Wednesday, March 27, 2019

Senior Berkeley Researcher: Bitcoin is Nothing More Than ‘Bovine Excrement’

Nicholas Weaver – a senior researcher at the International Computer Science Institute at Berkeley – once said that blockchain and cryptocurrency should both be “burned with fire.”

According to CCN, he continued his attack most recently during an interview on the latest episode of Bloomberg’s Odd Lots podcast. He said:

So what happened when the cryptocurrencies first came out in 2010 and 2011 is most people who looked at it with technical understanding went, “Oh, this is bovine excrement, and walked away.
The big fatal flaw is that it doesn’t actually work as currency. If you can’t use it as a competitor to all the other actual digital currency systems we have, like, oh, PayPal…. All of these payment systems are vastly more efficient than the cryptocurrencies...
He also warned that that proof-of-work (PoW) cryptocurrencies like bitcoin could enter a “death spiral.”

There’s two things that can really burn the system with fire. The first is the federal government getting their act together and going after this cryptocurrency called Tether….If Tether is destroyed, that…removes the entire bitcoin exchange ecology.”

“Number two is…[a] death spiral situation,” he said, warning that if the bitcoin price falls too precipitously then the network would lose its security as unprofitable miners flip off their machines.

Weaver takes comfort, CCN reports, that, if nothing else, at least cryptocurrency is “comedy gold.”

-RW

11 comments:

  1. I know someone (who shall remain nameless) who uses Bitcoin as a sanctions work around for payments from Russia. It's like a bank wire without the fees. As soon as the Bitcoin is credited, it's converted to USD, thus minimizing the valuation risk. Works pretty well as a Western Union substitute.
    Jus' sayin'.

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  2. Yes, when I first heard of bitcoin and it was something like five cents for one bitcoin I did declare it "bovine excrement" and still believe it is such. That said I wish I had understood the stupidity of others and put $20 into it then.

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  3. Always amazing that this blog and others never miss a chance to denigrate crypto currencies, yet celebrate technological advance, experimentation, and entrepreneurship in other areas.

    Is it because the early supporters of bitcoin promoted it as money, a sacred area of Austrian thought, subject to the laws that Mises gave us (the regression theorem)?

    Has Weaver ever looked into all the other uses of cryptos beside being a currency?

    Could bitcoin and other cryptos fail? Of course they could. But there's something creepy about the glee with which someone like Weaver points out potential problems and tries to steer people away from this interesting area of applied cryptography.

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    1. I agree too. Why should it matter if consenting adults want to trade in beaver pelts? In a free society, people would use whatever mediums of exchange and stores of wealth they want. Let money have competing alternatives.

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  4. Look back at this blog. Wenzel suggested buying and selling twice for substantial profits. His criticism has been it is not anonymous (should be obvious at this point) and it is not money (fails to arrive via regression theorem).

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    1. Agreed. Plus he pointed out the absurd belief of some people that the fact that it uses up electricity to do the mining makes it inherently valuable. If that's the case, an old car must be extremely valuable because of all the gas it used up to get those miles on it.

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  5. People that bought into the Bitcoin shell game are fools plain and simple. Sure they may have made quick money but when the crap blockchains sees real scrutiny I expect a lot of howling laughter

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    1. I detect a point of view not based on knowledge.

      And if it turns out not as you expect, may we treat you to howling laughter?

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