Outside of the BTC echo chamber... 3 ways Bitcoin COULD ACTUALLY FAIL!
Let me start by saying that I'm a huge fan of Bitcoin, lots of other alt coins and the blockchain technology in general. I think that this is a revolutionary idea and the technology will change the socio-economic landscape of this world forever... However, following Ray Dalio's advice, it's important always to ask yourself "What do I NOT know??"...
Here is a quick look into some possible ways that Bitcoin (BTC) could fail (even if I don't want that to happen!) and leave the entire crypto-currency community with a massive hole in its chest.
1 - Government Interventions
Before you start screaming that Bitcoin can't be stopped and that you would need to stamp out every single node in the world to stop bitcoin, let's just look into the economics of it all for a second.
That statement is true: Bitcoin cannot be "stopped" but that doesn't can't be slashed by 90+%... If the USA, EU, China and a few other big players just straight out outlawed USAGE of cryptocurrencies or even just bitcoin, then you and I would most probably keep on using them. Who gives a fuck, catch me if you can. The reality of the median citizen, however, is that they just simply won't go near it. Most people don't want to "break the law" even if that law is stupid. They can already buy gold and use their credit cards, so why risk it? Remember that we are the early adopters and a lot of us are mavericks.
The price of BTC at the moment includes the expectation that this will eventually be mass adopted. Take that away and suddenly we'll see a crash that dwarfed 2014.
2 - A down and out Bitcoin fork takes over as the main Bitcoin (BTC) chain
Let's take BCH as an example. A month or so after the BCH fork, some dude wants to buy bitcoin. Off he goes to coinbase and makes his purchase. Imagine the scenario where the up and coming Segwit 2X fork gets real nasty and BCH just shoots up while the other Bitcoin chains fall. Suddenly the cries of BCH being the "real Bitcoin" will get a hell of a lot louder. So the exchanges change it to the "official Bitcoin"...
What does that mean to newcomers to the market? I can buy Bitcoin for thousands of dollars per coin and then some "fork" that I didn't even know about can replace the currency/commodity that I bought and now I'm left with some "Alt coin"... What is that shit!?!?
That is what we call a cautionary tale and it would be a massive red light to prospective investors.
3 - A better store of value digital currency hits the scene
I can't tell you what that looks like because it most likely hasn't been invented yet.
Is Bitcoin fantastic? - Yes.
Is it perfect? - No.
Is there room for a decentralised digital currency that deals with upgrade disputes in a better way than Bitcoin, that allows you to recover lost keys, that is more government friendly, that has minimal scaling issues, that doesn't develop large mining pools??
Is Bitcoin's first mover advantage so great that even if some amazing digital currency was created, it wouldn't matter?
Who knows. Black Swans are impossibility... Until they're not.
OK, that's it for this post. Let me know what you all think. Why you think these could be or couldn't be valid causes for concerns... And if you think there are other threats to Bitcoin and / or blockchain based currencies / technology in general
Stay safe
I see One more reason for the breakage...
The Bitcoin Mining today has become a bigger challenge as teh difficulty in mining is increasing. Now if the difficulty is increased by one more zero in Block chain hash, then the amount of energy consumed to generate the block becomes expensive than the earning. So since it becomes not profitable for miners and only hard work and capital expense, if the Miners stop, then the Blocks added to chain will stop.. Also there may be other reasons like, Global warming, Carbon footprints may be raised after a while, which may lead to decline.,..
If to sideline this, they start making the challenges of Mining simple, then Miners will generate huge money and this may inturn make BTC to lose value.. SO next level of difficulty must be harder than the present level or may be as Hard as this level.. That may be done by adding 1 in place of 0... Now how will it be done is the question... But Global warming is the question which will not be answered, as the mining machines drink up HIgh amount of Power and decepate it as Heat into the atmosphere... This can be dangerous... Unless a new system(Other than HASHING) is found for Bitcoin Blockchain Ledger, this global warming mechanism may derail the whole process..