<center>![Bitcoin pedestal.jpg](https://steemitimages.com/DQmTX9TqzXHSUFHzjAe9Gfsdy5M6eaC85srcVkXZdRmDFeQ/Bitcoin%20pedestal.jpg)</center>
<h1>The King is Dying</h1>
Bitcoin has gone far in the last 9 years, rising from pennies to over $19,000 at its recent peak. I am sure it was as much of a surprise to you as it was to me. All-in-all, 2017 turned out to be the year of the <a href="https://steemit.com/steemit/@getonthetrain/the-digital-gold-rush-is-now-and-steemit-is-positioned-to-thrive-like-it-s-1849">cryptocurrency gold rush. </a>

Similar to the gold rushes of old, entrepreneurs raced to start up or expand services to profit from the fast-rising demand. Instead of picks and shovels, it was things such as apps and exchanges. 

2017 was quite a rocket ride. But I don't think the Bitcoin party has much longer to last. 

Allow me to explain.

<h2>What Is Bitcoin Good For?</h2>

Is it a currency (that almost nobody uses as such) or a commodity?

Certainly Bitcoin fits a few key characteristics of a currency - it is uniform, divisible, portable. Where it fails is as an actual way to make payments in daily life. 

Even the 2018 North American Bitcoin conference in Miami <a href="http://www.businessinsider.com/bitcoin-conference-stops-accepting-bitcoin-network-fees-congestion-2018-1">stopped accepting ticket payments in Bitcoin </a>due to the long processing time and fees! 

In comparison, I had absolutely no problems paying for my Steemfest ticket in SBD. It was quick and had zero fees. 

Bitcoin can only handle a maximum of 7 transactions per second (TPS), while STEEM can perform 10,000 and costs nothing. Even Visa's old legacy network can handle 56,000 TPS. So you can see why there is a long backlog.

Attempts, like segwit, have been tried and failed. The new attempt is the Lightning network is in the works. They want to perform a bunch of transactions off chain, bundle them up, and put them back on the Bitcoin chain as one transation. Many people don't like that as it lacks transparency. 

I think it is like giving someone with a broken leg a band-aid and calling it fixed. Especially when the proper tools to heal that broken leg are right next to you - other cryptocurrencies. 

Bitcoin is obsolete and won't be widely adopted. It has risen so rapidly on hype and FOMO only.

<center>![bitcoin investment companies.jpg](https://steemitimages.com/DQmVTMBjVTumRuNoFvr4PsUe1pe7VKNFcrHYeFdfWdeuZHc/bitcoin%20investment%20companies.jpg)</center>

<h3>If not a currency, could it be a held similar to gold?</h3>

This is much more likely. If people just hold it for long periods of time as a sort of digital gold, then the slow transaction time and large fees will not matter so much. 

This should also create a more steady price range for Bitcoin. But what could that price range be?

Gold usually sticks close to the production cost. If the profit margin gets too high, more gold miners are started to capitalize on that opportunity. Bitcoin would be no different. 

Marketwatch did a <a href="https://www.marketwatch.com/story/in-one-chart-heres-how-much-it-costs-to-mine-bitcoin-in-your-state-2017-12-15">study</a> and found that the cheapest state to mine Bitcoin in is in Louisiana at a cost of $3,224. 

Way back in 2015, cloud miner Genesis stated that it cost them $60 to mine Bitcoin. But a halving of the reward and increased competition has greatly increased the difficulty since then. It probably costs them at least 10X that now, plus other overhead. 

Canada has <a href="https://www.reuters.com/article/us-canada-bitcoin-china/chinese-bitcoin-miners-eye-sites-in-energy-rich-canada-idUSKBN1F10BU">Chinese investors</a> looking for new places to move their mining operation as the Chinese government is cutting back on their operations. The electricity cost is about half of what it costs in Lousiana. 

So the price to produce one Bitcoin should be around $800-$1,800 all totaled. As a store of value, Bitcoin should trade just above those levels. 

Right now the entire Bitcoin network uses 42TWh per year. That is enough to power over 2.5 million homes for a year. That is more energy than countries like Ireland, New Zealand, or Denmark use annually. The CO2 cost is comparable to <a href="https://www.theguardian.com/technology/2018/jan/17/bitcoin-electricity-usage-huge-climate-cryptocurrency ">1 million transatlantic flights. </a>

This is an outrageous waste of resources considering there are much better options to use.


<center>![bitcoin-deflation.jpg](https://steemitimages.com/DQmZtK9eanRNMQfKAc6wyjcivX519txkBXAhvBYA8pUFxHG/bitcoin-deflation.jpg)</center>
<h2>The Coming Crypocalypse</h2>

If Bitcoin continues to rise it will draw more and more mining rigs to the network. The spiral continues upward until Bitcoin is $1 million dollars and is consuming the entire world's energy. 

Or people wise up. They see that there are better options to do the job. Bitcoin price slowly creeps downward with occasional spikes up, then it suddenly drops and creates a mass panic. People run to exit from it (only 7 at a time though) and it drops to around or just below $1,000 before it slightly bounces. 

This crash brings down the entire cryptocurrency market and any related stocks. 

As unprofitable miners shut down operations, Bitcoin stabilizes into a trading range of $1-2K. 

<h2>Rise of Utility Coins</h2>

This crash is actually good for the long-term health of cryptocurrencies.

The "get rich quick" scam coins and tokens with questionable utility will be negated. I mean things are so crazy right now even the Bitconnect token is still being traded and has a market cap of over $140 million dollars! The ponzi scheme shut down. The tokens are worthless, yet their value is equivalent to 9,000 thousand acres of useful land priced at $15,000 per acre. That is just crazy!

It all needs to come back down to reality so the worthwhile cryptos can stand out. Useful ones like ETH, NEO, EOS, and STEEM. Monero can take over as the coin of choice for anonymous transactions. IOTA could carve out a section. 

<h2>Conclusion</h2>

Bitcoin has been dropping and is heading further downward. It has failed to scale to the demands placed upon it. I do think that people will continue to trade it, ever hopeful for a return to the highs.

The cryptocurrency market will be brought down by the crash, but it is the opportunity for the best coins to rise from the ashes. There will be a bottom, it is when all hope seems lost. When people capitulate and sell everything they have left. 

When that time comes, then will be the time to buy the cryptos with the best utility. 

Because no matter how exciting an investment seems, you need to buy at the right price. There are major companies that have still not returned to the highs of the dot-com crash, 18 years later!

People say that this time is different. 

I say that it is never different. 

<center>![BiTC1.jpg](https://steemitimages.com/DQmUxqmtuzJ3EZp7vFoAWiFrqMNq6H3DykTp6fAawXwRmpC/BTC1.jpg)</center><center>Thanks to @theroadtoriches for the Nasdaq chart</center>