Q: “WHAT’S YOUR CURRENT OPINION ON BITCOIN?”
1) a BTC is a “Share of stock in the BTC network”. Knowing that it’s a share in the BTC network helps you understand what it is – everything else is what someone claims it is. It is dependent on that network. It is not backed by anything but demand. It is not insured by anyone or anything – and can’t be. It can fluctuate as any other stock, the network can drive the price to zero, with zero demand (the equivalent of bankruptcy).
2) the goal was to make these shares useful substitutes for monetary transactions. In this case, then those shares function as what’s called “Token Money Substitutes”. (Like buying tickets for rides at a carnival)
3) IT hasn’t resulted in that outcome for the simple reason that user interface limitations, transaction response time, and limited acceptance because of limited demand, haven’t provided enough incentives.
4) As a consequence BTC has filled a more traditional role as a stock, and store of value, in the hopes that developers will solve the technical problems above.
5) Is this technology an innovation? Let’s disambiguate whether it’s a novel technology, and one that’s a novel innovation that survives in the marketplace. That judgment depends on answering whether it’s not just better to fund a distributed data store under traditional transaction processing, able to handle high volume transactions, using encryption but without proof of work or stake. It’s rather easy to design and program that system with current technology, and ride on the existing networking protocols without any bank intervention.
6) The criticism of this approach is that it requires a corporation, investors, etc. But how is that different from BTC? I invested in a company that monitored who processed what transactions and predicted who would process the next one or two or three etc, and it became obvious that for all intents and purposes, the system was always fighting to not evolve into a cartel.
8) But compare that to BTC: (a) The power consumption problem is absurd. (b) The alternative proof of stake is absurd (c) The absence of an insurer of last resort is absurd. (d) AFAIK we’re doing research and development for the State’s development of a digital currency which will subject us to even greater manipulation than ‘social credit’ scores. (e) And the pretense that the state can’t either shut down BTC, declare a 30 day price to convert BTC into FEDCOIN before prohibiting it, or prosecuting it into something used only by criminals, is equally absurd.
9) So, I’ve had the same opinion for almost ten years: (a) The only long-term value of BTC is the experiment with whether the public will tolerate a digital currency – that test succeeded. (b) But the technology stack has failed to solve the problem of concurrency, volume, insurability, and restitutability. (c) So the result will be a hybrid model of encryption, the ledger, and a privately held, distributed high-performance network OR the state equivalent OR both.
10) Now, there are a lot of people who will agree with me but if you understand the fundamental problems, then the only possible solution is serialization in a distributed network, that is insured, restitutable, reversible, fast, and so integrated into the economy that we can’t do without it. IMO it also requires protective LEGISLATION.
11) I’m bullish only for circumventing the banking system for cost-free transfers of title whether that title be to assets of monetary substitutes, or assets of financial instruments, or assets in the real world.
12) And my primary interest is making it so the poor have cost-free access to digital banking, borrowing, and redistribution if destitute. The rest of us will do just fine.
13) I haven’t been wrong. I’m not often wrong. I don’t think I’ll be wrong. Because I don’t think I CAN be wrong. That doesn’t mean BTC won’t survive. It only means BTC is very likely BETAMAX or CDROM while we wait for VHS or Flash Drives.
