5 Reasons Bitcoin Is Doomed

There are times when someone comes up with what at first seems like a really good idea that turns out to be a really bad idea. However, the problem is that until certain things are actually put into motion, there is no real way to know if an idea is any good or not.

Bitcoin is one such product that sounded like it would be a revolutionary idea that turned out to be doomed from the very start. While some of the ideas behind Bitcoin may have made sense at first, the application of these ideas proved to be less effective then intended.

What Exactly is Bitcoin?

Bitcoin is a decentralized digital currency that has no real value. The idea was that by selling Bitcoin to other people and limiting the amount of Bitcoin available it would eventually gain value over time and become a new form of currency that was beyond the control of any government agency.

Because neither governments nor banks could regulate Bitcoin, it was theorized that this digital currency would eventually replace all other forms of currency in the world and thus create a global standard. The problem with all of this is that there are some very obvious flaws in the thinking behind Bitcoin.

Bitcoin had No Inherent Value

The single biggest reason why Bitcoin is doomed is because its value wasn’t based on anything real. In order for something to have value (especially currency) it has to have something inherently valuable backing it. When there is no value to something, no amount of wishful thing will give it a value.

Bitcoin wasn’t Backed by Anything

While we left the gold standard a long time ago (and it would be catastrophic to go back to it), currency still has a value because it is backed by the government that issues the currency. In essence a country’s currency represents its economic power and this is what gives it value. Bitcoin has nothing like this behind it so it can’t have any value.

Bitcoin is Very Unsecured

Bitcoin was created using open source software. For those who don’t know, open source software is free software that has no owner and can be used by anyone for free. Because Bitcoin was made by software that anyone can get, it means that anyone can duplicated it. Duplication of currency ruins a currency, which is why most governments are so vigilant against counterfeit currencies.

Bitcoin can be Limitless

One of the things that makes any resource valuable (including currency) is that there is a limited supply of it. There can be potentially an infinite amount of Bitcoin in the world, which means that it will never be valuable.

Bitcoin isn’t Real

Because Bitcoin is purely digital and doesn’t represent any real goods, it has no value in any way. For something to have value it has to be real or represent something that is real. Bitcoin is not real and therefore has no value.

So there you have it, five reason that Bitcoin is doomed. While it was a very nice idea, it has no real chance of lasting and is not a good investment.

Featured images:

This article is by Andrew Foster who writes about PPI claims advice and other finance related subjects.