The trouble with Bitcoin

In the 19th century and until the 1930's there were big monetary instabilities. Economists found ways to stabilize the money by central banks. However the Bitcoin community still never heard about that problem and solution, and keeps blindly believing that the instability of the value of the bitcoin is just due to the fact it is not popular enough and it will naturally become stable by the magic of being popular, just because, as usual currencies are now relatively stable since a few decades, the very existence of the problem remains completely ignored by people who specialize in cryptography and have no clue about finance.

So, what is their belief ? That there would exist a stable amount of needed currency in circulation.
This is ridiculously false : whenever someone has a piece of currency, there is no reason to keep it, since, at best if we assumed its value to be stable, it would just follow the world's economic growth, which is lower than the average real interest rate one can get by investing this money somewhere, thus having in hand no more that piece of currency but something else : some stocks, an amount in a bank account which reflects a loan being done to a productive company... so, some convention of asset that is not itself the object of ownership like a piece of gold would be, but that is the ownership of something else, a share of real productive thing or company. These more productive forms of value ownership have the property that the expected total sum in circulation is zero, as positive amounts are the counterpart of some negative amounts, usually debts that companies will have to pay to the owners of positive amounts.
Now the expected virtue of a digital economy is that it will provide people more fluid means for anyone to immediately exchange any unproductive currency they would hold (with low expected real interest rates), into productive values (following the market-stable real interest rate). In these conditions, the limit of ideally needed amount of total value of unproductive currencies in circulation, such as bitcoins, is... Zero !
So, the ideal stable value of a bitcoin, as defined by the ratio of the total needed value of currency (ideally zero) by the number of units in circulation (some total number more or less determined by the bitcoin system), is, logically, zero too. In such conditions, expectations of stabilization of value in % per period of time, are very unrealistic.

Not only this, but also, consider the question : what do you think should happen every time someone creates a new online currency working a bit better than the previous one, in a way or another ? Some Bitcoin 2.0, working independently of the current Bitcoin. How can all the people now owning Bicoins, exchange them all into Bitcoins 2.0 ? Of course, the answers is that if all bitcoin owners try to exchange their coins into a new currency, they cannot do it but will just lose all the value they owned, because, with whom will they do that exchange ? nobody will buy them ! You can contrast this with the case of central banks which, no matter how ugly it looks to think that our money is controlled by central institutions, still have the remarkable advantage that, every time we need an update in the currency (such as switching from former national currencies into euros) they politely accept to collect all the old stuff and provide the new one in exchange. Something that won't happen with bitcoin since it is so wonderfully decentralized that nobody will be there to guarantee that its value does not fall to zero. Apart from this, well, experts in computer security are confident, they can guarantee to you : Bitcoin is absolutely secure. If you have bitcoins and you keep them carefully in your smartphone, if you do not accidentally break it nor put it into your bath, you do not forget it in a cloth that you put into the washing machine, no pickpocket takes it and it is not infected by any virus, then you can be sure, your bitcoins will remain yours. Oh yeah.

Now, just think about it : is it really serious to expect the world to adopt a system with the remarkable feature that, once widely adopted, it will require the whole world economy to collapse every time it will need a little update ?

Not that I like the idea of central control of anything ; actually I have my own solution of a decentralized online currency, without central banks. But the point is that it needs completely different foundations than Bitcoin in order to avoid that trouble. Bitcoin is worthless. It is not a step in the right direction. It is a step 1 century backwards. We cannot build any serious online currency if trying to keep any concept in common with that shit, just like the light bulb was not invented by improving the candle.

This was written as part of a long exposition on the topic : On humanity's failures to steer itself properly