The predicament of Bitcoin

[RainbowKun]

In 2021, El Salvador made Bitcoin its legal tender. Which is one of the fourteen most important events in the history of human currency, indicating the beginning of the currency reform of human civilization and the start for mankind to fully achieve the integration of currency and civilization. A small step in human history yet a big one in human civilization.


From my perspective, Satoshi Nakamoto never wanted split. He longed for but consensus, he yearned to build an open, transparent, fair, free, equal and harmonious world. Bitcoin is the stepping stone of all that.


In the next fifty to one hundred years, all currencies of any sovereign state or economy must take Bitcoin as the anchor and value reserve since only Bitcoin demonstrates the true value. Otherwise the people would do irresponsible voting and abandon fiat in view of the fact that every individual has free will, has the right to choose their own means of wealth storage.


But in the current stage, Bitcoin merely proved its trend to human civilization but far from taking the responsibility of functioning as the infrastructure of human civilization and countless realistic problems are still waiting to be solved. We are in the most elementary phase of Bitcoin’s changing human civilization.


Here are some problems Bitcoin is facing:

1)Incapable of managing sophisticated economic activities

The function of Bitcoin is very simple and basic, namely, keeping account. One block is created every ten minutes, recording the most primary economic activities of human. It’s the only function and the strongest consensus of Bitcoin. The public chain of Bitcoin is available solely for smart contract, any slightly complicated economic activity can not be conducted here.

2)Slow upgrading

Bitcoin’s growing power and strengthening consensus requires minimum governance, even zero governance. It may take months or even years for consensus to come into being anew once any minor improvement in BIP occurs. Issues like block size can spark split of community for lack of consensus. Stability is the biggest consensus, therefore minimum governance is needed and any dramatic change in function of parent chain of Bitcoin is no feasible.


3)Deeper economic activities are not practical for holders

At present Bitcoin is for wealth storage only. There’s nothing else can be done except for trading. Any intricate act is not possible, including DeFi, which could create large value and liquidity.


4)Flawed cross-chain anchor

To unearth more wealth from Bitcoin means to generate Bitcoin in other chains, like WBtc or renBTC in ETH parent chain. But they have considerable disadvantages.

Above all, WBTC isn’t 100% decentralized anchor of Bitcoin since it relies on certain intermediary for conversion and single point of failure can happen at any time. What’s more, cross-chain BTC like renBTC counts on the mortgage of the coin of that platform to keep the private key of Bitcoin and the cross-chain scope is subject to the market value of the platform coin, failing miserably in coping with massive cross-chain activities of Bitcoin. So the market where cross-chain BTC engages in DeFi remains small for the time being.


5)Fresh economic and technological model is needed

Up to now, the market value of Bitcoin is over $one trillion, and it will probably exceed ten trillion or even more in the future. To finish extensively cross-chain and trust-free interoperability demands a brand-new economic or technological model.

Only when that model is invented can the full value of Bitcoin get fulfilled, can thousands of chains get connected. Then Bitcoin can rise to be the infrastructure of human civilization.


6)Inability to community management for most holders

Minimum governance renders it almost impossible for Bitcoin holders to participate in community management substantively, such as voting and proposal.

Bitcoin is the biggest community in blockchain, and also the most separate one in terms of strength for what members in this group can do is merely looking at the pumps and dumps of Bitcoin and attacks from the outside world like bystanders.
While those who enjoy the participation of Bitcoin network most, that is, miners, are pitifully the most disloyal part for the reason that they have to maintain the cash flow for daily expenses by mining Bitcoin, selling Bitcoin and withdrawing USD, giving out their Bitcoin continuously.


7)Narrow sight of Bitcoin investors

Now more and more eyes are being attracted by Bitcoin, from individual to financial institutions and sovereign countries.
Sadly, an overwhelmingly majority of people who invest in Bitcoin are money-driven, they hope Bitcoin can maintain or, preferably, lift the value of their wealth, or get rich overnight. However, mindset like this normally turns out to be damaging.
They lose money because of, in essence, the lack of information about the intrinsic function of Bitcoin, its function in the three decades to come for human civilization and its position as the infrastructure for human civilization.


8)Manipulated price of Bitcoin

Within one year, the price of Bitcoin is nearly twenty times higher at its peak than its lowest level. But few people really earned money during this process in that most of them chose to buy when the price is rising and sell when it's dropping, tricked by whales miserably. But actually the investors with insufficient experiences are more to blame.

The good news is, though the price of Bitcoin could be affected for a couple of days or months, it is on the whole going up accompanied by untold twists and turns and won’t be controlled in the long run until Bitcoin truly grows to be the infrastructure of human civilization.


9)Monopoly from whales

Whenever the price of Bitcoin plunges, whales would come and collect Bitcoin, accumulating their bargaining chips in this way, bringing monopoly.
That means, firstly, whales do the purchasing because they believe Bitcoin is profitable and the price they catch is surely underestimated; besides, the globally growing Bitcoin consensus will give birth to more and more believers whose bravery to have Bitcoin will bolster the further scattering of Bitcoin. That’s a natural process for these Bitcoin owners to reach the consensus collectively.


10) Pollution and energy consumption  

Some people reject Bitcoin because they think Bitcoin mining does harms to environment and consumes the already scarce energy.
But now the truth is, increasing green energies such as wind energy, hydro energy, photovoltaic solar energy and thermal energy have been applied to Bitcoin mining. That is not a one-way process. Those energies would be transformed into hashrate which would become Bitcoin next, recording all the economic behavior shaping a ledger for the economic behavior of human civilization.

The energy is not wasted but stored within Bitcoin where all human wealth is locked. Bitcoin became the infrastructure and anchor of human civilization.


I summarized these ten problems in Bitcoin. They are rather realistic. Some can be settled by the natural evolution of Bitcoin, while more of them need a series of new solution.


Do you think these flaws exist in Bitcoin ecology?


PS: When posting for the first time in bitcointalk on July 1, 2021, my heart was filled with respect and reverence. As a believer of Satoshi Nakamoto, I know this place is one of the greatest wealth he had left. In the past two months or so, I have spent all my time and energy on in-depth original thinking about Bitcoin, finished 60-odd articles and unleashed them here to express my admiration. But now I am really disappointed with bitcointalk, which, controlled by a small group of thugs, has become a place of violence, deception and slander. Some people tried their best to accuse me of plagiarism and get my account suspended.


That has brutally broken all my expectation of bitcointalk. This article is the last one in my series of philosophical thoughts on Bitcoin. It could have been divided into ten independent sections, whereas I don't think it necessary anymore. After sharing this article, I will temporarily leave there and go back to my normal life, and to the preparation of my own blockchain project. In the future, I will build a paradise of Bitcoin in my own way to show my respect for Satoshi Nakamoto and Bitcoin.


I show my gratitude to everyone who has ever supported me. Hopefully, my words in the past quarter can become a mark in the history of Bitcoin. Maybe 30 to 50 years later, when our offsprings read these articles, they will surprisingly find the Bit Civilization gradually turning out to be a reality and Bitcoin part of human civilization. Time will prove everything and give the best answer.

[DapanasFruit]

The recent decision of a small country of more or less 6 million people called as El Salvador puts it on the Bitcoin and cryptocurrency map of events. And though this is just a small country, its impact on Bitcoin can be beyond words to describe. However, we have to understand that is actually a big experiment on how successful Bitcoin can be adopted as a legal tender and can be the basis if other nations will also adopt or will not adopt Bitcoin. Maybe within two years, we can assess and analyze whether Bitcoin is working well in El Salvador and the many bottlenecks experienced so we can learn the many lessons involved.

[Fundamentals Of]

The predicament of Bitcoin is that it is a currency that could not easily fit the current arrangement of our society. The systems at work right now are tailored for fiat. The economy is structured in such a way that fiat is its best currency. The government is powerful partly because it has the control of fiat. So the biggest problem for Bitcoin adoption is that it so disruptive of what is already established that it can hardly be appreciated. It cannot be adopted without breaking the entire foundation of the status quo.

[Kittygalore]

The predicament of Bitcoin is that it is a currency that could not easily fit the current arrangement of our society. The systems at work right now are tailored for fiat. The economy is structured in such a way that fiat is its best currency. The government is powerful partly because it has the control of fiat. So the biggest problem for Bitcoin adoption is that it so disruptive of what is already established that it can hardly be appreciated. It cannot be adopted without breaking the entire foundation of the status quo.

It just needs time, people will learn and people are greedy and if they know that there's more money to be made in crypto, they will eventually adopt and use it. The government can't do shit about it, even if they're powerful, they can't incite dictatorship over their people and risk rebellion and in a democratic country, they need the votes.

[worle1bm]

There are some invalid points that you have mentioned like new model for bitcoin as what's the problem with the current one? Although with technical development like taproot the system could be improved but what you are talking about is hard fork which is not at all good idea with fresh models like in the previous like BSV or Bitcoin Cash but have they been successfully operating?

The whales are able to manipulate the prices but in short run and still there are lot of retail and institutions holding bitcoin.Most of the the whales are dormant and you could check it easily.

So the current bitcoin model is good and those who want to use it can give the support.

[KingsDen]

1)Incapable of managing sophisticated economic activities and 
3)Deeper economic activities are not practical for holders
I believe these two points are alike if not same. Can you please elaborate on the deeper economic activities you expect bitcoin to perform, knowing too well that it is not government friendly. And government is the mother of the economy.

2)Slow upgrading and 9)Monopoly from whales
You are clamouring for Bitcoin governance no matter how minimal. I also share same believe and have also made a post about it. But, if it happens, Satoshi's initiate plan would be defeated. An attempt to govern it will lead to its hijack. Think of it that there are few Lords called whales who manipulates the market, it therefore means that there are other Lords whose decisions and judgments are favoured in Bitcoin technical than others.

5)Fresh economic and technological model is needed
I do not believe you are clamouring for a fresh technology or a new model for bitcoin. What is this fresh technology intended to achieve and how will it be achieved, by consensus? After seeing the 2017 disagreement, it therefore means that the new model will override bitcoin totally. Which is not possible. Bitcoin by birth has fans which cannot vote against any of its design at any time.

8)Manipulated price of Bitcoin
I was initially bothered about bitcoin price manipulation not until I realised that it is one of the beauty of Bitcoin. Remove the price manipulation and fluctuation, there will be not crypto trading again. This is because it is the Bitcoin price that moves the prices of almost all the altcoins.

10) Pollution and energy consumption
This should be the reason we need minimal governance according to you. Someone needs to enact the law that will force all miners to green energy. That energy consumption is a great flaw that the government will always use against Bitcion anytime.

But now I am really disappointed with bitcointalk, which, controlled by a small group of thugs, has become a place of violence, deception and slander. Some people tried their best to accuse me of plagiarism and get my account suspended.

This community appreciate your efforts. Within a short time of your stay you have gotten good number of merits, we also read your articles, we comment aswell and you have been known. Things are not always without challenges, that is the nature of the forum. If you were to be Satoshi that you admire, Bitcoin wouldn't have been created because he faced many changes too. So, since you are aware this is the right forum, please don't give up. One thing I like about your articles is that they are futuristic. It's like you are a prophet of Bitcoin. Only time will prove your prophesies.

Note: I think it will be nice you bold the subheadings instead of yellow colour. The yellow does not go well with the white background, it strains the eyes. Thank you!

[Sterbens]

I don't have to comment on things I'm not good at like you and the others. I wouldn't mind too much how difficult Bitcoin is and all the aspects that make it so easy to criticize by people new to the world. Because for me Bitcoin is special with all the advantages and disadvantages it has.. Isn't nothing really 1000% perfect?

PS: When posting for the first time in bitcointalk on July 1, 2021, my heart was filled with respect and reverence. As a believer of Satoshi Nakamoto, I know this place is one of the greatest wealth he had left. In the past two months or so, I have spent all my time and energy on in-depth original thinking about Bitcoin, finished 60-odd articles and unleashed them here to express my admiration. But now I am really disappointed with bitcointalk, which, controlled by a small group of thugs, has become a place of violence, deception and slander. Some people tried their best to accuse me of plagiarism and get my account suspended.


That has brutally broken all my expectation of bitcointalk. This article is the last one in my series of philosophical thoughts on Bitcoin. It could have been divided into ten independent sections, whereas I don't think it necessary anymore. After sharing this article, I will temporarily leave there and go back to my normal life, and to the preparation of my own blockchain project. In the future, I will build a paradise of Bitcoin in my own way to show my respect for Satoshi Nakamoto and Bitcoin.

Regarding this, it is natural that you are often suspected by the seniors in the forum. As far as I'm concerned, but I don't really care about this case.

First you come with a new account where the stability of post value, activity and trust is not balanced (as a moderator they will obviously snoop on the person's activity). Why is that important? To be honest, we are not as good as you in crafting words that attract the admiration of many people. Second, third and so on I actually don't really know, but I certainly ethically admit that you have quality. For me, whoever it is, if it is really capable, I will definitely appreciate it, even though he is younger than me and more of a beginner.

[Fundamentals Of]

The predicament of Bitcoin is that it is a currency that could not easily fit the current arrangement of our society. The systems at work right now are tailored for fiat. The economy is structured in such a way that fiat is its best currency. The government is powerful partly because it has the control of fiat. So the biggest problem for Bitcoin adoption is that it so disruptive of what is already established that it can hardly be appreciated. It cannot be adopted without breaking the entire foundation of the status quo.

It just needs time, people will learn and people are greedy and if they know that there's more money to be made in crypto, they will eventually adopt and use it. The government can't do shit about it, even if they're powerful, they can't incite dictatorship over their people and risk rebellion and in a democratic country, they need the votes.

But what will that make of Bitcoin? Would that be enough for Bitcoin to be adopted by countries around the world?

I cannot follow your reasoning. Do we have to start from people's greed and that will eventually lead them to get into crypto? If people think there is easy money in crypto then they will adopt and use it? I don't think so.

If the ultimate goal is for Bitcoin to become a legal form of money in the world, people's greed is not enough.

[TravelMug]

I consider this as a challenge and not a predicament or the negative of bitcoin.

And there's no perfect technology or model to be honest and people are going to find flaws in every technology. It's the way people or government are going to react on it. If they don't because of the perceived predicament so be it. That's how humanity evolved throughout history. There's no perfect model, you/they have to adopt on it. Bitcoin is not here to please every government around the globe and it was design as it was by Satoshi.

[songchunlai]

You small group of thugs hurry up to contact me, my Telegram is @ChunlaiSong. I will give you strength. You should not expel such an excellent subject. His writing is excellent and his views are correct. This is exactly what we need.

[dansus021]

for me what is el savador doing is an example to other nation and is still on early stage,there is anti bitcoin community that make hard to adoption in other country. if we successfull adoption in elsavador maybe other country will start accept cryptocurrency.

but in the other hand.
China is fight againts cryptocurrency and absolutely want to making e-yuan or digital yuan, china won't depend to other country so they always make copies of the original and create new things from it. and this become predicament of bitcoin and other thing like all member said about polution and so on


i think bitcoin will make it through sooner or later