I don’t want my identity spilled all over the bitcoin ATM grid. Besides, these ATM’s are pricey. Coinbase is cheaper and so are a dozen other outlets.
Why do you think a lot of the BTC ATM’s are showing up in shady internet cafes, overpriced malls, and gambling establishments — with ear-biting, ex-heavy weight boxer logos? I don’t know if those ATM’s are made in South America or Switzerland. I do know who to call when I see an extra charge on my debit card from Coinbase. I won’t be calling “Mike” for a refund of BTC if one of his ATM’s breaks — he might be hungry. Might chew my ear off — literally.
If something is complex, but easy to drive, people might buy it. True. I’d have to agree here. But is bitcoin easy to drive and easy to trust?
Sure, you don’t need to know how your car works to be a great driver. You just need to know some basics. Steering wheel, gas pedal, brakes and you are off.
On the other hand, if one day your car gets better gas mileage and the next day it sucks, then what? Would you trust your complex, easy to drive roadster? How about if the car is not so reliable? You try to start it and nothing happens? You try again three hours later and it works? Hello?
This is bitcoin today. You click on send and wait and wait and say, “oh crap, where in the hell did my crypto go?” And, “you charged me what? How and when did you add that fee?” And, later, “I’m sorry, Mike — I didn’t know you owned that BTC ATM at Jim Bob’s Internet Cafe and Boxing Shop.”
Seeing bitcoin in action.
The thing is, as the cited article states, we don’t see bitcoin in use much the United States. In other countries, such Japan, you do. Well congratulations Japan, maybe you are about to get some payback from China, however. You might want to diversify into other crypto’s fast like.
You don’t see much news about BTC, unless you go looking for it — or unless someone makes a lot of money — or loses a lot. This is true.
The Other Reasons:
Then there is that pesky regulation problem. Bitcoin is just so new that the poor old governments are simply stumped. What ever shall we do? FinCen asks. How on earth will we ever catch up? the IRS complains. How can we copy it, the banking industry says.
Let not the cryptocurrency promoters take your eye off the ball. The regulators (governments) are the money makers — literally. They want bitcoin to bite the big bubble, so they can copy it and outlaw the private use thereof — in the U.S.
All the warnings are there. Lawsuits. Imprisoned users. Audits. Fines and so on.
You might want to prepare — if you are a cryptocurrency enthusiast — with a better coin. A more private and secure one.
No, bitcoin is not a passing fad. It is certainly a learning process. It’s this process that tells us that there will always be improvements to the code, unless the human race checks out. And that someone or some group of them, will certainly find a better system than bitcoin.
And when I see articles like this, offered as high-brow Kool-Aid for the misinformed, I just gotta pipe in. Let people know that there is another not-so-bright-side to cryptocurrency. That you need to dig a bit, before you go riding the fast lane to success…like me…but not so fast.
Featured Image: Flickr