Bitcoin Is Here To Stay And Will Dominate The World
Many people, even the most respected in the space say that Bitcoin is still an experiment and that it can fail. I don’t agree on this, I think Bitcoin has grown to a point that it WILL survive and WILL conquer the world. In my opinion it is as obvious as math: Indestructible + decentralized + network effect + game theory = world dominance. There simply is no other outcome, only the amount of time it needs to reach this point is a question mark.
How can Bitcoin fail?
Asking the question if Bitcoin can fail is like asking the question if internet can fail 15 years ago. Everyone would answer yes, but that is more because of lack of understanding, joining general consensus and because people are extremely fearful for the ‘unknown’ future.
Today everyone would say that the internet is here to stay, nobody would be able to come up with a likely scenario that makes it fail and previous events like the ‘millennium problem’ look like dumb FUD today. I think in 15 years we will think exactly the same about Bitcoin.
Peter Thiel is bullish on Bitcoin, but thinks that the chance that it fails is bigger than the chance that it goes up…….I don't agree!
So what scenario’s could possible destroy Bitcoin?
A technical failure or attack
A technical failure or attack will harm Bitcoin and delay adoption, but it won’t stop it. When a bug appears or an attack is successful in the way that it is threatening the Bitcoin network, a fix will be created and there will be 100% consensus to hardfork immediately because all players will lose money if they don't. Even if the bug / attack is so bad and overwhelming that the network already got destroyed, code can be created to fix the cause the network can be relaunched using a snapshot of the last block.
Government ban
Government regulation can cause big delays and price drops but won’t stop it either. The China ban last year was a great example. The price tanked but the Chinese population is still using it. When one government bans bitcoin their citizen will buy in another country or on peer to peer market places using VPN.
https://cointelegraph.com/news/how-chinese-bitcoin-buyers-are-getting-around-government-ban
Even one of the strongest governments in the world can't ban Bitcoin
Even if all governments of the entire world ban it (will never happen, game theory again) people will still use it and an underground infrastructure will be build what makes it only stronger. Banning Bitcoin is as hard as banning marihuana, people will grow / mine it on secret places and it will be smuggled over borders (is way easier with Bitcoin).
Electricity and internet shut down
In a really unlikely doom scenario governments can switch of the entire power supply or dismantle the internet, an EMP could cause the same effects but will not be global. Firstly, new internet connections can be made by individuals (In Egypt Anonymous members set up their own internet after the government shut it down) and solar power can be used.
Even without internet Bitcoin can still be used over satellite, sms and even radio waves. Bitcoin users can still make transactions by using a solar power and a satellite dish!
You can connect to Bitcoin with the Blockstream satellite service!
A better technology overtakes it
Many think a better cryptocurrency can overtake Bitcoin, I really disagree on this. I think the network effect as described later is extremely strong and even if the tech is way better, it will still more easy to implement it in Bitcoin than to recreate the entire network effect. Better tech will be implemented in 2nd layers or forked into the code.
If you know another possible scenario, please mention it in the comments!
The network effect is huge
I think many underestimate the network effect. In the last bull run we saw many coins make a 100x return because they ‘are better than Bitcoin’, but now they are all punished hard, it was all hype. Tech that can do everything perfectly, at scale and decentralized simply doesn't exist without tradeoffs.
Trace Mayer, one of the most intelligent people on earth explaining the 7 network effects
Bitcoin has 7 network effects that all add to each other and accumulate the effect. No single other coin is even coming close, new tech will get a harder and harder job to get there. Most probably the next phase of adoption will be adoption by central banks, governments and wallstreet and they will buy Bitcoin and position it even better.
Good money will replace bad money, Bitcoin’s destination is obvious
The current financial system is heavily flawed and Bitcoin will bring solutions for almost all the problems. People will use what is best for them and by moving to Bitcoin they will increase the value, infrastructure and network effect as well.
The legacy system will get worse and more expensive, because governments and banks will lose money and come up with more regulation to keep it alive. The divergency between the good and the bad system will increase and the flow of users will follow suit. When a tipping point is reached it will accelerate and world dominance is a fact!
They call it hyperbitcoinization, I believe it will happen!
hyperbitcoinization described by Nakamotoinstitute
Things that were not imaginable a few years ago are a fact today. Things that are not imaginable today will be a fact soon!
When I started with Bitcoin in 2014 the bullish scenario was more adoption by merchants and users. Property to be sold for Bitcoin and counties to legalize it was unlikely at that time. Wallstreet coming in was an unrealistic dream and governments and banks coming in was the real jackpot. Bitcoin as a world reserve currency was really unthinkable back then.
Today multiple counties fully legalized Bitcoin and property get sold for it. Wallstreet is coming in and central banks and governments are at a point that they will soon enter too (if they didn’t secretly yet). Becoming a world reserve currency is still unlikely today, but I think we will be positive surprised again!
Conclusion:
I think many call Bitcoin still an experiment and advise to be careful because it can still fail because of fear for the unknown future and politic correctness. I don’t see how it can fail, and when it doesn't fail the future is obvious when you understand the game theory that will play out.
I think Bitcoin will be as disruptive as the internet and will disrupt the entire financial system as the internet did with many industries in the past. In my opinion Bitcoin is heavily underestimated because only a few really understand the properties and will be the dominant currency sooner than anyone expect!
Disclaimer
This is no trading or investment advice, just my view on the market.
Store your Bitcoins secure:
ledger
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Bitcoin to volatile? Diversify to gold stored in Singapore and pay with Bitcoin:
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I'm betting on bitcoin simply because the new generation has had enough of corrupt bankers and politicians perpetuating wars and fleecing people of their savings via inflation and graft.
True, Bitcoin can never really fail completely - but it can become much less significant than what it is today - and that is a failure. So, yes, I am one of those believing that that Bitcoin is still an experiment and that it can fail. It most likely won't fail tomorrow, it most likely won't fail next month, not even next year, but ... will Bitcoin have any significant position in 15-20 years? I seriously doubt so.
For me personally, Bitcoin has already failed. Bitcoin started failed already late 2016, as significant Bitcoiners started saying things like "Bitcoin is not for coffee purchases", "Bitcoin is a store of value, not a payment framework", and particularly "Visa and Mastercard works just perfect for payments". I had become a bitcoin trader by then, but I more and more started feeling disfranchised from the product I was selling.
I paid my eldest son with bitcoins for going out with the garbage - now I'm paying my younger son with physical coins and cotton-paper bills issued by our national bank for going out with the garbage. Yes, Bitcoin has failed. Right now Bitcoin works very well, but we have had big capacity problems in 2017 and in parts of 2016 as well, with Bitcoin transactions being unreliable and costly. The problems haven't been solved much, the most significant reason why bitcoin works out excellent at the moment is that the transaction volume has been reduced. Once it picks up we'll have problems again.
Bitcoin has many flaws, and in the long run I believe it will be better to support some technology designed and implemented from scratch rather than keep building on the Bitcoin protocol.
The biggest of all the flaws is the 1 MB block size limit. Well, it isn't really a flaw, it was not meant to be a permanent feature of Bitcoin. At some point someone has managed to plant the idea that this limit is one of the defining features of Bitcoin, at the same level as the 21M coin limit. The truth is that the 1 MB block size limit, when left unchanged, is a capacity ceiling making it impossible for the masses to adapt Bitcoin and start using it as it's meant to be used. Bitcoin adoption has been great from the end of 2016 and until now - but this adoption is 100% due to speculators buying Bitcoin in the hope that the value will grow even more, and they don't keep the bitcoin in personal wallets, they keep their bitcoins on exchanges.
Now on the "2nd layer solutions" ... we've had "2nd layer solution" around for a long time already and it has become massively successful, much more successful than Bitcoin transactions. Forget about Lightning, forget about Sidechains - the "2nd layer solution" is trades and internal transfers on exchanges. Balance changes in a proprietary database, not much unlike what's happening in the banks. I have big hopes for the Lightning network, but it will take many years before it eventually will dominate, and even when it will dominate the need for more transaction space will not go away.
I strongly believe we'll get some kind of a "flippening" at some point, and from then Bitcoin will just lose significance. I seriously hope that the new crypto currency becoming the significant one will be a good coin, but I'm concerned bankers will manage to launch some kind of "digital currency" and, with the support of national banks, plebs and politicians will become the dominant coin.
Yes, the network effect is very important - but for one thing, in the grand picture, Bitcoin is still a quite insignificant thing. Some analogies:
The PGP standard from 1991. It's a big, big shame that most email communication as of today still goes in plain text and unsigned. Despite being a dinosaur lacking a lot compared to modern encryption schemes, PGP is still probably the best way to encrypt emails. Bitcoin has probably become bigger than PGP already, but still it's not big enough. People have given up on PGP because even for those having PGP it's easier to send unencrypted emails. Similarly, if the will come up with more-easy-to-use-and-bigger-network-effect alternatives to Bitcoin there will be a very low incentive for the regular plebs to use or support Bitcoin.
The IRC-network - once THE standard for internet chat - it fragmented quite the same as Bitcoin has fragmented over arguments on how to continue the protocol development. We had the Great Split in 1996, and commercialized proprietary silo builders quickly took over the scene.
Facebook - remember, they were not the first on the scene when it comes to "social networking" - there were other services having the network effect before Facebook wiped them out.
Coinmarketcap does some effort on tracking the "bitcoin dominance". Bitcoin was totally dominant until March 2017 - always staying somwhere between 75% and 95% - but then it started dropping. In June 2017 for a short while it dipped below 33%, and it seemed like Ethereum would take over the market cap. But, the network effect was still not there - Bitcoin bounced back, and by some point in early December 2017, it was around 60%. However, the problems with Bitcoin haven't been solved - not at all - and the Ethereum network effect has been growing in the meanwhile. Bitcoin dipped back to below 33% for a longer while in the beginning of 2018. Bitcoin is on the way back up again now, while there are no capacity problems - almost 45% now. My prediction is that it will grow past 50%, but never again above 60%, and in the next slump it will go below 25%.
You could be right about never going to 60%. When Bitcoin adds smart contracts it will take some percentage off of ETH.
That was a great post ! Well worth a resteem :) I also see that BTC cant fail unless the doomsday arrives, which is the only likelyhood of actually all crypto and peer to peer markets failing. Great information about being able to still use btc if they stop electric and interent, but even better things like Earth Batterys or salt water batterys are easier than solar panels :)
Thankyou for adding that TorVpn, if you have a referal link then ill use that when I buy the Vpn.. Ive been looking for a simple one to pay with crypto :)
I think bitcoin and alts are the future because if you think about the technology behind them you can use in almost any bussines and in my opinion that's the real deal around blockchain technology. Regards
this result is what keeps us monitoring the next bitcoin results, hopefully quickly crawl up, thanks a lot of very good post.
It all comes down to belief and confidence. If those things propped up fiat for so long, they can propel cryptos and at this point, what would be easier to believe in and have confidence in that Bitcoin...for all the reasons you stated. Upvoted and resteemed. Great article!
Bitcoin will for sure have a future, but still lots of hurdles have to be taken.
It can only be used when the volatility will decrease.
Persons don't want to become the next pizza guy after purchasing something with Bitcoin, while the seller of the good or services doesn't want to take the risk, that the BTC he received could have a decrease in value of 10 to 15% the next day.
In the things that could destroy bitcoin, I do think that you forgot the scams related with ICOs and cryptocurrency, the Binance hack (we all know that Binance wasn't hacked) and so on. We, involved in crypto, can give this a place, but the people who aren't can't. It will set back the perception.
Just like the perception of self driving car got a huge dip after the fatal accident earlier this week.
Yep, BTC will survive and will be globally adopted but maybe not with the speed we expect and I doubt it if it ever will be used as a currency today!
Only one question...
WHEN MOON?!
One of the main reasons bitcoin is here to stay is because the legislation being passed right now makes it one of the only crypto's that can function as the on/off road from crypto to fiat.
And you still need fiat to pay your taxes. :(
I invested in several Alt-coins for the very first time in last december and now I am in more than 60 percent loss.. crypto is like a nightmare to me..
Don't sell. In my (untrained, uninformed) opinion, the market will come back in a big way. Just a matter of when.