Bitcoin fees. As the blockchain reward gets smaller and smaller and more transactions keep coming in the fees will keep rising. Right now for me to send any amount of bitcoin on coinbase it's over $11.41 to do so, of course there are other wallets like blockchain with smaller fees. But right now the system is so back logged the main ones being sent through are priority. To break this down a bit better, there are very very few people using bitcoin at the moment compared to the world. I meet people on a daily basis that never heard of it, and I meet a few that have heard of it but have no idea what it really is. The majority of the people I do come across couldn't tell you the first thing about bitcoin. That's just the start of the issue, if bitcoin is having such a backlog right now, what if it was as widespread as Visa or mastercard? I read that bitcoin can barely do 12 transactions per second, while visa handles around 2,000 per second. Even if the 2mb segwitx2 came into play, it still couldn't handle a fraction of what Visa handles.
I personally run a business where I buy and sell products online. The warehouse that I purchase from luckily takes credit cards for online payments, which brings me to my next point. I have a travel rewards card, and I earn over $150-$180 a month buying items for my business. Not only do I use this for my business, but I use it for my day to day needs from groceries, gas, everything. There are many times when I am at the store and my bill will come to $110 for example, even if I have $200 in cash in my wallet, I won't touch it. I'll get my rewards card and then use the cash to pay the rewards card down. Why would I make a purchase at all using cash when I have a rewards card that actually gives me money back and free traveling? Bitcoin can never offer this. I've already earned over $850 dollars, which will pay for my plane ticket to Asia early next year. All this because I was shopping.
Fees and wait time. Let's say I decided I will stop trying to earn free rewards and I am going to just go ahead and start buying my items in bitcoin because free traveling doesn't sound appealing anymore. Let's say I am at Walmart and I want to check out immediately, I transfer my money to Walmarts wallet, now not only am I losing any rewards, but now I am the one responsible for paying the fee to transfer to them, and if there is a delay in the system I may be asked to wait for an hour... or two... or three? until my transaction is confirmed? no thanks, why are we speculating on this for our future?
So what if the roles are we reversed and we asked Walmart to pay our transfer fees to them to make transactions. First, we have to truly understand how retail works. If you were to go to a big company like Pepsi or Nabisco and say "hey I have a great new design for the oreo's you sell but it costs 0.05 cents more than what you're paying now" you'll be leaving without a sale. Because in retail half a cent in production means everything, you're talking billions of costumers and 0.05 cents adds up, quick. Walmart would never agree to pay the fees associated with bitcoin, they must come down to match the fees of visa and mastercard, and frankly, that is never going to happen. They could not even come close. Not only is Visa destroying Bitcoin on a transaction speed level, but their fees are very very small compared to bitcoin, even if a transaction fee was reduced to say 45 cents, it is still less on average than what it costs to take a debt/credit card. And the sad reality is, the opposite is going to happen as miners need to make up more money by charging higher fees as the mining reward gets cut in half again. The thing is with bitcoin is everyone is looking to get rich, and they're looking to get rich in USD ( or their fiat currency ) not in bitcoin, and human greed is a funny thing. It can't be controlled. People always want more. Companies are the same way but governments control that they are not price gouging and have set max fees allowable to be charged to the retailer to avoid that greed. Something governments couldn't put in place on decentralized human greed.
So now you have higher fees, longer wait times, no customer service if an issue occurs, loss of money if you are hacked, or if another exchange closes down... let's look at the scale of bitcoin and we can see that it is not a currency and never will be used as one. People will always use cash, or rewards credit cards. Plus the people that can't even figure it out, I mentioned in my last article how my dad can't even turn on a computer much less figure out how to actually buy a bitcoin and use it. That's a good portion of adults 50+
Environment concerns. As most of us read recently Bitcoin uses more electricity in mining, than the entire country of Nigeria, and puts out more carbon dioxide than Ecuador. Again, we look at how small bitcoin actually is, and we must see if it does keep growing, there will be environmentalist going crazy over the actual harm it is doing to our planet. Even on this small level of bitcoin, we're probably removing years off our planet as it is. When you think we're using more energy than entire countries just to mine what? bitcoin? what is it and is it really worth hurting our planet over? our planet is probably already going to be destroyed in the next 1000 years, are we not thinking about our future generations and just worrying about getting some fake internet currency that we're willing to risk our future generations over it by destroying our planet sooner than we already are? Something has to be done, and something will be done. If bitcoin keeps growing, if governments aren't worried about bitcoin taking over their currency as it is, they will see it as hurting our planet and stop it so it stops the carbon footprint.
Many say governments have no control over bitcoin, and the reality is they do. Most people are law abiding citizens and won't want to risk going to jail or being fined for dealing in cryptocurrencies. I have heard the argument many times that if a country bans it, it will only fuel the fire more. But the case is not true, I personally would not be holding bitcoins at all if it were illegal, and many others wouldn't either. There are tons of ways to make money, and if the speculation is gone that this is the way of the future, so goes the price as well. Retailers would never accept it, and you could truly do nothing with it, and at the end of the day you're holding a piece of air that doesn't even give you dividends.
Last piece of this article - Jamie Dimon and others are not "scared" of bitcoin and it doesn't mean you're onto something when a high financial person disses it. I will say Jamie came on a little too strong by calling it a fraud. I don't think bitcoin is a fraud or a ponzi-scheme, but there is really no threat to the financial system with bitcoin. The fact is, we're a regulated world, bitcoin is not regulated, therefore there are no employees, no one to help you with when you have questions, and no help, period. Meaning you and your wife want to buy a house, but the banks are all gone because of bitcoin (let's pretend) where do you go to get a mortgage to buy this house? or car? you see, banks make a good portion of their money on the interest you pay on your loans. The majority of people will not accept bitcoin for their homes, assuming you own enough bitcoin to even buy a house without getting a mortgage. ( which isn't most of you ) So now this automatically brings banks back into the picture, because the reality is, we need loans. Personal loans, mortgages, car loans, etc. The average person just doesn't make enough money to buy a house, and while a few did get rich enough to buy homes off of bitcoin, that reality will come to an end eventually. ( if it hasn't already ) So Jamie probably isn't fearing bitcoin because he knows people will always need loans. I don't see the bitcoin bank loaning me any money. But if anyone gets a hold of Satoshi and finds out how I can apply for a loan, please reply
In this article, I'm trying not to mention all the downsides to bitcoin, like all the criminals it inspired and all the other things that are bad with bitcoin I mentioned in my last article. I'm just trying to be realistic. I want people to open their eyes and realize that this is not going to be revolutionary, it's interesting, I also find some of the things interesting like who really is Satoshi and Laszlo doing 10,000 bitcoin pizza deals. The old days were interesting and I've read over all the old articles just for fun. But as interesting as it is, it's not revolutionary, it's not the next big currency and it's definitely not an investment tool.
Thanks for reading. Your comments and opinions will all be read and highly appreciated.
