MONEY | BITCOIN
5 Reasons Why Bitcoin Has Failed
Bitcoin is backed by fiat money.
People have not done the work on Bitcoin.
A lot of people think that they will make it rich off Bitcoin.
Then there is a wealth of cryptocurrency enthusiasts, in a cult-like fashion, who believe Bitcoin is a vote against the ‘rich controlling elite.’
But, most people have not cared to do a fundamental analysis of Bitcoin or other cryptocurrencies.
So I’ve done it for you.
I was eager to write this article after chatting with 2x different sources. Both are close to me, whom I’ve known for over a decade.
I can’t name either cryptocurrency or token-related companies my sources work for because of defamation and the risk of being sued.
And, of course, here’s my disclaimer:
This article is not meant for financial advice; anyone interested in investing in Bitcoin or cryptocurrencies should talk to a professional or financial advisor.
First, my sources.
#1. My developer friend in Australia.
- My Aussie friend works for a cryptocurrency that has created its own token on Ethereum’s blockchain.
- He’s part of a team of 4 developers that receive 2% of all transactions made (8% total equity share).
- Each transaction acts like a tax on anyone who buys or sells their token.
- A large part of the developer team’s job is marketing to potential ‘investors.’ Which surprised me because I thought it was to develop their blockchain technology and maybe their product’s website.
When I asked my friend what their token or cryptocurrency does, his answer did not surprise me.
“It doesn’t matter because no law says we need to develop the token into what we say the token will do on our website.” — Anonymous.
An entire industry rife with Elizabeth Holmes copycats.
How much has he earned, you ask?
Over $AUS 600,000 in less than 3 years.
And it’s not his main job!
But wait, what does the team do when there’s a bit of a sell-off in their Token? They push the price back up by buying more.
#2. My cousins work for a cryptocurrency based in the U.S.A.
- My favorite duo.
- Brothers from another mother.
- These two are on Reddit groups, Slack channels, Discord channels, and any pro-Bitcoin or cryptocurrency forums online they can access.
- Their job is to market to ‘investors.’
- For each investor, they get a 5% finders fee or commission fee.
- Anyone who buys also gets commissions from driving sales.
If it sounds like a pyramid scheme, it’s a pyramid scheme.
Their grift is articulate, convincing, and seems exclusive. But it’s not. They are predators who shamelessly advise people to invest in their cryptocurrency ‘fund’ portfolio.
What they do is illegal.
The issue is that regulators are too slow to keep up with the proliferation of digital cryptocurrencies, which allows uneducated individuals to give financial advice to people.
It’s a bear trap.
To Joe, their crypto ‘fund’ sounds like investing in Berkshire Hathaway.
As of writing this article, $US 11.118 billion worth of cryptocurrencies has been stolen.
Why Bitcoin has failed.
#1. Bitcoin is supposed to be its own currency. It’s not.
Anyone who talks about Bitcoin will reference its price in $U.S.
It's paradoxical and amusing when people with an unwavering belief in Bitcoin consistently articulate its $US price. ‘Fiat’ currencies back Bitcoin. At the same time, Bitcoin enthusiasts are anti ‘fiat’ currencies.
I’m laughing as I write that last paragraph.
The irony.
This is the antithesis of what cryptocurrency bulls argue.
People argue that Bitcoin is a currency and that it will become mainstream for people to use for everyday purchases.
Bitcoin has also been discussed as a hedge against inflation, but Bitcoin is down over 65% in 2022, and inflation is rife.
#2. Bitcoin will never be mainstream.
Only 63.1% of people have a connection to the internet worldwide.
It is a fool who believes you will be able to run all transactions for trading goods and services on any digital currency, let alone Bitcoin.
In a world run on Bitcoin, a third of the people will be restricted from fundamental human rights like food and shelter.
If blockchain technology, whether a cryptocurrency or world bank digital currency, becomes used by every individual, I have news for you.
You and I won’t be alive.
The infrastructure to create this dystopic world will take another hundred years. If ever.
#3. Cryptocurrencies are NOT decentralized or anonymous.
People who initially went into Bitcoin talked about its anonymity.
This has attracted $US 11.118 billion to be stolen through criminal activity.
But all transactions are traced on the blockchain.
So if you've been found or identified with a wallet (which has a unique user key or identifier), all your transactions are on a ledger.
Furthermore, if you have invested in a cryptocurrency like Tether or any Token on Ethereum, you are literally giving your money away to be controlled by one or two individuals.
The opposite of decentralized.
#4. Countries have banned Bitcoin.
People want to run their own ecosystems using Bitcoin, but countries like China will ban it.
Most Western countries now regulate Bitcoin, and you must pay tax on profits if you have profited from increased prices.
Even if there are small States or emerging countries that end up utilizing Bitcoin, the raft of issues will pile up faster than that of Wile E Coyote realizing he’s just run off a cliff.
- No one knows who created Bitcoin, so it will be banned if it is ever tied to a terrorist organization.
- It will be banned if tied to an opposing country of the U.S.A.
- If you have no internet connection for any reason (Iran right now), you might lose all your money.
#5. Bitcoin isn’t insured.
Best for last.
The simple fact is that banks insure your money. So if your money is lost via a transaction or stolen, you will get it back.
Bitcoin and ALL other cryptocurrencies are not insured.
Do the work.
It’s a hard reset when you realize the best way to live freely is to add value to your community and the people around you.
Bitcoin does neither.
The best way to become rich is to create goods or provide services of value to people.
Coming sooner than I initially anticipated, ‘The Black Swan Event That Will Plummet Bitcoin.’
Here’s some further reading on why NFTs are worthless.
Keep creating.
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