Friday, January 15, 2016

The Resolution of the Bitcoin Experiment

Mike Hearn:

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.

Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network 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.

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Wow. Thanks for that link, Michael. Fascinating read.

What a clusterf*ck.

Ironically, that post is what might "save" Bitcoin. Bitcoin lost a bit more than 10% of its value (in 24 hours) since its publication, cutting into miner's profits (who usually operate on a thin margin) and publicly shaming them. And so miners, one after the other, are now pledging support for Bitcoin Classic to calm the user's fears and keep the value from falling further. Many other Bitcoin-related companies are doing the same too. It's a wonder what a crisis can achieve in politics.

I'll say it was bound to happen one day or another. Bitcoin "died" several times already, and it's still with us.

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