Lunatic Fringe

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IoT: The Future of Crypto

The Future of Bitcoin as Money? Is There Any?

by Jabba-Q, “The Coins Prophet”

BTC goes over $1,000.00 and everyone and their grannies goes agog. Truth to be told, bubble to be popped: one BTC over $1K is, for the world’s economy, as significant as the mouse’s fart is for the greenhouse effect.

A reality check:

$          16,260,117,431 was the BTC market-cap on 11th of February, 2017 (@ $1,006.39)
$          18,991,915,973 was the total crypto-currencies market-cap on 11th of February, 2017 (all 647 currencies)
August 19th, 2017 update.
The fart has become louder and louder recently. Yet, still a blip. Not the one “they” can keep ignoring though:

$          67,151,247,947 was the BTC market-cap on 11th of February, 2017 (@ $1,006.39)
$       141,531,781,314 was the total crypto-currencies market-cap on 11th of February, 2017 (all 647 currencies)
$       693,170,000,000 was the Apple Corps Ltd. market-cap on 10th of February 2017 (source)
$    1,500,000,000,000 was the approximate amount of USD in circulation as of January 11, 2017, as per FED
$  18,036,648,000,000 was the U.S. GDP in 2015, according to the World Bank
$  20,215,457,437,540 was the total market-cap of companies listed on the NYSE as of Dec., 2016
$  74,152,476,000,000 was the world’s total GDP in 2015, according to the World Bank
$544,052,000,000,000 was the world’s total Global OTC derivatives market “value,” according to the BIS.

Bitcoin Halving
To put these numbers in a perspective: Bitcoin, at its near-peak of $1,006.39 per a coin has a market-cap that is 2.34% of that of one single U.S. company, the Apple Corps Ltd. As the money, BTC’s circulating value is at 1.08% of the U.S. dollars in circulation. Bitcoin’s $16B and change market-cap also represents about 0.09% of the U.S. GDP, 0.02% of the World’s GDP and a glorious 0.0029% of the world’s total Global OTC derivatives market.

We would need a lot of mice farting in the woods to be really noticed.

What does that mean?

That any statistics can be tweaked in the shittiest possible ways? It’s not that gloomy, of course, so let us remind our wise reader of more thrilling Bitcoin statistics:

— From August 2010 to August 2014, the monthly number of transactions using Bitcoin increased 177-fold from 12,000 to 2.1 million (a compound annual growth rate of 265%)
— Market value, in US dollars, increased more than 27,000 times, reaching $6.3 billion, an annual growth of 1,184%

The Real Problem

None of these numbers above, “good” or “bad” do not reflect the most painful comparison to the fiat world a Bitcoin doubtful could make. As of today, February 11, 2017, the bitcoin blockchain can process no more than 7 transactions per second (tps). Visa network is scaled to about 56,000 tps max and that, again, makes bitcoin a cute little dwarf — or a quietly farting mouse — in comparison, a comical entity able to perform 0.0125% of all the transaction the competitor (it plans to “crush”) is currently able to perform.

Imagine if your Visa CC would have to register ALL other Visa transactions that are being made in order for your own transaction to work and you’ll see where the Bitcoin stands today.

So, yes, it must bear repeating that we, the Bitcoin believers, are these rare farting mice, currently having an influence over the world events as much as the Grupo Desportivo de Bragança, a soccer team currently in the Terceira Divisão Série A which is the fourth tier of Portuguese football, fans have over the Communist Party of China. None. Zero. Zilch. Nada. Ничего. Меньше, чем ноль as the winner of the U.S. presidential election, per Hillary Clinton and so-called “democratic” party, Г-н Владимир Владимирович Путин (Putin) would gleefully say.

In order to Bitcoin to have a fighting chance in the world’s economy, the scalability issue must be resolved! Everything else is nonsense, and meaningless statistics.

Solutions?

These guys — the Bitcoin core developers — have an unenviable task: scale the damn thing. And scale it fast. How serious this problem looks like in the real life? “If Venezuela were to switch over to Bitcoin today, every adult would be able to conduct at most one financial transaction every 72 days.”

Bitcoin community has been split over the best approach for scaling the network’s transaction capacity. Solutions such as Segregated Witness from Bitcoin Core or other on off-chain scaling, through a technique known as payment channels, are many. Andreas M. Antonopoulos, says in his 2016 talk in Barcelona: “It’s not just the five I’ve mentioned, there’s like twenty proposals on how to continue to scale Bitcoin. Will it scale ultimately on its own without another layer? I don’t know — maybe we’ll have to do more layers on top as long as they’re trust-less and decentralized, I’m okay with that. But it will scale.”

Will this thing scale and defeat the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” (Goldman Sachs and the whole Financial Crime Cartel) or will it die with a whimper?

What say you?

 

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