Flaws in fiat make a lasting revival for Bitcoin likely
Over the weekend a friend of mine sent me a link to a recent article in the Economist, “Flaws in Bitcoin make a lasting revival unlikely”. Reading the article brought about a deep feeling of déjà vu. In the wake of MtGox closing in the winter of 2013–2014, I debated a journalist from the Economist on the BBC. Back then, Bitcoin adoption was much more limited, but it has continued to grow as I predicted and the journalist doubted, both for speculation and payments. Then as now, I disagree with the Economist, a “lasting revival” of Bitcoin is more likely than not, to a significant extent because of the flaws of fiat currency.
That said, there are strong network effects cryptocurrencies as in other currencies, only a few will survive this epoch of “Cambrian explosion”. The cryptocurrency ecosystem is new and in rapid flux, and analysts therefore must be careful about which conclusions to draw and metrics to use. Bitcoin is by many measures the leading cryptocurrency, but there is no guarantee it will maintain that place. And I agree with the Economist that there are many half-baked or outright fraudulent cryptocurrency related ideas and projects in the public domain. As in any wave of innovation, buyers should beware and regulators ensure that products and services are not used for nefarious purposes.
