# Last edited on 2015-03-17 23:35:16 by stolfilocal
# For the "Wall Observer" thread
# NOT POSTED

I think it is very unlikely that a global decentralized payment system will exist in the long run. For one thing, the people who want it (for good or bad reasons) are fewer and less powerful than the people who do not want it (again, for good or bad reasons), and the vast majority do not care. Moreover, I do not see how such a system could have a currency with stable price.

Bitcoin has some fatal flaws that need to be corrected, but that woudl require genial ideas, not just hard work and incremental improvements:

* Its block reward scheme is not coupled to the bitcoin price, which has resulted in mining being hyper-rewarded but in a way that is independent of its actual use.  So we have new investors putting 1 million dollars a day to maintain a hypertrophied mining industry, while the people who actually use bitcoin pay nothing.

* The finite supply has created the expectation of absurd increase in price, which has encouraged hoarding, and results in early adopters potentially becoming trillionaires.  (This problem is intertwined with the aberrant reward economics one).


* The protocol inevitably leads to concentration of mining in a few companies.  This has already happened, and the top 5 companies, all Chinese, have more than 50% of the hashpower.  By fundamental principle of the protocol, they can control the system.  So the bitcoin protocol cannot guarantee decentralization, and is likely to lose it.

* The absence of a central authority means that transfers due to theft, fraud, error, or criminal activities cannot be reversed. Indeed, bitcoin does not record property, only possession.  This is unacceptable to most honest users.