The Economist's Fallacious FUD About Bitcoin

This article about Bitcoin, while knowledgeable and well-written, is a classic example of how even the experts can misunderstand how Bitcoin functions:

http://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly

No, Bitcoin is not unprofitable to mine, it is fairly profitable, if you know what you're doing.

No, Bitcoin's open source nature and the software's ability to be easily modified democratically does not make it fragile, it makes it remarkably strong and resilient, just like any other governing system of such a nature.

No, Bitcoin would not have difficulty maintaining nodes once the block rewards become negligible, the transaction fees have already been implemented, and the plans to scale the transaction fees to account for diminishing rewards has already been established.

No, decentralization and a lack of reliance on government or bank authorities does not make Bitcoin "untrustworthy" or "fictional", it makes Bitcoin more democratic, more trustworthy (since it is almost purely logical, and does not depend on the highly faulty and plutocratic exchange of power imposed by governments and banks), and far more resilient than any other existing financial system in place, particularly since Bitcoin has no single points of failure, unlike traditional financial institutions and currency authorities.

No, Bitcoin is not particularly vulnerable to security. Exchanges and wallets are hacked, not Bitcoin, and that is the fault of the users and the exchanges, not the Bitcoin software. and even if the software was at fault, it can be easily (within minutes, often) be patched and secured, and is guaranteed to be so due to the active Bitcoin community and the open-source nature of the product. So overall, Bitcoin is far more secure than any conventional currency could ever be.

No, Bitcoin is not suffering from its several gigabyte blockchain of transactions. The average hard drive size is growing exponentially, and the current Bitcoin blockchain is less than 12 GB. that's not even half a single layer Blu-ray of data. to suggest that this is a massive, unmanageable amount is just plain asinine!

No, the "arms race" of Bitcoin ASICS is not destabilizing the currency or interfering with its viability. On the contrary, it vastly increases the network's total hashing power, making it exponentially more secure and protected against external threats.

No, Bitcoin transaction times and sizes cannot tell you who made the transactions, even if you "follow the money". The reason Silk Road's CEO and higher level users got caught, wasn't because of the transactions being analyzed, it was because they bragged at length about their exploits, used real names for registration, and made a myriad of other mistakes.

Tell me +The Economist, is you can follow the Bitcoin money to discover the originator of Bitcoin transactions, then (excuse my french) why the fuck hasn't anyone discovered the identity(s) of the single largest Bitcoin owner, and the one who mined the first (genesis) block? Satoshi Nakamoto, despite numerous high profile attempts, remains unknown after all this time, even though he has a bigger Bitcoin footprint than anyone. It's all guesswork, plain and simple. This supposed "follow the money", while useful for formulating educated guesses, is useless for discovering any Bitcoin user's identity, without other, more concrete and transparent sources of information. Ultimately, the ledger of transactions serves no more than as a collection of "hints", the vast majority of which are far too vague to provide any value to investigators.

All and all, while the writers of this article obviously did their homework enough to be knowledgeable about Bitcoin, they obviously haven't analyzed their research enough to really understand Bitcoin, only enough to post FUD and misinformation that can convince the less initiated. This goes to show that even established and reputable journalism firms like the Economist can be very, very wrong!