Why Is Bitcoin So Inefficient?

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In this video, I discuss why Bitcoin has made the conscious design choice to be inefficient in the interests of remaining neutral and decentralized.

If you want a really efficient monetary system, just use PayPal or Venmo. Centralized services are almost always more efficient, cheaper, and faster than Bitcoin.

But Bitcoin offers neutrality, censorship-resistance, and the ability to shield your savings from central bank devaluation.

Under proof of stake (like Ethereum), if an attacker can gain control of more than 50% of the coins, it's over. If he keeps staking all of his coins, he will eventually control the entire system, as he earns more and more rewards with every block that he wins. At this point, the system is permanently broken and there is no fix.

By contrast, under proof of work, you can always build more mining rigs to fight off an attacker.

So if (blockchain + PoW) is so great, can you create a new crypto by recreating Bitcoin by pairing blockchain with PoW today? You can try, but it's too late. The cat is already out of the bag.

You will never catch up to Bitcoin, which has a 14-year head start.

Also, it's impossible to recreate Bitcoin's immaculate conception in this day of global surveillance. If Satoshi had launched Bitcoin today, all of the 3 letter agencies would know who he is.

Satoshi was also a very rare and special type of person, who was humble enough to walk away from riches and glory.

By contrast, all of the crypto billionaires are still public figures involved in their projects and have been actively dumping on their followers.

Not investment advice! Consult a financial advisor.

Dan Zuver on Bitcoin's inefficiency:
https://twitter.com/DanZuver/status/1700928457918603323

Vitalik Buterin Sold 25% Of His Coins:
https://themerkle.com/ethereum-developer-vitalik-buterin-sold-25-of-his-coins/

Jed McCaleb dumped on the XRP army:
https://en.cryptonomist.ch/2022/07/19/jed-mccaleb-sells-his-xrp/

SEC sues Ripple:
https://www.sec.gov/news/press-release/2020-338

Ethereum Foundation:
https://ethereum.org/en/foundation/

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

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