

Problems with Bitcoin - iqpay
http://iqpay.co.uk/problemswithbitcoin/

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a3voices

        1. There is a finite number of Bitcoins that will exist
    

This is a good thing. It makes Bitcoins similar to gold. There is a finite
amount of gold in the world. Artificial scarcity is an innovation.

    
    
        2. Whilst there is a finite number of bitcoins, 
        there are an infinite number of Bitcoin-substitutes
    

That's true, but the network effect, being first to market, and having an
enormous community counts for a lot. There is only one Facebook. Also it would
take lots of additional software overhead for businesses to support other
currencies in addition to Bitcoin, not to mention it would confuse consumers.

    
    
        3. Large companies couldn’t adopt Bitcoin, even if they wanted to
    

Then explain how Shopify adopted Bitcoin? This is simply incorrect.

    
    
        4. Trust and transparency"
    

If someone steals your Bitcoins, they committed a crime, and the police will
go after them. Bitcoin also leaves a great audit trail.

    
    
        Continued existence of currency – as noted in
        section 3 above, whilst there may be good reasons 
        why cryptocurrencies could replace traditional
        currencies, there is absolutely no basis for assuming
        that Bitcoin will be that winning currency.
    

Yes there is a good basis - the fact that it's survived for 4 years as the
leader. TCP/IP, HTML, etc. is still around.

    
    
        5. Reliance on cryptography
    

Everyone relies on cryptography nowadays, and in the slim chance it becomes
broken, the Bitcoin community would come up with a new encryption scheme.

~~~
cmbaus
I agree with the author that having a finite number is not beneficial for a
currency -- it is inherently deflationary. I can understand a currency which
is increasingly difficult to increase the supply, but limiting production to a
fixed amount will certainly lead to hoarding. I've never understood this
limitation in bitcoin.

