If you Google the phrase: “How bitcoin could,” the search engine generates the following four things:
If you notice options one, two and four, you notice there’s not a lot of faith in the Google search world about the future of the digital currency. But there’s someone out there, it appears, that thinks bitcoin can change the world. Yes, somewhere out there, there’s probably the Gandhi of bitcoin who probably believes that.
But how bitcoin could fail is a very legitimate question, and one that even those who are entrenched in the bitcoin ecosystem may wonder about.
On the contrary, for bitcoin skeptics (or, as MPD CEO Karen Webster puts it: why everyone should “stop wasting brain cells on bitcoin”), there’s probably an endless list of how bitcoin could fail. It’s unregulated. Crime is its biggest use case and that makes banks really nervous. No one in the world thinks that a global currency is viable. People have the right to be private but not anonymous when it comes to transacting financially. It’s volatile. And lots of it has, ahem, gone missing.
And, now we have one cryptocurrency enthusiast sharing his vision for how bitcoin could — and likely will — fail.
Charlie Lee, the creator of Litecoin — another cryptocurrency in the market that doesn’t get a sliver of the coverage the bitcoin does — says that neither of the concepts are really here for the long haul. In an interview with CryptoCoinsNews, Lee breaks down his theories as to how bitcoin could meet its maker.
“Bitcoin could fail if there’s a bug in the code that totally destroys trust in it,” Lee said in the interview. “For example, if anyone can spend anyone else’s bitcoin. Perhaps, quantum computing comes out and breaks all of cryptography. This will kill the Internet and all of finance as we know it also. And we are not able to find a quantum-proof encryption and hashing algorithm to move bitcoin to.”
Hmmm … one bug? Scary thought.
While many financial services experts have ruled out the potential for bitcoin as a global currency, there’s still plenty of chatter in the industry about the impact bitcoin’s blockchain technology could have on moving money. While the conversations have been more focused on moving toward distributed ledgers and less about bitcoin’s blockchain (since the two are impossible to separate), bitcoin has remained a topic of conversation in financial circles.
At least for now.
The scenario for Litecoin to die is even easier, its creator says. And he says this knowing that it’s the second alt-coin following bitcoin. Bitcoin has been shaky enough in 2015, which doesn’t post much hope for Litecoin.
“For one, the Litecoin price crashes,” Lee said in the interview. “People get burnt and stop supporting Litecoin. Trade volume goes down. Prices crashes even more. Exchanges drop support for Litecoin.”
And then, in the very same week that Lee shared these thoughts, another big bitcoiner took to the blogging world to share his thoughts on the “bitcoin experiment.” Mike, a bitcoin developer and British computer programer, wrote about how bitcoin could fail.
“From the start, I’ve always said the same thing: Bitcoin is an experiment and like all experiments, it can fail. So don’t invest what you can’t afford to lose,” Hearn wrote in his blog.”
But then the kicker.
“But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins,” he wrote.
And he blames the bitcoin community for what he believes to be the failure of his once beloved digital currency. The decentralized digital currency, he writes, is controlled by few and is of a network that is “on the brink of technical collapse.”
“The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system,” he continued.
His post goes on to explain the science behind bitcoin’s “failure” as he calls it, and discusses how the community most involved is pretty much clueless.
“Bitcoin has gone from being a transparent and open community to one that is dominated by rampant censorship and attacks on bitcoiners by other bitcoiners. This transformation is by far the most appalling thing I have ever seen, and the result is that I no longer feel comfortable being associated with the Bitcoin community,” he concludes.
While he does acknowledge being glad to have been part of the community, he doesn’t believe it’s worth sticking around. But as he wrote: “Bitcoin has entered exceptionally dangerous waters.” And on that note, he simply wished those involved (who he did recognize as being talented) good luck. And, of course, to “stay strong.”
And boom goes the cryptocurrency world.
At least in those two scenarios. There’s bound to be another handful of ways bitcoin could (and probably should, if you’re asking Webster) hit its demise.
But who’s counting – besides us?
Bitcoin Tracker Week 105: The Top Bitcoin News Of The Week
PayPal Board Picks Bitcoin Startup CEO
A digital currency enthusiast has joined PayPal’s Board of Directors.
PayPal announced this week that it appointed Wences Casares to its board of directors. Casares is the founder and CEO of Xapo, a bitcoin company. The company provides tools for consumers to both purchase bitcoins and manage them through its digital wallet. It also enables consumers to spend bitcoin using the Xapo Debit Card or store them in Xapo’s secure Vault.
Calling him a “successful international FinTech entrepreneur and recognized next-generation payment and cryptocurrency thought leader,” PayPal noted that he will serve on the company’s Compensation Committee.
“I join PayPal’s directors and the entire PayPal team in welcoming Wences to our board,” said Dan Schulman, president and CEO of PayPal. “Wences’ unique line of sight into the future of commerce is ideally aligned with PayPal’s vision of transforming the management and movement of money for people around the globe.”
We can only hope that he doesn’t advocate paying people using bitcoin.
Bitcoin Alternative MintChip Gets Scooped Up
According to multiple reports on the deal, the conversations have been going on for much of the past year, but the terms of the deal were not released. nanoPay won the bid for the acquisition after being through multiple rounds of 10 companies with Origin Merchant Partner, an independent investment bank which oversaw that deal.
MintChip was created in 2012 as an alternative to bitcoin, and eventually found its way into its own digital currency niche. Because of nanoPay’s mobile wallet, it makes sense that there’s interest in having ownership over a digital currency solution. The pitch behind MintChip is that it allows for consumers/merchants to “exchange value faster, safer and at a fraction of the cost,” compared to similar options on the market.
Sounds a lot like the same pitch bitcoin gives, too.
Bitcoin Co. Trading Soon A Reality For Australian Securities Market
News broke this week that the Australian securities exchange is allowing the Bitcoin Group to publicly trade shares of its company starting Feb. 8.
The company, which will trade as BCG, will allow investors to buy into a company that operates a bitcoin mining rig across the world. The company aims to raise $20M for its IPO. Its overall, goal, of course, is to help bitcoin become viewed as a more legitimate currency.
“Every day, more stores are adopting bitcoin as a preferred payment method over systems such as Visa, MasterCard, and PayPal, as merchants don’t need to pay any transaction fees to receive bitcoin,” Bitcoin Group CEO Sam Lee told ZDnet.
And for investors, going public is the way the company intends to get more attention for bitcoin as a currency.
“It’s about giving ourselves and the industry accountability and legitimacy; people often doubt whether our industry is ‘real’ as bitcoin has been declared dead many times over,” Lee said. “Unlike private companies, however, listed companies have a higher level of compliance; audited numbers will assist us in educating people interested in our industry with facts, not fiction.”
For That Next Big Lotto: Buying With Bitcoin?
While we now know that at least three people won the record $1.5 billion Powerball jackpot, this announcement came just on the eve of the big drawing so the winners probably didn’t pay in bitcoin. But for the next big game, bitcoin will be an option for buyers who use the Jackpocket app to purchase those Powerball tickets.
“Our goal at Jackpocket is to create a more efficient platform. This means reducing friction and providing more options for players … and ensuring the lottery itself is more safe and secure,” Peter Sullivan, CEO of Jackpocket, said in an interview. “Utilizing Bitcoin is one step in [the] right direction to accomplishing our goal.”
Bitcoin and the lotto together sounds like the ultimate crap shoot to us.