1. IT'S A DECENTRALIZED CURRENCY
Does this even require any explaining? Do you honestly think that the current financial system that controls Trillions of dollars in the current global economy, is going to give up their power to some guy Guatemala because he ran he's 1990's computer the first year of Bitcoin.
Yes, because for the first time in history wealth cannot be seized at gunpoint. Being that governments and their cronies legitimate their rule through force and coercion, they will be rendered impotent by the incorruptible nature of block chain technology. The 1%, whether free market entrepreneurs or political entrepreneurs, will always look for the best safe havens from government seizure. Block chain tech provides the most efficient solution for everyone.
2. CENTRALIZED MAIN DEVELOPMENT
Basically the “official” releases come from the Bitcoin Foundation. The development is pretty much centralized. Even if people fix everything wrong with Bitcoin, the foundation makes the final decision on what to include in it's next version on it's own priorities. This is basically all run by “Gavin” who caused Satoshi to disappear after he decided to meet with the CIA. The same guy who has not addressed any of the issues going to be discussed below for the whole time he has been in control. Whether by accident or on purpose is not the point. The point is the main trusted Bitcoin client is controlled by one entity, and everything they say, do, or don't do goes.
I agree that bitcoins development is both too centralized and too conservative at this point. There are better solutions than bitcoin and I believe that the network effect is dwindling.
3. FLAWED ARCHITECTURE
Size
11 GB today.
100 GB 1.5 years from now
1 TB 3 years from now
10 TB 4.5 years from now
100 TB 6 years from now
1 PB 7.5 years from now
10 PB 9 years from now
100 PB 10.5 years from now
You think average people will store a 100TB worth of data? No. The solution cut the blockchain into pieces and store the whole blockchain only on specialized nodes, kind of defeats the purpose of decentralized than doesn’t it?
Thats the point of light weight clients. You don't need millions of full nodes to perform the redundant task of storing transactions. You just need a fair amount of trusted full nodes.
Double Spends
Double spends are already occurring, and have occurred since over 1.5 years ago, and it will only get worst as time goes on, and bigger merchants and higher ticket items come online the then you will really see the “bad pool operators” start to take advantage of this.
Nobody is going to double spend on a cup of coffee, nobody is going to commit fraud for small amounts, well at least not in person, but they will for big ticket items.
There are proof of stake solutions, such as
Delegated Proof of Stake (DPoS), which make double spending almost impossible.
Slow Speed
Waiting for a transaction to fully confirm, is not feasible for day to day transactions. Yes let's hear the Credit Cards take 180 day confirms. One no they don't they confirm instantly, the money is just on hold for 90-180 days if the merchant sells a crappy product and refuses to honor warranty or remedy the issue. If it's fraud, say someone uses someone else card to buy something, the money does not come out of the merchants account, the credit card company takes the hit. Secondly, most important the buyer pays and gets his goods immediately, unlike Bitcoin where they have to wait for a few confirmations to be sure.
Delegated Proof of Stake allows for secure transactions of 10 seconds and under which is why BitShares X can function as an asset exchange comparable to centralized crypto exchanges.
DPoS has also been proven to work as efficiently and securely under 2 second block production.
Un-Scalable
Bitcoin can barley handle a few hundred thousand transactions a day, what happens if the transactions grow to 10 Million, 50 Million, 100 Million which are all still relativity small transaction numbers compared to the 6 Billion people in the world. It simply can't handle it.
The truth of the matter is that block chain technology is scalable, mining is not... If you put a blockchain on a central server and handled visa's level of daily transaction volume it probably wouldn't cost more then $50k a month. The more nodes you add to the server the greater the cost of processing those transactions but the greater the level of decentralization. The purpose of decentralization is to create a system than has no central point of failure or control. Once you reach the threshold at which that condition is met (obviously there is not set metric for this) the marginal cost of adding full nodes to both store and process transactions exceeds the marginal benefit. With bitcoin the cost associated with mining unnecessarily increase the cost of processing transactions to the point that the threshold at which the marginal cost of additional nodes exceeds the marginal benefits is much lower for Bitcoin and other POW systems than POS systems, and ulimately results in greater centralization and greater cost.
Given the DPoS design, blockchain solutions can easily provide a payment network that scales globally better than visa and certainly better than Bitcoin. Currently Bitcoin pays out ~$500m to miners to process less 1 tps. A DPoS system would be able handle visa 2,000 tps load at 1% of that cost.
51% Attacks
51% attacks which don't have to be 51% of the network, as they can do it with far less hashpower, such as ghash.io 29% the two biggest pools combined make up over 51% of the network and can literally destroy Bitcoin at any second. It doesn't even need to be the pool operators, it can be hackers who take over the pools.
If you understand distributed consensus this isn't really an attack. But certainly Bitcoin is more vulnerable to arbitrary control than other blockchain solutions.
Unstable Exchange Rate
It can never be used as a sole currency to replace all other fiat currencies. Why? Because it's price is unstable. It must always rely on another fiat currency to have any sort of monetary use, no merchant is going to transact when the price of the currency fluctuates 50-200% a day. The only way to stop this is to have actual control of the currency and adjust creation. '
This is why bitUSD is crucial. A decentralized and cryptographically secured fixed income security is what the worlds been looking for. Not to mention bitUSD provides interest with a yield of 5-10% a year. I don't think we have to worry about unstable exchange rates anymore.
4. NO BENEFIT OVER FIAT
With everything mentioned above it shows that Bitcoin has no real advantage over fiat for 99% of the people in the world. You can't pay your bills or general living expenses in it, can't buy much with it. It's slow, not consumer friendly, as once a payment is sent there is no charge back method. Guess what 90% of the world are consumers not merchants. If Bitcoin doesn't appeal to the regular consumer who buys goods from merchants it will never succeed. Even if it succeeds it's doomed by it's very architecture which can't handle the success.
The only use it has, is sending small internationally pretty quickly, which then again gets converted to fiat for people to actually use. What market is there for small international payments 5-10% of the world?
No entity would trust high sums of money to be transferred with Bitcoin with all of it's flaws. Want to know how right I am and how wrong you are? Bitcoin has about 3 million users in a 5 year period. Facebook in that same time had what? 600M-1 Billion users.
Not to mention by the time, I have opened 10 accounts just to buy and convert Bitcoin, I could have swiped my credit/debit card 1000 times.
Benefits of Digital Securities over Fiat
- can be transferred globally in less than 10 seconds
- fees are not a percentage of the transactions but rather a fixed amount (blockchain tech can handle visa txn volume for ~$5mil as opposed to ~$11bn - a savings of 99.95% to merchants)
- cryptographically secured - can't be counterfeited or seized
- financial system thereby becomes more secure, more transparent, more efficient and (given the design of BitShares X) more collateralized.
