1. Bitcoin and Why I See Bad Future for It
Jing Li

2. Big Picture 1: Price of Bitcoin (Check Trade Volume by Yourself)

3. Big Picture 2: Google Trend (Revealed Preference)

4. Big Picture 3: Is It Legal?

5. Eco201: Demand and Supply

6. An Easy Problem Demand side: speculator, risk-lover, criminal…..
Supply side: Ripple, Bitcoin, Ethereum, LiteCoin….
Question: what happens to price if demand curve shifts to left, and supply curve shifts to right?

7. Why Demand Curve Shifts to Left?
Google Trend
Governments hate it---China has cut down the majority of Bitcoin trading; India is reported to take steps to make cryptocurrencies illegal as a payment system; South Korean has banned government employees from crypto holding and trading…….
SEC is planning more regulations; Banks are now moving en masse to prevent customers from buying Bitcoin on credit cards…
Asymmetric Information---People will not buy a used car in fear of getting a lemon. Here, risk-averse persons like me are scared away because Bitcoin (and blockchain) is so hard to understand

8. Why Supply Curve Shifts to Right?
There are a lot of nerds out there…
In theory, everyone (not just central bank) can supply. This is how
Remember, Bitcoin is not the only cryptocurrency---the list of its competitors is growing, fast!
After a trip to San Francisco, some Miami professors want to start mining “MiamiCoin”. Yes, I will leave Miami if the university decides to pay me MiamiCoin. I am serious!!

9. As Currency, Bitcoin has Fundamental Drawbacks
Unit of Account: the value of Bitcoin is too volatile. When people see change in price, they do not know it is due to the goods or Bitcoin.
Store of Value: the is the part of Bitcoin criminals like most. At this point, it is hard to track the Bitcoin transaction. So Bitcoin is ideal for money-laundering or tax evasion. No wonder governments hate it.
Medium of Exchange: this requires people have faith in the currency-- -they know later they can use the currency. Personally, I do not have faith in Bitcoin because of its uncertain future

10. Technical Stuff https://en.wikipedia.org/wiki/Blockchain
My advice is, don’t invest in Bitcoin until you understand Blockchain, the elephant in the room
Another technical note: mining in Blockchain becomes exponentially more expensive with each link in the Blockchain. In that sense, mining Bitcoin is self limiting, and eats a lot computing and electrical energy.

11. History Repeats Itself https://en.wikipedia.org/wiki/Tulip_mania

12. Bubble?
differences-between-cryptocurrencies.html