Why Bitcoin Is the Most Dangerous Global Scam ter 20 Years

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During the late ’90s, Silicon Valley venture capitalists and Fresh York City investment bankers used phrases such spil “monetizing eyeballs,” “stickiness,” and “B2C” to justify the ridiculous valuations of internet companies. They claimed conventional methods were inapplicable te valuing the dot-com companies — which had no revenue — because wij were coming in an entirely fresh economy.

Believing thesis people, and afraid to miss out on the gold rush, small-time investors, grandma and grandpa, and barbers and taxi drivers invested their life savings ter companies such spil Pets.com, Webvan, and eToys. The bubble burst, and they lost everything. Through a transfer of wealth te the billions of dollars from Main Street to Wall Street, VCs, unscrupulous CEOs, and bankers had effectively enriched themselves at the expense of hundreds of thousands of ordinary investors, leaving them to despair about their futures.

History is repeating itself now with bitcoin. This time, it isn’t just Main Street USA that is about to lose its T-shirt, it is also the developing world. Technology has made it possible for hypesters te Silicon Valley, China, and Fresh York City to fleece anyone, anywhere, who has a bankgebouw account and an internet connection.

The story that bitcoin victims are being sold is that, because wij cannot trust government-issued currencies, bitcoin is the future of money. One investor calls bitcoin “a bounty from Maker to help humanity sort out the mess it has made with its money.” A PayPal director predicts that bitcoin’s price will reach $1 million te the next five to Ten years, asset managers say it is the fresh gold.

This is finish nonsense. Yes, the price of bitcoin may yet dual or even quadruple — because its price is based on unspoiled speculation, and thesis stories are feeding such speculation. But bitcoin’s market price is almost certain at some point to crash and burn, just spil the dot-coms’ did, and for the same reason: because it is all hype. And there will be no one to turn to when it does, because no government or bankgebouw is backing bitcoin up, and the people who are hyping bitcoin will have cashed out and be long gone.

Bitcoin’s price is not a reflection of its growing usage spil currency, it reflects merely request for the mirage of its speculative value. Its price is rising only because people all overheen the world are hearing stories of how others doubled or tripled their money te a brief period — and they don’t want to miss out. Unsophisticated investors are taking out loans to buy bitcoins. Those who have spent the currency feel remorseful when they see its price subsequently increase, so they hoard it.

Bitcoin wasgoed invented by an unknown person or group to be a digital currency. It permits money to be transferred directly inbetween individuals using cryptography. The canap ledger is distributed to all users, and ingewikkeld mathematical transactions ensure transaction integrity. Such a system makes it difficult for governments to know the identities of people exchanging money, so it has become a toevluchthaven for money laundering, drug dealing, and corruption.

Beyond its usability for crime, bitcoin has major vormgeving flaws.

Bitcoins are created (or “mined”) at predetermined and little by little decreasing rates, with a total limit of 21 million issuable coins. The rate of increase ter available bitcoins is not keeping tempo with the number of people keen to buy them, so the price of a bitcoin keeps enlargening. Because its price increases, both its “miners,” whose computers do ingewikkeld calculations to earn the currency, and those who buy bitcoins from others feel reluctant to use them spil currency by spending them. Instead, they sit on their coins while they wait for the price to rise further. With bitcoin supply constrained and increasingly falling brief of request, instead of functioning spil a currency, bitcoin is a speculative empty asset.

Then, there are problems with the technology itself.

Very first, anyone who has access to a bitcoin password (or private key) has the authority to spend the bitcoins it unlocks, loss of the password means loss of all of the associated bitcoins, with no recourse. 2nd, linear growth ter the chain of blocks that make up bitcoin is resulting te exponential growth te the computation necessary to process and verify transactions: Transactions that used to take Ten minutes now take hours. Third, with bitcoin transaction fees hovering above $25, a $Five payment now costs $30. This obviously is not a workable digital currency.

What is most worrisome for the planet is the energy expenditure that verifying transactions now requires. The bitcoin network is reportedly consuming energy at an annual rate of 32TWh — about spil much spil the entire nation of Denmark. Each transaction consumes 250kWh, enough energy to power an average Western huis for nine days. China has become the vooraanstaande bitcoin-mining nation, with its provinces providing ultra-cheap energy to miners.

Digital currencies surely are the future, but other options make more sense than bitcoin. Take China’s WeChat Pay and Alipay, which now process $Five.Five trillion of payments. Or India’s Unified Payments Interface, which makes it possible to transfer money inbetween people within seconds — for no toverfee. This occurs bankgebouw to handelsbank, provides customer support and security, and has little overhead. So there are better and simpler ways.

Related movie: Mineração den Vivo Coin com Neoscrypt!


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