Wednesday, July 11, 2018

University of Chicago Economist: Eventual Low Cost Attacks Will Keep Bitcoin From Ever Going Mainstream

Via TechInDC:

A University of Chicago economist has thrown some cold water on the notion that Bitcoin will be broadly adopted and have the chance to truly disrupt the existing financial system. In a paper published in June, Eric Budish concludes that “the decentralized trust” enabled by Bitcoin is expensive relative to the low cost of attacking the Bitcoin network that an attack would be inevitable should the price ever approach that of gold.
Within the past year, Bitcoin’s market capitalization has ranged from $100 billion to $200 billion,  compared to gold stock, valued at $7.5 trillion, putting the relative importance of Bitcoin into perspective.
“It is exactly the aspect of Bitcoin that that is so innovative to traditional distributed databases,” Budish writes, “the anonymous, decentralized trust that emerges from proof-of-work — that makes it so economically limiting.”
Budish is careful to point out that his critique is directed specifically at Bitcoin, and not at distributed ledgers and databases in general. In fact, the paper challenges the tech community to develop a “proof-of-stake” blockchain paradigm rather than “proof-of-work.” 
“Proof-of-stake” would eliminate the cost of labor and energy needed to maintain the blockchain network. Budish points out that mining Bitcoin uses 0.3% of all global energy consumption — a figure that will continue to climb as Bitcoin becomes more complicated to mine.


  1. its a crap platform to be honest and its unsuitable nature to scale with any reliability or true security has always spelled its doom

  2. A bunch of paleolithic libertards that don't understand a damn thing about technology, network economics, or even their own austrian monetary theory. Go fuck yourselves you luddites. You were irrelevant then, are irrelevant now, and will always be irrelevant.

  3. And the Budish article has been refuted six ways till sunday. Learn a thing or two before you mouth off about bitcoin.