Is Bitcoin a bubble that will burst?

There are many people that think Bitcoin is a bubble and some have gone as far to call it a ponzi scheme. Mark Cuban got a real discussion going which his comments seem to have dropped the price of bitcoin.

To some extent I have to give Mark Cuban some credit where many people believe that by moving money into Bitcoin, it's all about pure profit as long as the price of BTC keeps going up. The problem lies in the belief that by doing this, everyone is simply earning more money than by not doing anything at all or just keeping your money as fiat currency, that is backed by the government. The thing is governments can do a lot of bad things to money and there are too many examples of governments doing damage to a currency.

We can compare these Bitcoin bubbles to some housing bubbles that have seem to be cyclical where the value rises up and then suffers some type of crash. The reality is that Bitcoin can't just keep going up forever without some winners and losers and up until now, nobody is sure of who the winners and losers might be.

Could bots be extracting too much value out of the system?

One possible problem that could exist within Bitcoin are bots that are programmed to spot patterns to profit on trading. These BTC trading bots are nothing new and bots have existed for a long time in currency exchange (forex) and in the stock market. The problem here is that if these bots do get good at learning and adapting to make better trades, they are extracting more value out of the system.

What happens when the next exchange crashes?

Can an exchange really handle everyone withdrawing their money when BTC hits the next all time high? At some point these exchanges need to have real money to pay out users assuming that BTC hasn't caught on as a means of buying and selling goods and services. Everyone can simply point to the 2014 Mt. Gox exchange crash that wiped out $350 million in value and was the main culprit behind the crash of Bitcoin. That only took about 2 years to recover in value and it's the reason why some users don't like having all their coins stored in an exchange and why many go to the extremes of cold storage.

Can Ethereum overtake Bitcoin?

These trends and discussions happen almost too fast and in the past few days, many major coin sites are pointing towards a trend in Ethereum overtaking Bitcoin. It's a point where many people are discussing selling BTC and buying ETH.

This article from Venturebeat.com explains why ETH already has an edge on BTC.

https://venturebeat.com/2017/06/11/why-ethereum-is-outpacing-bitcoin/

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