This is a silly argument. The vast majority of people who invested big in new, unproven technologies through the market lost big. You never hear about the losers though. The data looking backward suffers from survivorship bias as well as the belief that the winners are winners because they are smart and not just lucky.
You completely missed the point. My argument wasn't that there weren't losers as well. My point was that even though the markets change drastically over the long term doesn't mean that original investments into those markets were failures. I was arguing against the point that even though many of the car manufacturers of yesterday are gone doesn't mean that investments prior to their departures were poor investments. Markets change for many reasons. Some times companies buyout other companies, some die a slow death, some make it big, yada yada. Essentially the argument made by Kalergie a few posts back was that because we don't know who the winners and losers are, we should refrain from putting any money into groundbreaking technologies. That is what I was referring to as silly and I stand by that statement.
Since it is still in the future, it is correct to state that no one knows whether bitcoin will be overtaken or make a good investment. To paraphrase Ben Graham, "The future is a closed book." It is not even reasonably foreseeable that bitcoin will remain the primary cryptocurrency. There are serious flaws (not subject to court jurisdiction, hard forking, exponential energy requirements) with the bitcoin technology that inhibit it being applied as a true currency. Further, since it is decentralized, there is really no established mechanism or governing body for correcting these deficiencies within the bitcoin regime itself. The only alternative is to start a new cryptocurrency that incorporates the desired features that bitcoin lacks. This cuts agains the foreseeability of wide adoption of bitcoin, per se, or any other decentralized crytpocurreny to date.
Exponential energy requirements? Can you explain how it is exponential? On a transaction by transaction basis going forward, it will actually accommodate more transactions per kilowatt of energy used as the technology progresses. Plus, with off-chain transaction capability coming in the future, it will be possible to process millions of transactions using very little energy. Yes, bitcoin is a huge energy hog today, but I don't see it as a long term problem that will inhibit its growth its nor do I see it as a serious like you say it is.
How is hard forking a serious flaw? Hard forking is not a flaw and over time will help the currency grow and be flexible to the demands of the market. Bitcoin is not supposed to be some rigid static code base that never changes. In fact, it is easily argued that any software that is static and rigid will actually be hindered by that fact. Hard forks allow the code base to change according to how the market dictates and if the market dictates that a certain code change be required, then a hard fork will allow the market to decide that. When this happens it is a good thing for the eco-system and the markets in the long term. Don't let media hype with fear, uncertainty, and doubt cloud that fact.
You state that there is safe growth potential with bitcoin. Safety is most certainly not guaranteed by bitcoin or any other cryptocurrency. Nothing about bitcoin exhibits, nor about your argument establishes, a safety thesis of bitcoin or any other cryptocurrency. Safety in the short term is achieved by obtaining assets of stable value in a deep market so that one can be sure that they can be exchanged in the near future, either directly or indirectly, for other desired goods and services should the need arise. And safety over the intermediate and long term derives from buying assets at a fair price with respect to their intrinsic value so that the investment return keeps up with inflation, taxes, and any fees, thereby providing a reasonable likelihood of having the same or more purchasing power at the end of the holding period. Bitcoin and other crypto currencies are insanely volatile, so they do not provide a reasonable stable short term value, and therefore are not safe in the short term. And it is impossible to determine what the intrinsic value of a bitcoin, or any other cryptocurrency, is (they have no book value, they generate no income) and whether one is buying at a fair price with respect to that, and therefore they cannot be said to be a safe long term investment either.
Safety in the short-term is achieved by looking at the trends that are occurring and then realizing that because of those trends, there will undoubtedly be new money flowing into bitcoin over the next several years. Futures and options will allow new investment vehicles for bitcoin. Countries are making strides to adopt and/or legalize bitcoin as legal tender for transactions. Many other countries as also investing a lot of money into mining operations themselves which shows that many governments are looking to secure
future bitcoins in their reserves. Contrary to the claim that its mostly used for illicit activity, law enforcement agencies have gone on the record to say that they're actually able to better trace monetary activity in the bitcoin realm than with traditional currencies and that they're seeing a decline in illicit activity in the eco-system as a whole. So yes, when I say it is a relatively safe investment, I say this because I can take an objective look at what is happening across the globe as a whole with regard to the bitcoin market and what trends are occurring. In order for this trend to reverse, we'll not only need to see a complete reversal in these trends, but it would need to happen on a global scale involving numerous governments and businesses across the world. Even when the price isn't moving, you have to realize millions of dollars are flowing into bitcoin at those times due to its inflationary nature currently.
The old "intrinsic value" argument gets tiring. A lot of things that humans place value on have no "intrinsic value", but that doesn't really matter at all. All that matters is whether humans actually value it, not whether or not they value it because of any intrinsic property (whatever that truly means). It can easily be argued that humans value bitcoin because of the intrinsic value that mathematics provide. Bitcoin is a culmination of hundreds of years of mathematical principals that have finally allowed us to create a system that allows humans to take
trust out of the equation when trading between each other. These mathematical principals have become the foundation that humans can universally place their trust in so that us human beings don't need to rely upon our naturally untrustworthy nature. To me, that's about as great of an intrinsic value as you can get and I'm betting my money that the world will see it that way in 10-20 years too.