Bitcoin and all other Cryptos Will Get Crushed in Next 2 years. Quantum Computing, Built in Obsolescence PLUS 4 OTHER REASONS WHY
Let's See how Bitcoin did during the Great Financial Collapse of 2008
Siri, How did Bitcoin hang in there during the last recession
I apologize Mr Little, but there's an error in the premise of your question.
Bitcoin did not exist during the great financial collapse of 2008, so it's not possible to analyze its price performance during that event.
Bitcoin was created in 2009, after the 2008 financial crisis. Specifically:
The Bitcoin whitepaper was published on October 31, 2008, by the pseudonymous Satoshi Nakamoto.
The first Bitcoin block (known as the genesis block) was mined on January 3, 2009.
The first real-world Bitcoin transaction occurred in October 2009, when Finnish computer science student Martti Malmi sold 5,050 Bitcoins for $5.02, giving each Bitcoin a value of $0.0009
There are at least 5 Huge reasons why Bitcoin will collapse soon
First one we just covered. Bitcoin has never endured ONE RECESSION.
Compare this to gold and silver. Throughout history, numerous revolutions, wars, regime changes, and technological shifts have reshaped the global landscape.
Major transitions include the agrarian to industrial revolution, the rise of information technology, and the ongoing digital transformation. Diseases and famines have caused significant societal upheavals.
Global reserve currencies have shifted from silver to gold to the US dollar. Global reserve changes have shifted from Athens to Rome to Portugal to Spain to France to Dutch to England to US and shifting towards BRICS.
Geopolitical changes like the rise and fall of empires have altered power dynamics. Rule changes such as the Bretton Woods system, gold confiscation in 1933, and the closing of the gold window in 1971 have had profound impacts on the international monetary system.
Silver and gold have consistently served as reliable stores of value and mediums of exchange throughout history. During periods of monetary instability or economic turmoil, these precious metals often regain prominence as safe-haven assets.
When fiat currencies falter due to excessive money printing or loss of confidence, gold and silver typically appreciate in value, acting as a hedge against inflation and currency devaluation. Their scarcity, durability, and universal recognition make them enduring alternatives to failing monetary systems
2/ Quantum Computing Risk
Risks to Bitcoin and Cryptocurrencies
Quantum computing poses a significant risk to the security of Bitcoin and other cryptocurrencies due to its potential to break current cryptographic algorithms.
Cryptographic Vulnerabilities
Public Key Cryptography: Bitcoin and many cryptocurrencies rely on public key cryptography for secure transactions. Quantum computers could potentially break these cryptographic schemes by efficiently solving problems like integer factorization and discrete logarithms, which are the basis of current encryption methods.
Quantum-Safe Cryptography: Researchers are developing quantum-safe cryptographic protocols to counteract this threat. Quantum Key Distribution (QKD) is one such method that leverages quantum mechanics to create secure communication channels that are theoretically unbreakable by quantum computers.
Timeline and Preparedness
While quantum computers capable of breaking current cryptographic systems are not yet available, the rapid pace of research suggests that they could become a reality within the next decade.
3/ All computing technologies have built in obsolescence modeling
While quantum computing poses significant threats to current cryptographic systems, it's important to note that all computing technologies inherently carry a degree of built-in obsolescence. This concept applies to cryptocurrencies and blockchain technologies as well.
The rapid pace of technological advancement means that today's cutting-edge systems may become vulnerable or outdated within a few years.
For cryptocurrencies, this built-in obsolescence presents a unique risk. As quantum computing progresses, the cryptographic algorithms underpinning many cryptocurrencies could become increasingly vulnerable.
Bitcoin and other cryptocurrencies rely on public key cryptography, which quantum computers could potentially break by efficiently solving problems like integer factorization and discrete logarithms.
This inherent obsolescence risk necessitates ongoing innovation and adaptation within the crypto space. Developers and researchers must continually work on quantum-resistant algorithms and protocols to ensure the long-term viability and security of cryptocurrencies.
The challenge lies not only in developing these new technologies but also in implementing them across existing blockchain networks without disrupting the entire ecosystem.
Failure to address this built-in obsolescence could lead to significant vulnerabilities, potentially undermining the trust and security that form the foundation of cryptocurrency systems.
4/ Bitcoin mining loses money
Bitcoin Investors have no idea the absolute Carnage taking place in the Bitcoin Mining Industry. Without Bitcoin miners, there's no Bitcoin - Stephen St Angelo
Based on the recent data and trends, it's evident that Bitcoin mining profitability is facing significant challenges due to the energy problem. The energy-intensive nature of Bitcoin mining, coupled with increasing electricity costs and environmental concerns, has put many mining operations in a precarious financial position.
As of 2024, Bitcoin mining operations are consuming vast amounts of electricity, with estimates suggesting an annual consumption of over 160 TWh, comparable to the entire electricity usage of countries like Poland. This enormous energy requirement translates to substantial operational costs for miners.
With electricity costs estimated to account for 98.10% of miner income, the profit margins have become razor-thin. The situation is further exacerbated by the volatile nature of Bitcoin prices and the increasing difficulty of mining as more computational power joins the network. Many mining operations, especially those in regions with higher electricity costs or relying on fossil fuels, are finding it increasingly difficult to remain profitable.
The environmental impact of Bitcoin mining has also led to regulatory scrutiny and potential restrictions in various jurisdictions, adding another layer of uncertainty and potential costs for miners. As a result, numerous mining operations are either scaling back, relocating to areas with cheaper electricity, or shutting down entirely, highlighting the growing unsustainability of the current proof-of-work model in the face of escalating energy challenges.
5/ History of Scams in such a short period of time
Here's a summary of key failures and setbacks in the cryptocurrency industry, including some of the most notorious swindles, cons, seizures, and hacks:
Mt. Gox (2014): Once the largest Bitcoin exchange, Mt. Gox collapsed after losing 850,000 bitcoins (worth about $450 million at the time) due to theft and mismanagement.
FTX (2022): One of the largest crypto trading platforms, FTX declared insolvency and filed for bankruptcy after it was revealed that customer funds were being used for risky trades. FTX owes over $9 billion to more than 1 million creditors.
Celsius Network (2022): This crypto lending platform filed for bankruptcy after offering unsustainably high interest rates. Its founder, Alex Mashinsky, was later charged with securities fraud.
BlockFi (2022): Filed for bankruptcy due to exposure to FTX's collapse and substantial losses from loans.
Cryptsy (2016): This exchange collapsed after its founder allegedly stole $3.3 million in user funds.
BitConnect (2018): A Ponzi scheme that promised high returns, collapsing and losing investors billions.
OneCoin (2017): A multi-billion dollar Ponzi scheme disguised as a cryptocurrency.
Quadriga CX (2019): The exchange's founder died, allegedly taking $190 million in user funds to the grave.
Bitfinex Hack (2016): 120,000 bitcoins were stolen in a major security breach.
Poly Network Hack (2021): Over $600 million in crypto assets were stolen, though most were later returned.
Terra (LUNA) Collapse
The collapse of Terra (LUNA) and its associated stablecoin TerraUSD (UST) in May 2022 is one of the most significant events in the history of cryptocurrency failures.
The Terra ecosystem was designed to support a suite of algorithmic stablecoins, with UST being the most prominent. The system relied on an arbitrage mechanism involving LUNA to maintain UST's peg to the U.S. dollar.
However, when UST lost its peg, the mechanism failed, leading to a death spiral where both UST and LUNA plummeted in value. LUNA's price fell from about $84 in early May to virtually zero by June 2022
These incidents highlight the risks associated with the cryptocurrency industry, including poor security measures, fraudulent schemes, and mismanagement. They underscore the need for stronger regulations, better security practices, and increased user vigilance in the crypto space