# Last edited on 2014-12-11 19:16:09 by stolfilocal
# For the "Wall Observer BTC/USD - Bitcoin price movement tracking & discussion" - NOT POSTED

[quote author=inca link=topic=178336.msg9810170#msg9810170 date=1418326819]
Do you understand that the great strength of BTC is that as it becomes mainstream its qualities of mathematical scarcity and peer to peer network will lead to dual roles as 1) a widespread frictionless medium of exchange and 2) a growing global store of value. As one role increases it will drive the other and the exchange price.
[/quote]

I understand that [b]cryptocurrencies[/b] could be a [b]nearly[/b] frictionless medium of exchange; some are more than others.  However, some of their alleged qualities are actually defects, and some defects are so serious that even the US government may decide to ban them.  [b]Bitcoin[/b] is scarce (unless the protocol is changed), but the scarcity argument is unconvincing because there is an infinite supply of cryptocurrencies.   Compared to other crypto, bitcoin has a couple advantages, but also some disadvantages.  The bitcoin network has an impressive amount of hashing power, but that does not make it more secure, because that power could quickly switch to another coin, or be turned against bitcoin.  It is also extremely expensive; so, when fees become necessary, bitcoin may be unable to compete with less energy-hungry coins.  Bitcoin cannot be a reliable store of value because its value depends entirely on demand and supply at the exchanges, and both are unpredictable.  Moreover, there will be no entity offering to swap bitcoins for newcoins at a fixed rate, if newcoins take over.

It is for those reasons, and several others, that I am still quite skeptical about bitcoin ever succeeding in the terms you describe.  I won't dare to guess what will happen in the next couple of years, but I cannot see how it could face off competition from better cryptos or centralized systems.  It will probably continue to be mined and traded for decades --- as the computer technology experiment that it was meant to be, by people who are interested in the technology.