The Bear Case for Bitcoin

Featuring John Dwyer

John Dwyer, Fintech Analyst at Celent, takes us in granular detail through the bear case on Bitcoin, after a thorough investigation of the paradoxes and structural weaknesses led him to move away from advocacy of the cryptocurrency. John discusses individual challenges such as the 51% attack and devalued mining incentives, and expands to discuss the irony of a centralized controlled mining network, the central flaw in the Bitcoin incentive scheme, and the alternatives to Bitcoin that are addressing these issues.

Published on
19 April, 2016
Topic
Technology, Crypto-currencies, Global Outlook
Duration
38 minutes
Asset class
Crypto-currencies, Currencies, Commodities
Rating
43

Comments

  • bs

    bob s.

    18 1 2018 01:16

    1       0

    Learne.d about Bitcoin at an Agora conference 5 years ago. Never knew of it and I could care less.

    In retrospect how I entirely understood fiat and the bad parts of the system and the merits of gold and silver and missed Bitcoin makes me ponder.

    I stopped looking after it dropped and lost it before the big 2017. Note to all to write everything down and not get lazy. Strikes me that the bitcoin chart in this film prior to its explosion seems eerily similar to the metals chart now!

    But now re-engaging in Bitcoin, I know that it has helped awareness of the fiat disease probably more then anything else. How the public doesn't get gold or especially limited small market cap silver but gets digital money is amazing to me. We are an iphone world and Bitcoin sure has started the conversation.

    The trend is Populism and anti status quo and it is on the rise and is likely to increase with the global debt. The fiat system is breaking in the periphery and needs to be reborn.

    The interview, I am not sure of, anyone asserting to put fiat on the blockchain completely misses the revolution. But clearly has intelligence on the topic. His ether call was impressive. 51% attack is overblown and pretty inconceivable and regulating it and centralizing it again completely misses the point.

    Learning about this brings you to alt coins and the block chain and hashgraph and token fund raising and decentralized crypto exchanges and the fact that bitcoin is really quite small in perspective.

    In conclusion, after this parabolic collapse heals itself on the chart, this trend will continue. The bull case is the following

    1) it is a very small market yet. Let me repeat, it is a very small market and hardly anyone owns it despite the conversation. I understand Raouls comparision to cysco in 99 but it is very very early in the crypto story, maybe 96.

    2) managed funds hardly own any and will soon have to in order to compete with other funds that do. Also this is another diversified asset class with clear benefits to a portfolio outside of stocks, bonds, and fiat. Similar to gold but different. During a crash this may surge in value like other currencies.

    3) my rmb commodities broker says every one is watching hardly anyone is owning yet. Rides the subway and all the brokers say the same thing and that the exchanges are afraid of it.

    4) kids get it but they don't have money to buy

    5) money cannot be counter fit or inflated without people knowing with most coins unlike USD or other currencies

    6) Bitcoin is known through out the world and will be a gateway to other alt coins.

    7) Privacy, taxation, low costs, anti bank. This thing will attempt to solve what gold and silver manipulated couldn't.

    Despite the parabolic chart, after a pullback-Bitcoins trend will continue to roar, how long anyones guess. The cryptos are here to stay and the more the powers at be fight it the more it will grow and attract money, eventually probably from central banks trying to make up losses. The explosive start (the last year) can go a lot further. Nobody owns this asset class yet and the currencies are likely to sink with the debt. These currencies can help us bridge the gap. My prediction is bitcoin will be over 40,000 by next year, some coins maybe up a few thousand percent.
    google
    crypto market caps. it is amazing.

    I have come to the conclusion that anyone who owns gold and silver and doesn't own any crypto at all better spend more time learning about the bull case for crypto.

  • HK

    H K.

    2 12 2017 01:00

    0       0

    IMHO - This is a great interview, Mr. Dwyer's explanation is excellent as to why the long-term life of Bitcoin is shaky at best. No regulation of the miners, centralization of miners, 51% ownership attack, and diminishing incentives for miners are all very valid reasons that bitcoin should NOT and will never be a legitimate crypto-currency. I say this on the day that the futures exchange is setting up to trade bitcoin contracts, go figure.

    The idea of a decentralized internet with a legitimized distributed ledger makes for a possibly interesting future for internet users, at least those that value privacy, security and stability.

  • ek

    eric k.

    30 8 2017 05:56

    1       0

    not sure why we need to issue any fiat currency to blockchain at all; bitcoin is the new world currency right

  • DB

    Douglas B.

    15 8 2017 16:13

    4       0

    This video didn't age well

  • DK

    Dan K.

    21 7 2017 22:38

    4       0

    I would love to see this guy debate Andreas Antonopoulos in a public forum. Id watch that on pay per view. I have yet to meet a bitcoin bear who has a clue what they are talking about.

  • DT

    Daniel T.

    7 6 2017 14:56

    2       0

    VCs backing miners??? what the hack - who let this guy on TV??

  • JK

    Joshua K.

    16 7 2016 05:01

    2       1

    One of the most insightful talks on Bitcoin I've heard (and I've listened to a lot). Good stuff...

  • AS

    Andreas S.

    9 7 2016 18:56

    2       1

    This guy is the archetypical legacy financial analyst completely missing the point about crypto. Instead please bring on more real experts like Tuur Demeester or Andreas Antonopoulos.

  • JB

    Joe B.

    4 7 2016 20:36

    0       0

    The amount of work it takes to secure the network is still significantly cheaper than traditional systems.

  • JB

    Joe B.

    4 7 2016 20:07

    1       0

    He's missing the part about the mining difficulty. Yes if the price drops it makes it less viable to mine btc, but when miners exit due to this, the amount of hash power it takes will lower as well.

  • TQ

    Tom Q.

    10 6 2016 18:41

    0       1

    Interesting to see the bears on this case, I also liked Ben Hunt's recent discussion on the topic.

  • BC

    Brenton C.

    30 5 2016 23:51

    0       0

    Bitcoin within the "regulatory system" isn't that attractive. But outside; there's the real story (and future).

  • SL

    Steven L.

    4 5 2016 16:11

    1       0

    Very happy to see this piece! One other concern for me is the concentration of China based miners. If China literally pulls the plug, what happens? Also miners make the decisions not owners. Problem!

  • nm

    neo m.

    25 4 2016 12:20

    2       0

    The 51% is misunderstood. this 2 minute video explains what it really means to the network (it's not such a big deal)
    https://www.youtube.com/watch?v=ncPyMUfNyVM

  • TJ

    Tay J.

    24 4 2016 19:48

    3       1

    Kudos to Milton&Friends for hosting a thoughtful, opposing point of view, i.e. "Bitcoin is probably flawed."

  • GM

    Gerald M.

    23 4 2016 18:45

    4       2

    The technology problems are real. The infighting is getting worse. A split is a possible outcome. The man on the street doesn't trust it. That's probably not a hill I want to die on.

  • SD

    Shyam D.

    23 4 2016 13:31

    4       1

    The 21co chip has started the journey whereby every computer including our phones will perform the mining. Thus miners will go out of business probably. Mining currently late in cycle. Next.

  • SD

    Shyam D.

    23 4 2016 13:25

    2       0

    cont.. its like talking about the internet not being able to scale in 1994. Who cares? Focus on how this will evolve and what it can offer. Thats the hardest part, not talking about whats wrong now!

  • SD

    Shyam D.

    23 4 2016 13:23

    2       1

    Didn't complete the video. (1) Who the hell is adam newman? (2) Regulation will change to bring btc+blockchain. So talk of existing regulation is a waste of time. (3) BTC is early in its life..

  • MC

    Mike C.

    23 4 2016 00:51

    4       0

    Is this guy related to Mike Hearn?Has Bitcoin failed again for the 100th time.I see that it just broke out of quite the technical pattern-BULLISH on the price and very BEARISH on the noise from John.

  • EK

    Emil K.

    22 4 2016 13:41

    3       0

    Appreciate the point of view. Will simply add Ripple and Ethereum (others?) to Bitcoin in the cryptocurrency portfolio just as T. Demeester suggests in his PDF (check out his interviews on RV).

  • KC

    Klendathu C.

    22 4 2016 11:24

    2       1

    I still own bitcoins, but I'm happy my position is as small as it is. After I'm done looking into the Lithium market I will be studying Ripple and Ethereum.

  • KC

    Klendathu C.

    22 4 2016 11:23

    2       3

    I have watched this video 3x now. Great stuff. My fears about bitcoin were confirmed in simple and understandable terms. And now there's an interesting date on the horizon when the mining value halves

  • NS

    Nathan S.

    22 4 2016 10:59

    8       2

    It would be helpful to have additional, hopefully less naive, bearish perspectives on Bitcoin.

  • GD

    Gustavo D.

    22 4 2016 02:54

    0       1

    Last chart seems a bit flawed if I understand it correctly. The examples at the top (Landline to Internet) are much more similar to Bitcoin than the examples at the bottom (Facebook to Angry birds)lol

  • GF

    Guillaume F.

    21 4 2016 00:59

    5       3

    It is healthy to have different points of view but this interview is such a joke :
    wrong facts, weak arguments and pump of a scam coin...

  • BM

    B. M.

    21 4 2016 00:05

    8       0

    This is taking a block chain and conforming it to current regulatory constraints with kyc, etc. The whole point of bitcoin is the ability to work outside of the current fiat system

  • LH

    Lloyd H.

    20 4 2016 14:48

    8       1

    "Pointless Work" ? because it is not free to create bitcoin (unlike FIAT) you transfer the financial resources needed to carry out the work directly into the bitcoin as stored value in the process

  • jS

    jurgen S.

    20 4 2016 12:31

    10       0

    I'm not convinced but enjoyed his view. I think he made the most sense when he talked about Bitcoin being outside the financial system. At present that is a massive positive!!

  • TM

    Taylor M.

    20 4 2016 10:55

    16       2

    Take this guy with a grain of salt. Get a technical guy on here who actually understands this. Many questionable statements.

  • TM

    Taylor M.

    20 4 2016 10:40

    8       0

    Bitcoin vs Ethereum validity is not Mutually exclusive. We need them both at least for now. Its like NYSE vs NASDAQ respectively. Old vs New. I have invested in both. Get Vitalik Buterin on here

  • MM

    Michael M.

    20 4 2016 03:18

    4       0

    Meanwhile"the first regulated and licensed bitcoin exchange for all 28 countries in the EU" is about to launch.

    http://www.coindesk.com/bitstamp-europe-license-luxembourg/

  • TH

    Timothy H.

    20 4 2016 03:00

    12       0

    Because I'm interested in a store of value--and could give a f**k about democratizing anything financial--I'm also PRECISELY interested in all of this "pointless work" required for Bitcoin.

  • JK

    Jon K.

    20 4 2016 00:11

    2       0

    Good alt view. The chart at 29min mark. Lets hear some technical analysis from Pal, Brandt, Floyd on breakout up/down potential and other technical viewpoints on the 2+ month bitcoin sideways trend.

  • JS

    John S.

    19 4 2016 21:51

    10       2

    Good to hear alternative views. However, keep in mind that he has a non-technical background and a career in banking. BTC has challenges ahead but I intend to hold onto my position.

  • CH

    Christian H.

    19 4 2016 20:40

    6       0

    Positive: Bitcoin is "regulated" by an open source mining software + prove of work = new form of regulation. All current google computing power < 1% of bitcoin mining power. Attacks will be difficult.

  • MM

    Michael M.

    19 4 2016 16:09

    17       1

    If the average daily transactions are rising weekly/monthly and the supply is going to halve, I struggle to understand how the price will drop.

  • RG

    Richard G.

    19 4 2016 16:00

    7       0

    If anyone is interested in hearing a counterpoint on why we DO need proof-of-work type "wasting of resources," Paul Storcz has a great explanation on his blog at truthcoin.info.

  • RG

    Richard G.

    19 4 2016 15:54

    8       0

    It's interesting that he claims that "ALL you would need" is the capital to perform a 51% attack. Would also need support of Bitcoin community. Mining pools can easily break up a move like this.

  • BT

    Brett T.

    19 4 2016 15:20

    11       0

    Lol at banks spending millions of dollars to stay on the write side of the law. They spend millions to write the laws. Bitcoin won't ever work with banks because it was designed to destroy them.

  • SS

    Sam S.

    19 4 2016 14:34

    36       1

    Mr Pal----what is your take on Bitcoin now? You've made a past bull case and now we have a bear case---update please!

  • CC

    Christopher C.

    19 4 2016 14:10

    8       0

    Not to be a downer but... crypto-currencies meet central banks. What could possibly go wrong? :-) Very informative video.