We wrote our first and only newsletter on cryptocurrencies when the bitcoin price was still under $100. After a 100-fold appreciation, much has changed in the cryptocurrency world. And yet a disturbing amount has remained the same for bitcoin itself. The biggest winners from bitcoin so far are the inspired developers, early investors, exchanges, miners, money-launderers, and thieves. Bitcoin may continue to swell in value and become a universal, global currency, but it is still a dream. The future of viable blockchain applications lies elsewhere. I'm not going to tell you which cryptocurrencies are best to invest in, nor will I tell you when prices will collapse (it's not uncommon for prices to drop 80%-90% from their peak). I can tell you about the psychology driving bitcoin prices into bubble territory. Many rational value investors and financial analysts are proclaiming that there is no value in cryptocurrencies. But they are using the wrong toolkit. Analyzing cryptocurrencies with traditional valuation metrics is impossible. The psychological aspects of valuation contain the key to understanding bitcoin. Bitcoin's $285 billion market cap as of Dec. 12 certainly is a measure of value.
Bitcoin is still a good bet as long as greater fools are buying - MarketWatch
Other problems with bitcoin include: 1. Four mining pools provide half of bitcoin’s capacity, making it more susceptible to attack. 2. There are numerous and often-confusing blockchain forks. Bitcoin Cash is perhaps the most viable, but it also dilutes the brand. 3. Bitcoin transaction speed falls far behind bank transactions, and it cannot be fixed in its main branch. 4. Use of bitcoin in daily transactions is not increasing. Per this article: "The number of bitcoin transactions on a daily basis has been consistent in 2017." 5. By the number of the wallet, owner’s transactions can be tracked, which substantially undermines anonymity.
Bitcoin is still a good bet as long as greater fools are buying - MarketWatch
The lightning network is the highly anticipated second-layer payment network to be deployed on top of Bitcoin. And as an open protocol, it's relatively easy to deploy lightning network support for other cryptocurrencies that are forked from Bitcoin's codebase - like Litecoin. Interestingly, if the lightning network runs on different blockchains, these chains can effectively be linked together. If one or several peers on the network are willing to take one type of coin and forward another, it's possible to send bitcoins on one end of a channel that will end up as the equivalent in litecoin on the other end.
The Lightning Network Now Supports Transactions Across Blockchains - Nasdaq.com
According to a report by CNBC, the Lightning Network would potentially allow for transactions and microtransactions utilizing Bitcoin to take place instantaneously. Aurélien Menant, the founder and CEO of cryptocurrency exchange Gatecoin, described the network as "a game-changing innovation," saying that it "utilizes smart contract technologies to enable instant micropayments using cryptocurrencies such as Bitcoin." Analysts view the lock-in and implementation of the SegWit protocol as an essential step toward the implementation of the Lightning Network, which would constitute a sort of added layer of framework which could be grafted on to the existing Bitcoin network.
What is the Bitcoin "Lightning Network?" | Investopedia
Cryptocurrencies like bitcoin provide a unique service: Financial transactions that don’t require governments to issue currency or banks to process payments. Writing in the Atlantic, Derek Thompson calls bitcoin an “ingenious and potentially transformative technology” that the entire economy could be built on — the currency equivalent of the internet. Some are even speculating that bitcoin could someday make the U.S. dollar obsolete..