Cryptocurrency implies security. The “crypto” in cryptocurrency means cryptography. Bitcoin is one form of cryptocurrency. There’s other cryptocurrencies like litecoin, dogecoin, and potcoin. I’d personally like to see alfcoin. People keep asking for my opinion of Bitcoin. I’m pro-cryptocurrency. Bitcoin not so much.
Bitcoin is arguably not secure, which is the fundamental basis of a cryptocurrency. Mt. Gox, the biggest Bitcoin exchange, had half a billion dollars worth stolen completely undetected. Another bank went bankrupt after it lost the entire $600k inventory in its “hot wallet”. Bitcoin is also arguably not currency. Bitcoin “deposits” are not backed by FDIC or anything else. In contrast, “real-world currency” is fiat money backed by federal governments.
I agree with its proponents that cryptocurrency makes sense in both economics and privacy. There’s no reason in this electronic age that several percent of every transaction should automatically go to financial services companies like credit card processors. However, dealing with potential fraud will always be an issue. I also agree banks and third-parties don’t need to know the date, time, location, and details of every purchase. Cryptocurrency eliminates intermediaries that add service costs and reduce privacy.
I wrote exactly two cryptocurrency-related posts last year: Coinbase Is A YC-Funded Bitcoin Wallet and Bitcoin Is The New Gold Rush. My mistake in that second post was focusing on Bitcoin specifically and not cryptocurrency generally. It seemed obvious to me that some hackers would make it their business to steal a large amount of Bitcoins. For that reason, I intentially chose to wait until after a high-profile hack like Mt. Gox before writing again about cryptocurrency.
Bitcoin may be able to address its flaws. Technological progress, though, tends to start over with fundamentally better solutions. There’s undoubtedly a superior cryptocurrency to Bitcoin that will achieve long-term mainstream success. However, to reach that point, the public needs to have more discussion about cryptocurrency generally and less discussion about Bitcoin specifically.