[wpietri]

Your valuation number for Bitcoin is driven by a speculative bubble, so it's not a fair comparison. And, "electronic cash" should have a lot of small transactions. That Bitcoin is mainly large transactions is a sign it's a bad cash replacement.

I agree that Bitcoin won't be counted as a failure yet, but I think that's part of the problem. As a hypothesis, Bitcoin apparently isn't falsifiable. Consider the Fred Wilson article linked above, where a Bitcoin advocate admitted that it wasn't a good payment system. But he immediately declares it a store of value. Now that we've had it crash by 80%, it's pretty clear that it's bad for that too. If there isn't a new consensus answer to the question, "what is Bitcoin good for," then its advocates just shift to the possible shining future based on hope and potential. And note how its distributed, peer-to-peer promise has quietly drained away.

Bitcoin can apparently never fail. And I think that's part of what guarantees its failure. Nobody expects an early product to be perfect. But good products evolve and expand to better serve users. As it became clear Bitcoin was not very good for its stated purpose, it could have changed and grown. But speculation was too profitable, so it got stuck in a very deep rut. If some blockchain currency becomes actually useful, I suspect it would be one of the hundreds of competitors. But given that none of them seem to be delivering real-world economic value either, I'm not optimistic.