Three reasons why Bitcoin is dead as a form of currency
There are three very basic flaws with Bitcoin and unless all three can be overcome, Bitcoin is dead as a form of currency.
- It is rediculously expensive to use as a form of currency from the end user side of things. As of December 15th 2017, if you want to spend any amount of Bitcoin and expect that transaction to actually go all the way through to the destination, you can expect to pay a minimum of 0.63807 mBTC (or about $11.00 US Dollars on this date). Yes, that cup of coffee you wanted to buy that would cost you $3.00 cash or credit card is going to cost you a minimum of $14.00 due to the exorbanant transaction fees. And those fees just keep going up every day.
- The system is insanly expensive in computer processing power and network bandwidth. There is so much data moving around the network that it is little more than noise and every person in the network is paying for that. They pay for the electricity to keep the computers running, they pay for the Internet and loss of bandwidth for other things. It is simply staggering. A rough estimate based on the traffic I have seen moving through my system for the past month put my usage at well over 200 gigabytes of data sent out and about 20 gigabytes that has come in. The drive space is not too bad but even with the massive drives in today's computers, setting asside 160 gig (and growing daily) for this data seems downright stupid if you aren't making money with it. Look at this snapshot I took from my monitoring tool showing how much bandwidth I have actually used after a server restart only 26 1/2 hours ago and the projections of what will be used.
- There is very little (if any) money that can be made through the mining of Bitcoin any more unless you are a mega miner with hundreds of thousands (if not millions) of dollars of equipment dedicated to mining. And if you are in a location with expensive power, forget it. The cost of mining will be so high you will not be able to make any decent return.
So you ask, why the craze right now over Bitcoin?
The fact is, no one is really spending Bitcoin. What is happening is people are buying in and waiting for the price to go up then selling. Some people stay in for a long time, others bail out frequently. But with all the fees and costs involved, the small investor simply cannot make any money. And there is no real good way to actually spend Bitcoin unless you are making very large purchases. If the purchase is large enough then the transaction fee is not a problem. You see the fee is tied to the amount of data that makes up the transaction and has no relation to the value being moved around.
I simply can't see any way for Bitcoin to ever be taken seriously as a form of currency without these three issues being fixed. (maybe others as well)
Here are a few YouTube videos that you may enjoy on this subject: