GBTC - Why Bitcoin Is Fundamentally Flawed

2024-03-11 14:19:43 ET

Summary

• Enthusiasts would describe Bitcoin as a decentralized digital currency and a store of value, outside the control of any one person and offering diversification. However, this perspective ignores fundamental problems.
• The limitations of Bitcoin as a digital currency are acknowledged, and so is Bitcoin positioned primarily as a store of value akin to 'digital gold'.
• And while Bitcoin's high-energy consumption is widely recognized, it remains fundamentally misunderstood.
• In this analysis, I explain why Bitcoin's energy consumption not only constitutes a critical flaw in its use case, but also paradoxically leads to value destruction rather than preservation.

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Introduction

Enthusiasts would describe Bitcoin USD (BTC-USD) as a decentralized digital currency and a store of value, outside the control of any one person and offering diversification outside conventional systems. As a software developer working on bank treasury and blockchain applications, I'm a big proponent of blockchain technology's potential. However, my enthusiasm is not blind to the limitations and problems found in specific blockchain implementations....

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