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I was pretty bullish about bitcoin and blockchains from 2012 to 2014. I've gotten steadily more skeptical since then. At this point I'm quite pessimistic that blockchains will turn out to have economically or socially significant applications.
In 2012-4 critics pointed out that Bitcoin wasn't really useful for anything, but there was an easy response: this is still a young technology with a small community around it. Once more people tinker with it someone will figure out useful applications with mainstream appeal.
But now venture capitalists have poured hundreds of millions into blockchain startups for each of the last five years. Plus projects have raised millions more from ICOs. And I still haven't seen any examples of blockchain applications with mainstream appeal.
Instead we've gotten an ouroboros of companies building infrastructure for trading, investing in, and storing cryptocurrencies.
Bitcoin is useful largely for providing liquidity for people wanting to buy more obscure cryptocurrencies. Why are those other cryptocurrencies valuable? To a large extent people seem to be betting that they'll be the next bitcoin.
A land rush the size of the 2017 cryptocurrency boom can create an illusion of financial viability for quite a while. Lots of people made money and they want to believe that it wasn't just pure luck.
So they start building companies. And the companies start buying services from one another. Some of those companies become profitable as a result, which makes it seem plausible that much larger profits could be ahead.
But long-term sustainability requires building applications that people outside the blockchain bubble find useful. And so far examples of this have been few and far between. Black-market drug markets are probably the most compelling use case.
The other plausible case for bitcoin's long-term value is as digital gold—a way to store wealth in a form that's easy to conceal/move and hard to expropriate. But if that's going to be Bitcoin's main long-term application then a lot of the surrounding activity is a waste of time.
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