How I Feel About Bitcoin

I am generally pretty indifferent to Bitcoin. Unlike many who think it’s either “the wave of the future” or going to bring about the end times through a global warming apocalypse, I don’t think it’s really all that important other than as a research project.

Bitcoin is Cryptocurrency 1.0. It was an interesting idea that doesn’t have much long-term potential due to its flaws (slow transaction confirmation, high transfer fees, massive energy consumption). That said, you may very well make a profit investing in Bitcoin (BTC). Markets are weird and have many factors, and while Bitcoin itself is not great for small retail transactions, it could still be a valid store of value akin to buying a gold bar. You can’t buy a cup of coffee with a gold bar either. Bitcoin doesn’t seem to be all that interested in further innovation to improve, either, which is why forks like Bitcoin Cash exist.

Ethereum is in a similar situation — as cryptocurrency 2.0, it solved some problems that Bitcoin didn’t, but still has its own issues. Another useful research project, and one that is still innovating and doing new things, but one that will probably not survive as new cryptos evolve.

Newer cryptocurrencies build on the good ideas that Bitcoin and other early-generation cryptocurrency brought to the world, but also solve some other important problems. For example, proof-of-stake-based coins don’t use ASIC mining (which consumes a lot of electricity and contributes to global warming). Many others have a low energy footprint or base themselves on things other than mass computational power. As more environmentally friendly coins come around, the energy-hogging ones will gradually fade.

I don’t see either of them having much long-term usefulness, probably not greater than 20 years, but that doesn’t mean they won’t continue to have value in much the way that antiques do. Ancient Greek and Roman coins can be worth a ton of money, but you can’t and won’t spend them anywhere, at least not directly.

Note: I have about $15 worth of Bitcoin (mainly from loyalty programs), and have both mined and traded Bitcoin years ago.