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Are we seeing the end of Bitcoin

Bitcoin is the hottest cryptocurrency. It has seen its value increased by a few hundred times to reach a high of US$60,000.

I believe that bitcoin will crash within the next few months and may disappear entirely.

Here are the key features of bitcoin.

a) Bitcoin is based on the block chain – which is a distributed ledger. It requires the entire ledger and transactions to be districted to many parties for validation. This was supposed to ensure security of the ledger.

b) Bitcoin requires the validators, also called “miners” to solve a complex mathematical equation to prove their work in validating the database. This method consumes a lot of energy.

c) Bitcoin was supposed to be anonymous. The identify of the people making and receiving the bitcoin are kept unknown.

d) The number of bitcoins is controlled and allowed to increase at a modest rate over a number of years. This was supposed to preserve the bitcoin, similar to physical gold which can only increase by a modest quantity each year due to the high cost of mining.

Here are my reasons why the above features of bitcoin will cause its downfall.

a) The concept of the blockchain is flawed. It is not sensible to send out the entire and transactions several times a day to thousand of miners for validation. When the database becomes large, the workload becomes unmanageable. This has already happened due to the recent interest in bitcoin.

b) There are better ways to appoint a few parties to validate the work without going through the expensive process of solving a complex mathematical puzzle that requires a large amount of energy to be spent. To overcome this disadvantage, some other crypto currencies adopt a different method of “proof of work” compared to bitcoin.

c) The myth of anonymity had been broken. As the distributed ledger and transactions are sent to many parties, it is possible for any party to trace through the transactions and identify some of the parties involved. This has happened in the recent payment of $5 million by Colonial Pipeline as ransom payment to the hacker called DarkSide. The investigators was able to trace the account numbers that made and received the transfers. Furthermore, they were able to identify other payments, amounting to another $80 million or more made by other parties to DarkSide.

d) Due to the scarcity of bitcoin, there was big speculative buying of bitcoin that caused its price to rise to astronomical level. This is the classic example of a bubble. When the holders realize that the bubble will burst, they will sell the bitcoin, causing a crash.

I expect that the crash will happen soon.

 

Tan Kin Lian

 

 

 

yyy
READER COMMENTS BELOW

25 Responses to “Are we seeing the end of Bitcoin”

  • MarBowling:

    Tan Golden Chain,

    Joker Ark’s Cathie Wood has proclaimed that the price of BITCOIN will hit US$500,000!

    Folks will wait and see WHO THE HELL IS RIGHT in this Mother of all PONZI SCHEMES OF THINGS on planet earth!

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  • xoxo:

    From ZERO TO HERO!
    Will it go back to be ZERO?

    BIT-coin ,as the name suggests,has indeed BITten not a few reckless and greedy smallish retail-$peculators and likely coiny those who received a ma$$ive FURLOUGH LOOTED FROM ordinary sgs’ RESERVES by none other than supposedly well-trained former MAS TOP SHOT,H$K?

    Guess,ordinary sgs who received a pathetic $600 has not enough to buy food to put on the table???

    Wtf are these PAPple thinking?!

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  • Harder Truths:

    I am waiting for your articles on childbirth or brain surgery. There are many eminent professionals out there who are waiting for your pearls of wisdom.

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  • xoxo:

    Speculators ,both retail and financial indtituions’ professional dealers used to KPKB about currency meltdown but none of them complain about CRAPtos(er,cryptos) MELTDOWN$,twice in a year’s course?

    At least currencies are pegged to gold reserves of sovereigns but what about cryptos?

    If we cannot even trust even sovereigns,how come we place our complete trust in some PRIVATE MINER$’ RELIABILITY?

    Guess younger citizens of this world just simply worship ANYTHING DIGITAL?

    Maybe,they should should oso have DIGITAL SEX?

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  • Soccerbetting2:

    I guess Mr Tan Kin Lian maybe right that bitcoin will crash .
    However crash and total collapse of bitcoin are two different thing .Bitcoin may crash but will it totally collapse unrecoverable ? I really doubt bitcoin will totally collapse .There is always some behind forces that may acquire,takeover control, speculate,invest,merger,….or whatever terms one may called it to push bitcoin up again .So it is unlikely bitcoin will fully collapse .I am no investor in bitcoin or cryptocurrency though .And there are so many different type of crptocurrency in this world with bitcoin the nost well known.Crypto currency goes well with digital platform which Singapore is moving into ! However cryptocurrency is another form of risky digital currency that may collapse country in the future ! And what about the con people carbon credits transfer trading too ????

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  • xoxo:

    Crypto currencies it the current form cannot exist.
    People complain about regulators but arent cryptos * MINED N managed* by CRAPPY people
    Just see how filthy rich n greedy individual$ likevElon Ma$k can conveniently cause a lightning meltdown?

    There must be stability and order?
    Either CRYPTOs get better regulated or they become CRAPtos?

    PS: Crypto miner$ want to be regulator-free?
    Who decide the FAIR VALUE OF STORAGE AND OF EXCHANGE then.
    Ironically,CRYPTOs are priced in US$ when cryptos miners claim intention for cryptos to be fully independent?

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  • maths idiot:

    “Kiang dio ho, mai gay kiang”. You rather be right than rich. Bitcoin, it has got life of its own

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  • simple man:

    “mai tum sim,tan soo tua chee”.
    Greed will kill you.
    Bitcoin can bite.

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  • old man:

    @maths idiot

    Mai kay kiang.
    Tan see kiaw kiaw.
    Bitcoin,it will bankrupt you.

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  • beng:

    BITCHcoin?
    Scary ,up and down.
    Up and down,down,down.
    I was a clown who got drown.

    Be careful guys.

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  • Heartbeats:

    Go watch the Netflix movie about bitcoin and how scammer works since 1700

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  • maths idiot:

    Even Nouriel Roubini has been wrong the last few years about bitcoin, don’t say you, a fail CEO. Kiasi, “than boh lui”

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  • Bystander:

    He who calls the piper pays for the music.
    You play,you win,good.
    You play,you lose,blame yourself.

    As for me,this is not even speculation,it is madness.

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  • xoxo:

    If we say BOTCOIN N OTHER CRYPTOs are to replace CURRENCIES,then,they must not be pegged to A CURRENCY they are trying to replace?

    It does not offer any sense.
    If U$ and other sovereogns’ currencies are removed because you want to remove REGULATORY CONTROLS,then why do people HAVE TO PUT THEIR UNQUESTIONING TRUST IN THE HANDS OF CRYPTO MINERS WHO ARE PRIVATE ENTITIES DECIDING WHAT YOUR *MONEY* IS WORTH?

    IF THERE BE NO MORE CURRENCY,WHAT A BITCOIN OR ETHERIUM BE VALUED AGAINST?

    CRYPTOS CAN NEVER BE OFFICIAL STORE OF VALUE,STANDARD MEDIUMS OF EXCHANGE IN THEIR CURRENT FORMS?

    AND IF YOU HAVE SO MANY TYPES OF E-COINS,WONT THERE BE NO ACTUAL SINGLE STANDARD THAT BITCOIN AIMS TO BE?

    Maybe some BITCOINERS can enlighten us?

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  • xoxo:

    In its current form,me can only say it is financial insanity!

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  • xoxo:

    And,what is MEDIACOCK TRYING TO DO tecasting a special on BITCOIN N CRYPTOs???

    Are MAS OR TEMA$ICK OR GIC bigly owners of these Bitcoin fetish?

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  • xoxo:

    Perhaps before small investors want to put their little hardearned money into *high-yield*(as CNA invited experts said) bitcoins etc,they want to RECALL THE GREAT LEHMAN BROTHERS MINIBOND peddled aggressively by DBS ‘ top execuTHEIVE$ NOT TOO LONG AGO?

    BE CAREFUL everywhere there are $cams,even the banksters?

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  • xoxo:

    I admit may look *BACKWARD* but let me just say i am not against CHANGE.
    CHANGE FOR THE BETTER IS GOOD.
    BUT,CHANGE FOR SAKE OF * CHANGE* IS STUPID.

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  • Bitcoin risky:

    Bitcoin investment is very risky.
    Play only if you can afford to lose.
    Easily affected by big players and regulators….
    China just take action against Bitcoin mining….price crash.

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  • maths idiot:

    At least Nouriel Roubini has conviction in his many years of negative opinion of ‘shitcoin’ as he calls it and his analysis are valid, I respect that. This writer comes out of the blues this week and offer
    his lame views after the cryptos are seeing downward pressures. His opportunistic ways, I despise. Cryptos are speculative assets but who is to say that they won’t last. Try telling it to Ark’s Cathie Wood and Elon Musk and the many retail investors who had benefitted. There are big forces working with and against them. But I will buy them again when they are down to a good value

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  • xoxo:

    Just pause and think.

    How can an irrationally over-volatile medium such as Bitcoin be a METHOD /STANDARD OF EXCHANGE?

    Today,i FILL AN ORDER FOR X UNITS OF COMPUTERS ,say TRANSACTED in BITCOINS pricrd at U$ Y and seemingly make a profit.

    Before i could deliver,the VALUE OF BITCOIN DROP TO 50 PCT OF U$Y(ORIGINAL PRICE).
    Straight away,the PROFIT TURN TO A BIG LO$$ BECAUSE OF EXCHANGE VALUATION?

    BITCOIN IS FAR FROM BEING A GOOD MEDIUM FIR THE REAL ECONOMY IN THE CURRENT FORM.
    TO me,it is overhyped!

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  • fx fan:

    @xoxo
    I read your comments here and elsewhere.
    I think you make sense.
    You mentioned on another forum that Bitcoin going south to about USD 20-15 when it was trading at about USD 41.
    I kind of see it going to USD25-20.

    Just saw Bitcoin dropped to USD 32.

    Thanks for giving your inputs.

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  • xoxo:

    @fx fan
    Thanks for response.
    I dont speculate in fx.
    My views are just based on my thoughts.
    Thinking still more towards USD 20 or high teens where i see more stability.

    Just my 2 cents worth.
    Cheerio.

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  • long long BTC:

    See BTC at $100K!
    Buy,buy,buy.
    No stopping this rocket to the moon.
    xoxo,better buy and get rich quick.

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  • xoxo:

    @long long BTC

    You may be right.
    I was just giving my humble views basically on BITCOIN as a replacement for current world’s *reserve currencies* in its current form.

    Btw,i am not a fx speculator,just a bystander.
    I dont have the resources to participate in this high risk,high return instruments.

    Good luck.

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