Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Cryptocurrencies â Thematic Research, a report recently issued by Global Data, is attempting to smash what it views as myths and huge untruths about the hype surrounding crypto. Among their findings, the company concludes cryptocurrencies are expensive, slow, mostly unspendable, and cannot scale to meet their projected demand.
Also read: Troll Slayer: Derek Magill Defends Peer-to-Peer Electronic Cash Against Defamation
Cryptocurrencies Expensive, Slow, Unspendable, Cannot Scale
Talk about kicking a fellow when heâs down (assuming cryptocurrencies are male). London-based research firm, founded in 2006, Global Data, released a 34 page study on exactly why they believe crypto wonât ever live up to its hype or promise.
Its Chief Analyst, Gary Barnett, gets to the heart of the matter, âMany of the most basic claims made by proponents of cryptocurrencies simply are not true. We are told that cryptocurrencies speed transfers up, that they help to eliminate middlemen and that they are free of cost, but none of this is true.â Anecdotes abound as to the veracity of his claim, especially as it relates to bitcoin core (BTC), the worldâs most popular cryptocurrency, and the most well known. The ecosystem has famously chosen to employ âmiddlemen,â the very same Satoshi Nakamotoâs white paper was written to avoid, such as banks (Coinbase) and other exchanges that are allowed to hold full control over a userâs coins and tokens.
âCryptocurrency transactions are not free,â Mr. Barnett continues. âFor example, at its peak the per transaction cost for bitcoin exceeded $50, which is not exactly a great way to buy $25 worth of groceries. While the cost per transaction hovers around $1 when the bitcoin network is not under load, it will inevitably rise if transaction volumes grow again.â Here again, the whipping boy is BTC, and no mention is made of viable alternatives in this regard like bitcoin cash (BCH) or others. Perhaps most damning, when considering just what the âcurrencyâ part of cryptocurrency means, Mr. Barnett fires âno cryptocurrency is widely accepted and transacted. The number of retailers and businesses that accept cryptocurrencies as payment for goods and services is vanishingly small, and those that do typically report very low volumes of cryptocurrency transactions by comparison to other means of payment.â This somewhat begs the question, but it might require Mr. Barnett and Global Data to be a little hipper when it comes to the more recent history of BTC in particular. Enthusiasts have taken nuanced sides as to the importance of claims like Mr. Barnettâs, and the differences are so profound in the crypto space entire projects exist to prove the others wrong. Plus, it is early days with regard to merchant adoption â constant mainstream media hectoring, along with governments the world over threatening ever tighter regulation, doesnât help matters.
The Scaling Issue Continues to Haunt
Global Data hammers home a key bugaboo with regard to crypto, scaling. For âbig blockers,â this issue seems to trump most. With the advent of bitcoin cash (BCH), larger blocks allow for more transactions, less congestion, and ultimately lower fees and faster confirmations, at least in theory and so far.
Nevertheless, the report concludes âcryptocurrencies cannot scale. The Visa payment network is capable of supporting 24,000 transactions per second (tps) at peak rates and regularly averages in the region of 1,500 tps. Bitcoin, meanwhile, struggles to achieve a transaction rate over 10 tps, while bitcoin cash can handle around 60 tps. The only cryptocurrency which comes close to Visaâs average is Ripple, which is capable of 1,500 tps.â
And so, mainstream research firms such as Global Data are left to muse about the current state of crypto valuations. As âcurrently applied to cryptocurrencies,â Mr. Barnett stresses, they âhave no basis in fact; cryptocurrencies represent a classic bubble, in which valuations are purely the result of speculation on the likely behavior of the market rather than a clear-eyed assessment of underlying value.â No mention is made of it being only near a decade in arriving at valuations, and how currencies such as BTC are up thousands of percents since their inception. Bubble doesnât seem, yet, to describe crypto prices well.
The reportâs lone sober take, though still mired in mainstream cynicism and assumptions, comes as a preface. âIn fairness,â researchers note, âall currencies are a confidence trick. The US dollar, British pound, and the Euro all depend on nothing more than market confidence for their value. The extent to which a currency works effectively is a function of a range of factors and this report sets out to determine whether cryptocurrencies represent a serious alternative to the established fiat currencies.â Few crypto proponents would claim decentralized money to be quite there, but, then again, government money has had a huge head start.
Is crypto a failed, over-hyped experiment? Let us know in the comments section below.Â
Images via the Pixabay, Global Data, Shutterstock.
Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from Bitcoin.com.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.