Originally Posted by
Subby
No real indepth knowledge of crypto mechanics or encryption, but I think that’s irrelevant as to whether the government can interdict bitcoin.
The article doesn’t really give much info apart from 2 paragraphs:
“However, these efforts haven’t escaped the government’s attention. The bank accounts of those involved in this initiative were quickly frozen, and the Bitcoin was seized and flagged by regulators”
Bank accounts are the weak point, and obvious target to crack down on bitcoin, it doesn’t matter what you can/can’t do with bitcoin if you banks aren’t allowed to purchase it. There’s no way to exchange bitcoin to currency. It’s uses then become hyper niche.
“Bitcoin’s failure is partially due to society's deep dependence on centralized exchanges and banks, which will, realistically, not change anytime soon. Bitcoin has existed for over 13 years and has failed on every promise, including being an inflation hedge and store of value.”
This is true, the blockchain is the most centralised financial vehicle probably ever created, eventually it will become so large that only large corporations will be able to process it, moving us back to square one. The article doesn’t say what the promises it has failed on are, but I’d say as a story of value and hedge against inflation it has certainly risen dramatically, which satisfy both of those goals.
One of the main structural problems that I’ve heard come up from bitcoin round tables is that bitcoin has 2 potential uses. 1) As a store of value akin to gold bars. 2) As an alternate non fiat currency, which requires it to be easily transferrable. Due to the nature of bitcoin easy transactions are not possible due to the requirement to update and very the block chain on every purchase, each transaction requires a fee to be paid to the miner who does the actual checking/updating of the blockchain. Imagine buying a $2 ice cream at a store and having to wait for minutes for the transaction to go through, or pay $10 to have it go through instantly. It just doesn’t work as a currency, and it’s increasing price, while satisfying criteria #2, counteracts use #2.
The discussion was that for bitcoin to reach wider adoption people actually had to use it, not speculate on it. But using it increased the value and thus the benefits of speculation and holding. I don’t see a long term future for bitcoin in its current state, but I’m still not rushing to dump what I have.