bitcoin in pointless

Why Bitcoin is Pointless

Bitcoin is the star of the crypto world having amassed over $1 trillion in market cap but I have to admit, the coin is far overhyped…

An Ecological Disaster…

Bitcoin can process a maximum of approximately 576,000 transactions in 24 hours. (That’s the theoretical limit — the actual limit is closer to 350k). By contrast, even a small country like New Zealand (population < 5 million) carries out some 4.4 million financial transactions a day. The EU carries out some 274 million electronic transactions a daily, while the US carries out some 600 million. In short, Bitcoin couldn’t manage as the currency for a decent-sized city.

Bitcoin energy consumption overtime

Not to mention that Bitcoin mining already uses as much electricity as the country of Iraq and almost as much as Singapore. Each single Bitcoin transaction uses as much electricity as 13 American homes use in a day. It uses as much energy as 260,000 Visa transactions. A remarkable waste of resources.

In fact, Bitcoin mining now uses more electricity than the output of all the solar panels installed in the world. It’s single-handedly offsetting much of the progress that’s been made in de-carbonizing the global economy. It’s an ecological disaster.

Bitcoin does nothing that currently existing systems don’t do much much more efficiently and cheaply.

There have been stories of Bitcoin gaining traction off in Africa because their local currencies are very unstable and prone to hyper-inflation. This would make sense to me…..again, if bitcoin were stable, but it’s not. It’s typical for the price to swing 25% in a single week. These countries would have better luck converting their money into USD or gold…

Let’s talk Smart Contracts

Blockchain technology is being used to create applications that go beyond just enabling a digital currency. Launched in July of 2015, Ethereum enables the deployment of smart contracts and decentralized applications (dapps) to be built and run without any downtime, fraud, control or interference from a third party.

Dapps built on Ethereum can execute smart contracts automatically without the need for a third party like banks or government to approve them, thus unlocking many bottlenecks in commerce.

You can build both fungible (i.e. currencies) and non-fungible (i.e. art/music) tokens using Ethereum. Meaning any developer can deploy their own version of Bitcoin on Ethereum in a matter of minutes. (see ERC-20 standard)

Ethereum recently introduced staking to their network far more energy efficient and reducing its carbon footprint.

Now the only thing standing in its way is transaction speeds and costs, which platforms like Polygon, Avalanche and Solana have already solved.

So what competitive edge does Bitcoin have? First mover advantage.

Trends die out and so will bitcoin

Bitcoin’s success is in large thanks to the fact it is a cultural phenomenon representing the crypto/blockchain movement as a whole. It’s a symbol.

When Paypal and Walmart start accepting Bitcoin, it’s a win for the movement overall and paves the way for far more blockchain innovation in society, but when it comes down to it, paying for your groceries in Bitcoin is currently a horrible experience for any consumer.

Trends come and go and symbols don’t retain value overtime. Real utility and usability appreciates in value overtime and creates generational wealth when no one is looking.

The future will be built on smart contracts, not clunky currencies.

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