* Encryption. Yes its a long way off, but the SHA256 and other algorithms required for bitcoin will be broken at some time. If bitcoin ever survives this long, when any of these algorithms are broken it could cause irreversable problems.
These algorithms can be substituted for better algorithms in a hard fork.
We already have empirical evidence that bitcoin is able to survive a hard fork as long as there is broad consensus about it.
If these functions are broken, it's likely that they will be broken gradually and there will be enough time to react.
How long is your investment timescale? 30 years?
I did some quick calculations to obtain some data to illustrate the problem for those who think scalability is something that will only be affecting bitcoin in the far off future.
Source:
https://blockchain.info/charts/n-transactions-excluding-popularExtrapolating from the growth rate in transactions over the last 15 days which has been phenomenal (60%), I wanted to see how long it will be until the network reaches its 7 TS/Second limit.
The data here is just from reading the graph by sight so may be a little inaccurate, but should provide a good estimation. Also we are not at the end of March yet - if the growth continues as it has in the last 15 days, the 15-day growth rate will therefore be higher than estimated.
Daily Transactions | Date | Growth Rate | Transactions Per Second |
19,224 | 3/15/2013 | | 0.2 |
31,289 | 4/1/2013 | 63% | 0.4 |
50,926 | 4/15/2013 | | 0.6 |
82,887 | 5/1/2013 | | 1.0 |
134,907 | 5/15/2013 | | 1.6 |
219,575 | 6/1/2013 | | 2.5 |
357,381 | 6/15/2013 | | 4.1 |
581,673 | 7/1/2013 | | 6.7 |
946,732 | 7/15/2013 | | 11.0 |
1,540,902 | 8/1/2013 | | 17.8 |
2,507,974 | 8/15/2013 | | 29.0 |
As you can see, as I have calculated based on the recent high growth in transactions, if the current growth in transactions continue, by July of this year - unless there are changes in the protocol - there are going to be issues with the network , and real questions of whether a P2P distributed transaction payment system can be ever viable will be raised.
I invite further comments on this. I am a holder in bitcoins so I'd like to remain optimistic that a solution to this can be agreed upon by the community before then that is not to the detriment of private investors.