What are the most convincing arguments against Bitcoin?

[MoonShadow]

It's to do with the blocksize limit - currently all blocks can only hold a maximum of 1MB of data. I'm told by smarter people that it would require a hard fork to remove or otherwise change this limit. Given average time to generate a block as 10 min, and a minimum transaction size of ... whatever-it-is bytes, that works out to 7 transactions per second.

If the blocksize limit were increased, or removed altogether, we'd get the blockchain increasing at an even faster rate than it already is, but that may or may not be a problem depending on how storage hardware develops, and how drastically we implement 'pruning' solutions or lightweight clients. I'm told there are also economic reasons why a limited block size might be a good idea but I don't know what those are.

This isn't true as of yet, since most blocks are not full as of yet.  The greater limiting factor seems to be Gavin's Cost; a theoretical risk of loss from including each additional transaction that Gavin Andreson estimated to be around .00033 BTC per KB of transaction size.  This number will naturally change over time, due to many variables, but efforts are underway to significantly reduce this cost per transaction in order to encentivize miners to include more transactions into the block.  The same effort will also improve the average transaction rate.

[AnonMZ]

I'm not talking about the short-term, not the medium-term, but the long-term.

What are best arguments that Bitcoin won't last?

So far I'm convinced by the pro-arguments decimating the con-arguments. But what if there are some damning arguments out there?

Please try to present them, and please present the prerequisites for why those arguments could be valid.

Bitcoin is totally dependant on electricity. EMP everything and Bitcoin is gonne. It makes no difference
if there are blockchain, private key and wallet backups (even those carved in stone make no difference),
unless there is electricity there will be no Bitcoin. I know many here will argue that electricity would be
restored at some point but question remains if that would really happen and if it does if there would be
any use for Bitcoin at that point in time.

I also understand that many here can't even imagine electricity not being available but I'll tell you that
it can happen, and it can happen very fast. I've witnessed myself how fast a normal situation can turn
into chaos, when there are issues much more important than months-long lack of electricity.

Total blackout, is a rather extreme case, yes it could happen, (EMP, CME X class, circa 1859 etc). Then, does it really matter? Any and all fiat currencies will collapse. Will the ATMs be operational?
Will the banks have access to people’s accounts? The most likely currency in such a case, would be water, food, fuel, guns, ammo, other resources, and maybe gold, silver. People would be in survival mode and instinct response.

In the mean time, a concern would be the block chain size (for most of the people who want the original most secure client/wallet), and of course the time to get confirms, some take hours!
Time will tell.

[Zarathustra]

I'm not talking about the short-term, not the medium-term, but the long-term.

What are best arguments that Bitcoin won't last?

So far I'm convinced by the pro-arguments decimating the con-arguments. But what if there are some damning arguments out there?

Please try to present them, and please present the prerequisites for why those arguments could be valid.

Bitcoin is totally dependant on electricity. EMP everything and Bitcoin is gonne. It makes no difference
if there are blockchain, private key and wallet backups (even those carved in stone make no difference),
unless there is electricity there will be no Bitcoin. I know many here will argue that electricity would be
restored at some point but question remains if that would really happen and if it does if there would be
any use for Bitcoin at that point in time.

I also understand that many here can't even imagine electricity not being available but I'll tell you that
it can happen, and it can happen very fast. I've witnessed myself how fast a normal situation can turn
into chaos, when there are issues much more important than months-long lack of electricity.

Total blackout, is a rather extreme case, yes it could happen, (EMP, CME X class, circa 1859 etc). Then, does it really matter? Any and all fiat currencies will collapse. Will the ATMs be operational?
Will the banks have access to people’s accounts? The most likely currency in such a case, would be water, food, fuel, guns, ammo, other resources, and maybe gold, silver. People would be in survival mode and instinct response.

There will be no more currency without electricity. All nuclear plants will blow its inventories into the atmosphere and people wouldn't be in survival mode, but in death mode.

We watched the tragedy unfold
We did as we were told
We bought and sold
It was the greatest show on earth
But then it was over
We ohhed and aahed
We drove our racing cars
We ate our last few jars of caviar
And somewhere out there in the stars
A keen-eyed look-out
Spied a flickering light
Our last hurrah
And when they found our shadows
Grouped around the TV sets
They ran down every lead
They repeated every test
They checked out all the data on their lists
And then the alien anthropologists
Admitted they were still perplexed
But on eliminating every other reason
For our sad demise
They logged the only explanation left
This species has amused itself to death
No tears to cry no feelings left
This species has amused itself to death

http://www.lyricsdepot.com/roger-waters/amused-to-death.html

[AnonMZ]

In the mean time, a concern would be the block chain size (for most of the people who want the original most secure client/wallet)

Cry babies.

Even a decade old computers have enough HDD space. Some games require more GB than Bitcoin. Copy
few DVDs on your HDD and you already used up more GB than Bitcoin uses. Seriously, out of all reasons
against Bitcoin posted here blockchain size is almost a non-issue.

First, it would be much appreciated if you keep your offensive labeling remarks (Cry babies)to your self. No one attacked you personally.

Second, the block chain now is a true issue. It takes over 3 days to download and install the client - as of a couple of weeks ago- and that is NOT because of HDD space, inet speed or computing power or RAM. (syncing also takes considerable time if you skip a couple of days) Try this for Grandpa, Grandma, Dad, Mom and so on. 5-6 wallets in a household, it is a bit discouraging, as I said it is a concern at least for now.

If that is fixed in the future than it’s ok. But now it is a drawback for the average person trying to get into it, using the most secure client/wallet. Also as I noted above some confirms take over an hour for the first, and that is another drawback.

Let’s keep the discussions civil.

[Anon136]

Investment in mining hardware leads to logarithmic improvements in hashing efficiency rather than more desirable linear improvements. So for example 10 billion dollars invested in infrastructure to produce asics will lead to way more than 10 times as much hashing power as 1 billion dollars invested in infrastructure. This coupled with that fact that IC fabrication is potentially the best example of natural monopoly to ever exist, means that no one will ever be able to produce chips even 1/10th as efficient as intel or amd and there is simply no room in the market to create a robust array of companies that operate on the economies of scale of intel or amd. This means that the government could, in theory, twist the arms of all of the COMPETITIVE asics manufacturers into installing back doors in all of the top of the line asics in the future.

there you go thats my best effort devils advocate argument against bitcoin.

This is very well put. This is what I was talking about earlier about ASICs causing centralization of the bitcoin.
And the fact of the matter is, all the major governments have a history of twisting the arms of companies for backdoors. See the snowden leak for the USA, while the rest openly admit it and say its for the greater good

+1 for good argument against Bitcoin. Is there anything we can do about it? As far as I understand distributed manufacturing of high quality chips is far behind the most advanced chipfabs.

Maybe there will be a big fab plant in china, the us, Russia and somewhere in Africa and so there would be a bit of a prisoners dilemma problem for each government. Maybe by that time bitcoin will be so big that it will be like the internet in that it will be bad for governments in certain ways but so ubiquitous that its not in their interst on net to crack down on it.

Really though i think the ultimate solution is going to have to come from an altcoin. This may lead you to think that bitcoin will have all of its market cap sucked up by an altcoin at some point in the future but that is not necessarily what it means. The mere existence of an altcoin that solves this problem could be enough to convince governments not to crack down on bitcoin because they would know that if they did all the capital would just flow into the altcoin and they would have spent a large amount of money to fundamentally change nothing. Meaning that even an amazing altcoin that solved this very real problem wouldn't ever be successful on bitcoins level and maybe bitcoin would continue to rise in value capitalizing on its network effects despite this flaw.

It is aslo, i think, worth noting that 2 altcoins have solved this problem. one at the cost of introducing new problems (peercoin) and one with a brilliant solution that does not involve new problems (NXT). It is also worth noting that perhaps governments would use this method to crack down on bitcoin and capital would flow into an altcoin that solved this problem. after all governments are less than notorious for their wisdom and foresight. I have a reasonable amount of resources invested in NXT for this very reason.

[Cryddit]

The arguments that worry me most, in order from most to least worry:  

1.  Scalability.  Right now we're configured to do a maximum of 7 and a half transactions a second.  In practice, most miners refuse to build blocks bigger than 250K because the slower propagation time of larger blocks means they risk losing the 25BTC block reward if another block spreads faster.  So in most blocks we can get less than 3 transactions per second.  Occasionally a miner willing to build a 1M block wins the race and we get up to 7 and a half -- for that block.  So far it's been enough to clear backlogs.  

Assuming they figure out how to handle more transactions, there is still a scalability problem with the data.  As the number of transactions per second grows, the rate at which the blockchain gets larger also grows.  The blockchain can already take more than a week to download and more than 15GB to store.  Multiply the current transaction rate by 100 (which is still nowhere near visa scale) and it will become literally impossible for ordinary people (read: in a P2P network that isn't centralized by being limited to a few servers with massive bandwidth) to download the blockchain faster than it grows.  At the same time, the space required to store 2 years worth of transactions would be growing to about 1TByte.  In the future faster hardware and bigger bandwidth may help -- but it may not happen in time, and by the time it happens the need may be even greater than we suppose now.

Finally, the size of the stored blockchain affects the startup time of a full client.  Not badly unless your machine is very slow, but in the very long run, it's hard to imagine going through 20, 50, or 100 years of transaction history every time you start up.

2.  Security.  People who keep gold or large amounts of cash in a safe in their homes don't live inside the safes. People who use secure computers to send and receive Bitcoin should not do their email and web browsing and GUI crap and insecure OS and gaming and automatic software updates and cell phone syncing and passwordless logins and file sharing and etc, on the secure computer.  Yes, that limits a secure computer a lot -- just like the living space inside of a safe is very limited.  

I despair of explaining this to Homer Husband and Harriet Housewife, but using Bitcoin requires having some kind of digital device that you treat just like a safe.  You don't live your day-to-day life inside of a safe. Also, OS support for being used as a 'safe' is increasingly hard to come by.

3. Transaction fee roulette.  It is flatly impossible to anticipate what you will need to spend on fees in a given bitcoin transaction.  Not only are the fees different depending on features of your own txout set that most people have no clue about, but they are also different depending on the semi-randomized selection of *which* txouts you'll be spending and how busy the network is.  With no way to anticipate fees, merchants can't set prices accurately.  And the fees are still too small to motivate miners (by comparison with the block award) while already too high to permit small (vending machine size) transactions.

[taltamir]

It is aslo, i think, worth noting that 2 altcoins have solved this problem. one at the cost of introducing new problems (peercoin) and one with a brilliant solution that does not involve new problems (NXT). It is also worth noting that perhaps governments would use this method to crack down on bitcoin and capital would flow into an altcoin that solved this problem. after all governments are less than notorious for their wisdom and foresight. I have a reasonable amount of resources invested in NXT for this very reason.

NXT makes a lot of claims, last time I checked it was a closed source project (that claims it will go open source "soon" TM) and doesn't explain the technical details behind HOW they supposedly solved it.

However, if it does I will dance a jig for joy.

[Anon136]

It is aslo, i think, worth noting that 2 altcoins have solved this problem. one at the cost of introducing new problems (peercoin) and one with a brilliant solution that does not involve new problems (NXT). It is also worth noting that perhaps governments would use this method to crack down on bitcoin and capital would flow into an altcoin that solved this problem. after all governments are less than notorious for their wisdom and foresight. I have a reasonable amount of resources invested in NXT for this very reason.

NXT makes a lot of claims, last time I checked it was a closed source project (that claims it will go open source "soon" TM) and doesn't explain the technical details behind HOW they supposedly solved it.

However, if it does I will dance a jig for joy.

You really have to dig around to find the technical details of how he solved it, its buried in the bottom of some obscure thread. And the code is still closed source so it is possible that he made a convincing facade rather than actually implement the elegant solution that he did conceive. However it doesnt seem all that likely since it would only be marginally more work to actually implement the solution than the convincing facade. Check out an article i wrote on it for a basic explanation of how it works, and the conversation i had with come-from-beyond for a technical explanation of how it works. Even if NXT is a total scam coin BCNext did solve this problem atleast conceptually in a really elegant way so its pretty exciting.

https://bitcointalk.org/index.php?topic=345773.msg4063478#msg4063478

[DirtyWilly]

1. Buying goods with Bitcoin decreases value as merchants immediately cash out.  New money doesn't flow into falling prices of Bitcoin.
2. Numbers aren't easily digestible.  Ever pay 0.004994321 BTC for a loaf of bread?
3. BTC is not deflationary.  Altcoins such as LTC extend the supply if adopted.

[Anon136]

1. Buying goods with Bitcoin decreases value as merchants immediately cash out.  New money doesn't flow into falling prices of Bitcoin.
2. Numbers aren't easily digestible.  Ever pay 0.004994321 BTC for a loaf of bread?
3. BTC is not deflationary.  Altcoins such as LTC extend the supply if adopted.

ltc != btc

[taltamir]

3. BTC is not deflationary.  Altcoins such as LTC extend the supply if adopted.

LTC is to BTC as Dollars is to Yen.

[DavidZ]

1. Buying goods with Bitcoin decreases value as merchants immediately cash out.  New money doesn't flow into falling prices of Bitcoin.

I know a merchants that don't cash out.

2. Numbers aren't easily digestible.  Ever pay 0.004994321 BTC for a loaf of bread?

0.004994321 BTC = 499,432.10 μBTC and what's and easier way of representing $499,432.10?

3. BTC is not deflationary.  Altcoins such as LTC extend the supply if adopted.

Whether or not BTC is deflationary will be determined by the market for altcoins. Capital may be mostly attracted to BTC and if BTC proves itself to be technically sound it will stay there.

[bryant.coleman]

1. Buying goods with Bitcoin decreases value as merchants immediately cash out.  New money doesn't flow into falling prices of Bitcoin.

People convert fiat to BTC, in order to purchase products. So this effect is neutralized.

2. Numbers aren't easily digestible.  Ever pay 0.004994321 BTC for a loaf of bread?

That is why an increasing number of merchants use the mBTC.

3. BTC is not deflationary.  Altcoins such as LTC extend the supply if adopted.

Actually it is one of the drawbacks of the LTC.

[luqash3]

jinni bitcoin is the future of money. Soon everyone will be using the bitcoins instead of dollars after all it is a great concept where Federal Reserve may not manipulate the market by printing money whenever he wishes to. In my opinion bitcoin shall glow in future in fact it is glowing even today. Just see how its prices escalated in short period.

[crunchynut]

main argument in my opinion: for me as an average joe, bitcoins don't improve my life in any way and don't open up new opportunities. they are hard to obtain and hard to spend. all i can do is to look at charts, gamble, get scammed, buy drugs or exchange bitcoins into other coins called litecoin or dogecoin. here and there you can pay for normal products with bitcoins but i already have a credit card and a paypal account which are much more convenient. i heard there is a deeper meaning behind bitcoin but it fails to reveal itself in a simple message that's relevant for me and my life. it's something about evil governments and money not being money. didn't get it as i am not so much into wearing teabags or tinfoil hats. one day the greed that's responsible for the rise of bitcoin will move to the next big thing and there won't be much left that's of relevance for an average person like me.

[beeblebrox]

Has anyone mentioned off-chain transactions yet? 

My guess is that they're not likely to be a problem for at least 6 reward halvings (ie: 24 years) but after 14 halvings (ie:56 years)  I would expect them to have already started impacting the hash rate and thus blockchain security in a major way.  That is, somewhere between 6 and 14 halvings total payout (block reward + transaction fees) in equivalent fiat at today's dollar value for mining a block will peek and start decling thus causing a peek and decline in mining.

[Coin_Master]

money is working well for average citizen and for the economy. only criminals NEED to use bitcoin. they earn a lot. the ebthusiasm of bitcoiners makes criminals rich. u want that to be tbe basis of a new financial order?

edit the idealism and the greed of innocent bitcoiners make criminals rich.

What criminals are you referring to? The guy that drinks too much alcohol on his way home from work and then drives his car when he shouldn't.  We could call him a criminal, does he 'NEED' Bitcoin? Not likely.  Perhaps you are referring to the South American Drug Lord exporting millions of dollars worth of Cocaine into the United States every day, chances are he has never even heard of Bitcoin, so it cannot be him you are referring to.  Maybe you are talking about the Silk Road scandal?  No it can't be that, because that matter is still before the courts (innocent until proven guilty and all...) unless you have a magical crystal ball that lets you see the future.  Not likely.  So I am at a complete loss to understand how you can make that assumption, upon what factual basis do you make such claims.  Has there ever been a verdict handed down by any court in the world that linked Bitcoin with a crime? Ever...?
We need look no further than the Drug Enforcement Administration of the United States of America for statistics on how often 'money' (as you put it) is used in criminal activity's every day.  According to the DEA's own website more than 212 billion dollars in illegal narcotics was sold in the US last year alone, all done with cash.  Should we get rid of money?  As for your comment that 'money is working well for average citizen and for the economy', try telling that to the people all over the world still suffering from the affects of the 2008 Global Economic meltdown.  Unemployment (U-6) is at 14.3% in the US, and in some countries in Europe it is even worse, Greece has an unemployment rate of 27.4%, try convincing someone from Greece that 'money is working well', good luck with that.  The truth is our leaders failed, the banks failed.  If we leave the creation of money in the hands of those that have demonstrated failure in managing the most important aspect of our lives, we let ourselves down.  This cannot be allowed to happen again. Bitcoin is our response.

[nodroids]

The problem with Bitcoin, if it's used %2 as much as the USD for drug lords, is that the CIA doesn't know how to take it's cut from the cartels in BTC. Plus the cartels might be able to hide some it's profits from the CIA so the CIA only gets %7 of the drug trade and laundering instead of %15.

[Bytas]

In the long term?

It's called a quantum-computer and it can make a bit be 0 and 1 at the SAME time, potentially solving any hash in a matter of microseconds.
So far, this still a theoretical thing, but scientists are working and getting closer on the concept.
If anything can destroy bitcoin at it's core, its that thing.

But that will not increase the amount of Bitcoins being generated. The rate of creation of new BTCs will remain unchanged. So this will only be having a minimal effect.

Except that every bitcoin adress whith a balance on it will be compromised and the owner of the quantumcomputer can use all those coins as if they were in his wallet. LOL
No problem here surely! Did you know that a keypair is created using cryptography as well?
Herpderp.

[MoonShadow]

In the long term?

It's called a quantum-computer and it can make a bit be 0 and 1 at the SAME time, potentially solving any hash in a matter of microseconds.
So far, this still a theoretical thing, but scientists are working and getting closer on the concept.
If anything can destroy bitcoin at it's core, its that thing.

But that will not increase the amount of Bitcoins being generated. The rate of creation of new BTCs will remain unchanged. So this will only be having a minimal effect.

Except that every bitcoin adress whith a balance on it will be compromised and the owner of the quantumcomputer can use all those coins as if they were in his wallet. LOL
No problem here surely! Did you know that a keypair is created using cryptography as well?
Herpderp.

Bitcoins are not under great threat by the develpment of a practical quantum computer.  They're not magic, Bitcoin is fairly resistant to quantum brute forcing already, and can be upgraded if the threat proves real.