Why I Avoid Bitcoin

Cryptocurrency is all the rage these days.

For the most part, count me out.

It’s not that I like fiat currency. Far from it!

Bitcoin in particular has a looming problem.

There are a lot of computing assets deployed these days solving mathematical problems in order to add blocks to blockchains. Those machines solving problems for the Bitcoin blockchain are occasionally and somewhat randomly rewarded with a Bitcoin. But the total supply of Bitcoin will be 21.0 million bitcoins. There are currently 18.7 million already “Mined.”

What happens when the final 2.3 million Bitcoins are issued? I’m given to understand machines worldwide dedicated to these blockchain-solving tasks draw a rather phenomenal amount of power. Who is going to leave their machines running to keep Bitcoin’s blockchain going, and continue paying the electric bill for them while certain they will be receiving no reward for doing so?

My guess is that a lot of the computer hardware currently purposed for mining Bitcoin will be re-purposed for mining other cryptocurrencies. Fewer assets adding to Bitcoin’s blockchain will result in lengthy transaction times, which will push the utility of Bitcoin down.

I do not see how Bitcoin will maintain its current price.

I suspect within a few years humanity will have adopted the good aspects of blockchain and will have moved on to proof-of-stake cryptocurrencies or beyond.

Bitcoin will always be around, I don’t doubt. It will end up being regarded as a sort of nostalgic quasi-non-fungible-token (quasi-NFT) or proto-NFT.

Prepare accordingly. That way we as a society won’t feel like we have to bail out yet another group who was left holding the proverbial bag when the market fell out from underneath it.

This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.