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Bitcoin

Will Bitcoin be around in 2148?

I was heavily downvoted last month on Reddit for questioning the premise of this statement:

In the 100 year period from 2048 to 2148, only 20,507.8119 BTC will be mined!

I believe 2148 is a too far away to suggest Bitcoin will still be around. One of the retorts suggested:

Nothing is superior to BTC for what it does.

Stay with me here, we are talking about the year 2148. Bitcoin isn’t the best available electronic payment system today. I can safely conclude Bitcoin will not be the best alternative in 2148.

Will Bitcoin even be around in 2148?

I don’t know normally make predictions (especially about the future), but I am going bold now and saying: “no”. Or anyway, I sure hope not.

If you support Satoshi Nakamoto’s vision to create a decentralized, peer-to-peer payment system that bypasses the financial system, you should probably hope Bitcoin is eventually replaced by superior alternatives.

Why? Because 10 years and billions of dollars in investments later, very little actual commerce takes place using Bitcoin. Even the most ardent supporters of Bitcoin view it as digital gold–as something that holds value when all fiat currencies fail.

Nothing is superior to the floppy disk for what it does

What might cause Bitcoin to fail completely? Here are some possibilities:

  • Quantum computers will crack its underlying encryption system, especially its public-private key system used for authorizing transactions. The maintainers may adopt new forms of encryption, but only after the economic damage has been done. More problematic is the solution may be incompatible with the current chain, requiring a hard-fork that requires users to generate new wallets.
  • Cheap fusion energy may break proof of work. More specifically, it may reduce the cost of attacking Bitcoin to zero.
  • Alternatively, global climate change may become too real, and energy too expensive to continue its wasteful proof of work consensus.
  • Transaction fees will not be sufficient to offset loss of mining rewards. HODLers don’t generate fees. The system will become insecure and fail due to lack of participants.
  • The Internet infrastructure supporting it will fail.
  • Bitcoin will not deliver as a counter-cyclical store of value. As fiat currencies used by debt-wrecked economies deplete in value, many people will spend their Bitcoin on necessities. The value it Bitcoin will drop along wth fiat currencies.

For me to suggest Bitcoin will not dominate in 2148 is not the same as saying it won’t exist. Bitcoin may exist, in name, but not in its current form. This suggests several scenarios:

  • Bitcoin perseveres, but the cost of maintaining the infrastructure becomes very high. Usage drops as its network effects are replaced with other systems. The value of Bitcoins drop as people trade it for other crypto-currencies.
  • Bitcoin will simply fade away once people have moved on. Few people will use it, exchanges won’t bother listing it, the mining pools won’t be maintained and will slowly die out, and the miners will dwindle to low numbers. Nobody will bother attacking it because the value it too low, except as a prank or a dare. A small handful of people maintain a legacy system that no longer serves any purpose.
  • The BTC symbol may be transferred to another decentralized electronic payment system that fixes its issues. The tokens might even be migrated to that system, nominally retaining Bitcoin’s stored value. But it will not be Bitcoin as we know it today.

There are a lot of possibilities, and this list is not exhaustive. It simply reflects the variety of possible outcomes that nobody can predict. Especially a skeptic.