Why I Hate Bitcoin

by Axel Boldt

1. Wasteful

• Uses about 0.5% of the entire world's electricity production, which is roughly the power of 15 constantly running nuclear reactors. [source] 

2. Useless

• Few legitimate merchants accept bitcoin.
• Not scalable: network maxes out at about 5 transactions per second.
• Transactions take a long time to be recorded in the blockchain; afterwards they cannot be retracted.
• There are many faster and cheaper ways to transfer electronic funds internationally.
• A poor store of value: price is highly volatile and it is unknown whether Bitcoin will remain usable in times of crisis.
• Main use today: speculation. Minor use: crime.

3. Insecure

• Bitcoin exchanges keep the private keys of their customers’ bitcoin holdings. Several large bitcoin exchanges lost customers’ deposits after having been hacked. [source]
• Wallets kept on personal computers are difficult to secure. Because of zero-day exploits, wallets should be kept on "air-gapped" (offline) computers. You have to consider the risks of hardware failure, hacking, extortion [source], death.
• You need to trust escrow services and/or companies that claim to store bitcoin securely.

4. Enables crime

• Bitcoin is the currency of choice on the dark web, to buy drugs, counterfeit money, forged identification papers, child porn, stolen credit card numbers, zero-day exploits etc.
• Bitcoin and similar cryptocurrencies are used in extortion schemes called “ransomware”, where the computer systems of companies, hospitals, city governments and private individuals are disabled by hackers.
• Numerous illegal “mixing services” and “coinjoin privacy wallets” exist to aid in laundering bitcoin: you send in bitcoins and specify a return address; bitcoins from other participants will then be sent to that address. [source] While US cryptocurrency exchanges must keep identifying information about their customers, it is possible to anonymously buy cash at dark web marketplaces with bitcoin. [source]
• Tether, a centralized cryptocurrency pegged to the dollar, is often used to buy or sell cryptocurrencies. It is controlled by bitfinex, the largest cryptocurrency exchange. It claimed that it holds $1 in cash for every Tether mined, but later admitted that this was not true. In 2017, bitfinex drove up the Bitcoin price by buying Bitcoin with Tether. [source]
• Price manipulation schemes that are illegal when applied to stocks are legal when applied to Bitcoin.

5. Susceptible to centralization

• Miners ultimately set the rules and will resist rule changes that aren't in their interest, e.g. replacing proof-of-work by proof-of-stake.
• Miner cartels may form. Once a cartel achieves a majority of mining power, it can change the rules in their favor or seek rent in other ways. Such a cartel could also start a double-spend attack and thereby create a final large windfall before destroying the network.