How valid this article is?

[gsingh]

I read this article, it raises some question. Not sure how valid these concerns are?

Any thoughts?

http://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly

[XBBlade]

Looks good, but I'm not sure. Let some experts look into it. 

[Littleshop]

After a quick read on a small screen I would say a good article with a mildly sensationalist title. The title implies bitcoin is straining when in fact there is little evidence of strain on the system.  They sort of imply the growing hash rate is a problem when most people would disagree.  

[pening]

I'd say its spot on, it highlights several issues in a fairly straight forward dispassionate manner.  Its not doom and prophecy of failure, its there's some things that need to be addressed.  There are strains, hidden beneath hubris of the enthusiastic community, I reckon the community would do well to take this a checklist of actions to improve Bitcoin.

[Lauda]

Bitcoin’s success has revealed three weaknesses in particular. It is not as secure and anonymous as it seems; the “mining” system that both increases the Bitcoin supply and ensures the integrity of the currency has led to an unsustainable computational arms-race; and the distributed-ledger system is becoming unwieldy. Will Bitcoin’s self-correcting mechanisms, and the enlightened self-interest of its users, be able to address these weaknesses and keep Bitcoin on the rails?

All three are partially wrong. It is not anonymous if not used correctly. It is not as secure? They haven't stated why.
The constant increase in hashrate is certainly not a weakness.
Feels like someone had a quick read about bitcoin and made an article without sufficient research.

[corebob]

Thats a good read.

I guess the good news is that no matter how many flaws and problems arise, fiat did worse.
To make bitcoin fail fiat style you pretty much has to crack open the encryption.

[pening]

Bitcoin’s success has revealed three weaknesses in particular. It is not as secure and anonymous as it seems; the “mining” system that both increases the Bitcoin supply and ensures the integrity of the currency has led to an unsustainable computational arms-race; and the distributed-ledger system is becoming unwieldy. Will Bitcoin’s self-correcting mechanisms, and the enlightened self-interest of its users, be able to address these weaknesses and keep Bitcoin on the rails?

All three are partially wrong. It is not anonymous if not used correctly. It is not as secure? They haven't stated why.

partially wrong, so they are partially correct.  Right?  On "secure" consider that Bitcoins are not secure in themselves, the algorithm to verify them is.  You can still lose Bitcoins, or they can be stolen.  The user must take steps to make them secure, and this also applies to anonymity.  I believe this is what they mean.  

Some of the points raised suggest more than a passing interest, with more thought than many I see in the community.  How many are considering the consequences of a few more generations of ASIC miners - like centralised mining and blockchain nodes?  And what is going to be done to address the block size limit?

[Lauda]

partially wrong, so they are partially correct.  Right?  On "secure" consider that Bitcoins are not secure in themselves, the algorithm to verify them is.  You can still lose Bitcoins, or they can be stolen.  The user must take steps to make them secure, and this also applies to anonymity.  I believe this is what they mean.  

Some of the points raised suggest more than a passing interest, with more thought than many I see in the community.  How many are considering the consequences of a few more generations of ASIC miners - like centralised mining and blockchain nodes?

Well I was waiting for someone to make the completely incorrect. It depends on how you view it.
If not used correctly, nothing is safe right? Cash, banks, internet, anything pretty much? Correct?

Well that is a possibility, we can't know what is exactly going to happen by then.

[jellies]

The last point is the money shot:

" Perhaps Bitcoin, like the internet, will smoothly evolve from a quirky experiment to a trusted utility. But it could also go the way of Napster, the trailblazing music-sharing system that pioneered a new category, but was superseded by superior implementations that overcame its technical and commercial flaws"

I've never read in ALL the bitcoin wikipedia material any argument that clearly shows why bitcoin is less like Napster, or myspace, or friendster (or even Hanging With Friends or Candy Crush), and more like THE crypto currency (not A crypto currency).

First mover advantage: check
Growing user base: check
Motivated distributed unpaid team: check
Motivational leader: check (although absent)
Competitors: check
Baked in design choices: check

Bitcoin is like a stock that is pricing in 10 year plus of market domination, it is acting like it will be THE crypto currency. As a cold store of value rather than a currently useful medium of exchange that would be very highly speculative.

[Lauda]

The last point is the money shot:

" Perhaps Bitcoin, like the internet, will smoothly evolve from a quirky experiment to a trusted utility. But it could also go the way of Napster, the trailblazing music-sharing system that pioneered a new category, but was superseded by superior implementations that overcame its technical and commercial flaws"

I've never read in ALL the bitcoin wikipedia material any argument that clearly shows why bitcoin is less like Napster, or myspace, or friendster (or even Hanging With Friends or Candy Crush), and more like THE crypto currency (not A crypto currency).

First mover advantage: check
Growing user base: check
Motivated distributed unpaid team: check
Motivational leader: check (although absent)
Competitors: check
Baked in design choices: check

Bitcoin is like a stock that is pricing in 10 year plus of market domination, it is acting like it will be THE crypto currency. As a cold store of value rather than a currently useful medium of exchange that would be very highly speculative.

No it won't go the way of Napster. Start believing in Bitcoin, you're hands are weak.