Here’s What Bitcoin’s Smartest Skeptics Are Telling Investors

Bitcoin continues one of the most dramatic price runups of any asset in living memory, posting prices above $11,800 this morning after starting the year below $1,000 per digital token. In its early years, skeptics with little knowledge of blockchain technology were quick to dismiss Bitcoin as a fleeting trend. But as knowledge spreads and prices chase new highs, the skeptics have become more nuanced – and even if you love Bitcoin, they’re often worth listening to.

Here are a few of the most notable bear sentiments being aired as Bitcoin’s rip-roaring rampage continues.

Blockchain without Bitcoin?

At last week’s Consensus: Invest conference in Manhattan, some of the greatest minds in asset management came together to talk cryptocurrency. On a “Bulls and Bears” panel, Raoul Pal of the Real Vision financial news network repeated a favorite saw of today’s more informed bears – that while blockchain database security is a revolutionary technology, those blockchains will ultimately be privately managed by enterprises. That would eventually drive the value of public blockchains like Bitcoin to zero.

But the idea of a private blockchain at least partly misunderstands the core security premise of the technology. Cryptocurrency payouts attract a decentralized swarm of hosts who ensure the honesty of a shared ledger, without necessarily having a stake in its contents. Andreas Antonopoulos, long one of the smartest commentators in the space, has dismissed private blockchains as a fundamentally inefficient replacement for an old-fashioned database. Once real-world blockchain applications are up and running, most will likely be hosted on one of the trusted public blockchains, such as Bitcoin or Ethereum.

What the Fork

Not exactly a bear, Mike Novogratz has said that cryptocurrency is in a bubble, even while also starting a large fund specifically to invest in it. Novogratz has made a point that is far too rare in this realm – that not all cryptocurrencies are created equal, and not all of them will win. As an example, Novogratz has said he believes Litecoin, the 6th largest cryptocurrency, “doesn’t add enough new stuff to replace Bitcoin.” […]

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