I'm not going to talk about the price of Bitcoin – suffice it to say that a spontaneously organized boiler room can exist in equilibrium for some time, and in a market with so much fraud and theft, I don't think price is the only factor preventing a preference cascade. In other words: unless Bitcoin is really, definitely useful and cheap to use, it could collapse at any second, even during a long bull run, and normal market theories about prices and price stability do not apply.

In fact, it's probably worth reading a slightly longer exploration of why you should be terrified of something which is viewed as a digital appreciating asset. This is "Don't Get Scammed" 101, but I guess we're all no longer on the same page about that.

More interesting than all that, though, is how the mechanism interacts with the wider world. It consumes an unreal amount of energy and money (more than it takes to mine the same dollar value of actual gold or platinum from underground). Previously touted as "free", fees for making Bitcoin payments are now routinely exorbitant, and more than ACH fees, despite taking hours longer to process, instead of being essentially instant. And while many still claim it is decentralized and "trust-less", the entire network is defined by a cabal of about a dozen people who regularly chat in IRC and occasionally take down the entire system because they want to. It requires more trust than standard banking, which requires the agreement of many more people and has regulators whose interests are different than bankers, etc.

It turns out the modern banking world is pretty sophisticated, does its job pretty well, and supplies a great deal of services people want – like chargebacks, which Bitcoin does not allow, which reverse fraudulent or unwanted transactions.

Of course, the transaction fees – the primary element making Bitcoin worse than modern banking even for people so patient they can wait overnight at the gas station to pay for a Snickers – could be lower. Very easily. The cabal would just need to get together and decide to increase the size of the transaction blocks, and at no meaningful additional cost to them, supply of space on the blockchain would expand.

Except, there's an opportunity cost. The Cabal is of current majority miners, and they'd lose those transaction fees. So, of course, it didn't happen. They want to control a currency people use, but if it doesn't bring them power to extract outrageous rent from them, it seems they don't really care. There was talk of Bitcoin splitting, but in practice, that essentially has not happened. The broken system won. Not for technical reasons (although the technical reasons were why it was broken to begin with), but for human ones.

Without normal people using the system for licit purposes, it was unlikely to have a sustainable future. It's been relegated to the pump-and-dump online hype machine and anyone who wanted programmable cash would have to wait.

Stellar exists, now, though, and appears to be a meaningfully programmable version of modern banking that can deliver on Bitcoin's more mundane, non-scam, promise. You don't need to use the default currency for anything (that I am aware of – excepting extremely nominal fees that aren't paid to anyone), so it doesn't really work as a scam. But of course, that means it doesn't get the same publicity.