171017 Bitcoin: What Could Possibly Go Wrong?

Based upon prima facie evidence Bitcoin could become the preeminent currency in the world, representing hundreds, if not thousands, of billions of dollars in commerce.  Bitcoin could, in a few years time, march up to a valuation between $500K and $1MM.  If we had to guess, based on this past month’s performance, those are not wild fantasies.  We can dream, can’t we?  Elst what’s a heaven for? What could possibly go wrong?

Well… the first, most obvious monkey wrench in our plans was defined, in no uncertain terms, by Jamie Dimon, CEO of JP Morgan Chase, when he reiterated his dire prediction for the cryptocurrency, “Governments will crush Bitcoin.”  How fast Bitcoin trading could be halted was evidenced in China just three weeks ago when the Chinese called a halt to all ICO’s.  Russia was the latest government to ban Bitcoin but called for their own cryptocurrency, CryptoRuble, instead.  We all understand what that’s about.

A more nuanced approach to halt Bitcoin’s rise might be expected from Wall Street, which is a euphemism for the big banks and the world of finance, in general.  It wouldn’t take much before big bank lobbyists were rewriting the banking laws and tax laws to prohibit Bitcoin trading, in state after state.  I  recently tried to signup for a new Bitcoin exchange only to be told they were not doing business in New York State yet.  What could possibly be slowing them down?

What frightens me the most, however, is the possibility that fraud within the Bitcoin network itself might bring the whole thing crashing down.  I don’t enjoy hearing the kind of discussions that explore the possibilities of Bitcoin actors behaving badly.  I don’t like to think about all the power a few very large mining operations possess.  As clever as blockchain technology is, there are some very smart programmers out there that can explore all sorts of weaknesses in the system for evil.  It happens every day.

So it behooves us all to go cautiously, lest we take our eye off the prize.