Is Bitcoin a Scam?

Etherium 2.0's move to proof of stake will help with the ridiculous energy usage that bitcoin has, but I don't see a blockchain ever being able to handle the traffic of a major card processor like visa. Even with sharding, your latency between shards compounds to the point where the UX is degraded.

What I see value in for a blockchain is store of value (which arguably is basically a pyramid scheme), smart contracts for provable logic-based transactions, niche database uses, and as you brought up: drugs (or more accurately, private/anonymous payments). Bitcoin is really a poor choice for both the smart contracts and niche databases, which leaves it with store of value and drugs. Once law enforcement legislates it to the point where it becomes impractical for drugs, at that point it is just a store of value. It holds no use except to become more valuable the more people buy into it, which is just a pyramid scheme.

But you can’t actually use Bitcoin for anything?

The Regression Theorem, first proposed by Ludwig von Mises in his 1912 book The Theory of Money and Credit, states that the value of money can be traced back ("regressed") to the goods and services it obtains. In other words, money is backed by some commodity that has intrinsic value.

Recently, there has been a debate about applying Regression Theorem to Cryptocurrency such as Bitcoin.[1] Since Bitcoin (for instance) is not backed by any commodity, it appears to fail the definition of a currency according to the Regression Theorem. Others hold the view[2] that Bitcoin does fit the definition as it is at once a payment system and money, with the source of value being the payment system.

> Proof of work is inherently wasteful.

But it's a necessary evil for a _distributed_ currency. It's a way to protect payment validation from being controlled by a single operator by making a "hostile take over" very expensive. IMHO criticizing Bitcoin for its "proof of work" algorithm only converys a serious lack of understanding of how crypto currencies actually work.

There is an alternative, namely, the "proof of stake" scheme that Ethereum is going to switch over to but it has other short comings that might or might not outweigh the benefits of energy savings.

> - The ever expanding blockchain is wasteful (in storage, computation, network).

Well, the blockchain's current size is 323.54 GB. That's quite a lot but can be stored easily on a $100 SSD. Using $100 worth of storage to maintain an asset market of roughly 600 billion dollars is useful trade off, I would say. Of course, I know the blockchain is being replicated all over the planet but Google's cloud storage probably dwarves its storage requirements.

> - The throughput is way too slow.

Yes, 10 minutes is not very fast. However, compare that to inter bank transactions and this number seems blazingly fast again. However, in my opionion Bitcoin is emerging as an alternative to gold that's primarily used for storing value over long times. It's primary purpose will not be to maintain payment networks. This role will be taken by Ethereum or other alternatives like Stella Lumens, Loopring or Polkadot.

Doesn’t deserve to be down voted. If the estimates of the energy Bitcoin uses are accurate, then now we have a moral imperative to not use Bitcoin. That could be a really important consideration.

>It's a tech prototype that enabled large-scale gambling.

Worse than that. But there is a dimension hinted at in the article that makes this not a good asset either. That is, the fact that a dozen or two large syndicates have deployed specific specialized hardware located in Iceland, Iran, Venezuela, and China etc., is not a reasonable guaranty of the future security of compute and network power in the system. Simply having computer power now linked in a global Internet does not bestow real world power. The U.S., E.U., have strong currencies backed by real world strength. Bitcoin on the other hand is a commercial ledger for drug, fraud, gambling, extortion, and money laundering transactions. It's the modern day Barbary Pirates, or take your pick of any other geographically-centralized pirate community. As pirates learn, when they achieve a sufficient notariety, entity-decentralization ceases to be a true protection.

It's been 10 years, Bitcoin still is as useless as it was in 2010, but it steadily is gaining notoriety.