I simply do not see anything but risk in BTC, so here are the things that I find troubling in the BTC mania:
1. Why does BTC have value?It holds 0 value to me, and I would not pay a dime for it as of right now. I fully comprehend there are a limited 21 million coins to be mined, however this means nothing. Psychologically of course, I find it tempting to think that since people want these coins: there is a limited amount and due to the nature of the system, you're going to end up having fewer than 21 million coins due to HD failures and what not. A single coin can theoretically go all the way to infinity, but:
Someone has to buy your coins at a higher price than you bought them for. Since you have the HODLing culture, where people just keep them on faith, the market is further deprived of BTC. This means that all the incoming money, is only chasing the coins that are for sale creating a price bubble. Since the price is going up, nobody wants to get off the winning train, even fewer coins are in play, further driving up the price and so in my view, just blowing up the BTC bubble. One might argue it's because of the Block Chain, but that's opensource and already has multiple Virtual "Currencies" competing with BTC - many of which are faster, possibly presenting a solution to my second issue. The Block Chain therefor isn't unique to BTC, and so it's value can't be derived from it. It's simply a token floating on top of the BTC specific block chain, that's all it is and all it does. It just can't be duplicated or forged, unless you have 50% of the network (reason 3).
Also when I first heard about BTC, it was virtual money. A few places in my city started accepting bitcoin for purchases, but they all stopped accepting them. All of them. This then goes to my next point:
2. A limited edition digital (FIAT)money to replace digital/paper banking (FIAT)money, turned virtual (FIAT)gold, turned into a speculative (FIAT)asset.When I first heard of BTC, it was supposed to become the virtual universal money, that can't be printed so it can't be manipulated as easily. Ironically, combat FIAT money by having a limited edition FIAT money. At first here BTC took off a bit, companies were proudly presenting themselves as accepting BTC. There are none left today that do. It's not like you can ever use BTC to buy a 4$ coffee, because by the time your transaction goes through: your coffee is now twice as expensive, and it's cold because it took 20 minutes for your payment to go through. I know for a fact, grocery stores and various kiosks will never adopt a payment that takes more than 15 seconds to transact. This issue can't be fixed within BTC, so Bitcoin already failed it's first promise.
So it went on to become virtual (FIAT)Gold*, a store of value. It's just that BTC doesn't hold value for everyone, only people believe in it: which are the people using BTC to increase their holdings in FIAT money: because I'd wager 90% of BTC people are only in BTC to make more FIAT money, it has massive volatility making it a really poor store of value, so it reached it's third state: A speculative asset. There goes the second promise then.
Everyone I see praising BTC, youtube, here & my friends in on it: Very few people understand what BTC is, how it works, all they see are the massive profits a very few people have milked off the various peaks of BTC. The value isn't in BTC for these people, but rather that people are willing to pay more to get your bitcoin than you paid for it. You've only won when you cashed out:
How exactly is this not exactly like a pyramid scheme? Each and every hodler and investor is hoping for someone to pay more than they paid for it: as long as new people keep coming, this will hold true. A distributed pyramid scheme.*BTC is not backed by any commodity, and therefor, it is FIAT in it's nature.
3. The (un)distributed ledgerWhen BTC blew up, mining at home was viable for most people and utterly full filled it's promise of a distributed ledger. However, the rapidly advancing requirement for a larger HASH rate and ever increasing ROI times simply drove out the home miners, leading into an ever decreasing number of miners, essentially beginning the centralization of the distributed ledger. This is what I personally believe Satoshi Nakamoto finally understood and quit the project - should he be a real person. Only larger and larger miners have the ability to remain profitable and increasingly in areas with cheap power, which has lead to my
MAIN CONCERN regarding BTC:65% of the Hash rate is in China, and this number isn't showing signs of decreasing. I'm acutely aware of the CCP's ability to simply take peoples homes and property, and even the founder of Alibaba Jack Ma's next IPO was blocked by the CCP. They're not opposed to organ harvesting and concentration camps for Uighurs.
Freedom only exists for CCP members in China, and I don't see any reason Xi Jingping or anyother high level official simply can't order the appropriation of the hash rate. If you know about Bitcoin, you should know that you can execute a 51% attack once you have over 50% of the block chain. I also do not know if these mining centers are already owned by a few individuals and how distributed they are among each other. What I am certain of however, is that every mining center owner in China has CCP papers in their pocket.
How much do you trust the CCP to not mess with the BTC ecosystem?How do we know for example, that this is not exactly what happened when the Billion Dollar Silk Road wallet began moving about?
https://cointelegraph.com/news/1b-of-bitcoin-from-silk-road-wallet-moves-for-first-time-since-2015Even if the CCP will leave BTC alone forever, the fact that the costs keep going up and ROI's increase means that fewer and fewer miners are able to continue operating profitably. What exactly is the safeguard for BTC in this scenario? What prevents the entire system 20 years from now, being in the hands of a very few people?
Change my mind, make me a BTC believer.
