The Case Against Bitcoin

From Emily Atkin at The New Republic:

No one may be using Bitcoin, but we’re all paying for them. Bitcoin analyst Alex de Vries, otherwise known as the Digiconomistreports that the coin’s surge caused its estimated annual energy consumption to increase from 25 terawatt hours in early November to 30 TWh last week—a figure, wrote Vox’s Umair Irfan, “on par with the energy use of the entire country of Morocco, more than 19 European countries, and roughly 0.7 percent of total energy demand in the United States, equal to 2.8 million U.S. households.” (As of Monday, the figure had reached nearly 32 TWh.) Just one transaction can use as much energy as an entire household does in a week, and there are about 300,000 transactions every day.

A single Bitcoin transaction…can use as much electricity as an entire household uses in a fucking week. As the value of Bitcoin and mining difficulty soars, the plummeting efficiency is only going to get worst. Sure the returns are insane, but is it worth it? Hell no. Surely there's got to be a ceiling to this madness?

More recently, Paul Ford contributed his thoughts on Bitcoin to Bloomberg:

It’s not that I want Bitcoin holders to suffer, really. As a technologist and entrepreneur, I’m sympathetic to and admiring of risk takers. But as a writer, I enjoy the sheer human-condition-revealing sport. I’m happy to watch other people play video games without playing myself. I’ll watch poker, but I’ve never bought a deck of cards—and when I watch football, I keep the official NFL rulebook open on my phone. For whatever reason, I tend to like the rules more than the game. Bitcoin is at some level just a set of rules, defined by software, that has become one of the world’s weirdest games. And people who invest in an unmanageable abstraction, then panic when it underperforms, are very entertaining.

[…]

The people tossed around by the cryptocurrency tempest—their only sin is belief. (Well, and greed.) But here I can only smile warmly and sigh. I know what it’s like to believe.

Pure greed. All at the expense of our pale blue dot.

Bitcoin has become the litmus test strip for all cryptocurrencies. As they continue to become more and more tightly bound (more and more trading pairs are cropping up everyday), we are setting ourselves up for a world of hurt. This won't end well. When Bitcoin moves, all alts move.

There's a lot of other really great, efficient cryptocurrencies out there. Litecoin, Ripple, and even Ethereum are decent contenders. There's also no shortage of shitty alt-coins too, don't get me wrong. 

I'm no soothsayer, but Bitcoin wasn't designed to scale. It wasn't designed to be efficient. It wasn't designed to last forever. It has limits. Other cryptocurrencies have had time to adapt and evolve to meet demands that Bitcoin can't. Bitcoin will bequeath its throne in my lifetime. 

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