Why is Bitcoin still soaring despite all it's problems?.. Welcome to the "petro-Bitcoin" model

As I write this article Bitcoin is well over $2,000 per coin, and the thought that keeps going through my head is why? Sure there are a lot of great reasons why a lot of new cryptocurrencies with great business cases are taking off, but this collective obsession with what is currently a horribly performing cryptocurrency that simply can't scale is somehow still astounding to me. (See my previous article and follow-on comments here for more insight.)

Despite any breadth of global Bitcoin acceptance, Bitcoin transaction performance is a total disaster and getting worse all the time. On top of this, all the efforts to resolve the issue are locked up in constant opposition. After pondering this issue for a bit, it struck me that there are a few very simple reasons for Bitcoin's ongoing rise that have nothing to do with its legitimate value as a cryptocurrency and as a value transaction technology. It's value is simply due to the way the cryptocurrency market is currently structured.

1. The petro-Bitcoin must be used to buy and sell many cryptocurrencies
This feels a hell of a lot like the petro-dollar system where you are forced to transact every major commodity and financial product purchase in dollars simply because everything is priced in them, but never because you wanted to deal with the crappy dollars to begin with. Welcome to the world of the petro-Bitcoin where you have to use Bitcoin for so many transactions that the demand for Bitcoin will always be there. Until people start pricing new cryptocurrency and ICOs in ETH, XRP, and other cryptocurrencies that are designed to handle much greater payment transaction volumes, the demand for Bitcoin will only increase and the performance problems will only worsen. This is a blind alley that all the cryptocurrencies are being marched into due to their obsession with pricing everything in a currency that can't perform. Can you say "permanent bottleneck?"

Frankly, I f'n hate having to transact in Bitcoin. This shitty period where you are waiting for your all the confirmations to come through is agonizing, especially knowing that there are so many better payment options out there. Sure, sometimes you can bribe the proverbial "boatmen" to get you across faster, but depending on what exchange you are on, this option isn't always available. The cryptocurrency community needs to realize how big of a problem this is in a hurry or face a massive performance kill in transacting all other Bitcoin-priced cryptocurrencies. A solution is needed to this problem and the first thing that is needed is the awareness across the broader cryptocurrency community of the seriousness of the problem.

2. People are truly creatures of habit and religious adherence.. also in cryptocurrencies
As I've stated in my previous article, cryptocurrencies become like religions to people, and if Bitcoin was a religion it would be the Catholic Church. Pope Bitcoin is in charge and the masses follow without question. Speaking out against Bitcoin is like heresy to a lot of people. They are so emotionally-tied up in it that they can't have an objective discussion about how ridiculous it is becoming in terms of its technology and performance. They therefore pile into it like it's the only future available despite any logic to the contrary.

Loads of newbies are entering the cryptocurrency space as well and they wouldn't know a Bitcoin from a Dogecoin. They've just been told by people smarter than them (Bitcoin Bishops?) that they should invest in cryptocurrencies and that Bitcoin is the best! This is pure ignorance and just perpetuates the overall problem. People are pouring money into something that they have never really used and don't really understand. This is not only unsustainable, it greatly exacerbates the "Bitcoin overload" problem stated above. Considering that 99.999% of the masses haven't even gotten near cryptocurrencies yet, you can imagine what will happen if only 10% of them come in and this uninformed Bitcoin promotion and resulting bottleneck problem is still in place.

3. Fear and greed is unfortunately at the core of human nature (and Bitcoin use)
Bitcoin's performance is truly based upon "fear and greed" response and probably more than any other cryptocurrency. Bitcoin has been called "cryptocurrency gold" by some. This is simply because in the cryptocurrency market when panic sets in, all the "nervous Nelly" types run back to big Bitcoin to save them from the storm. If you ever watch a day when all the other cryptocurrencies are going down, the clear response is for Bitcoin to go up. This brings on the greed side of this equation as well.

The greed response in Bitcoin is that everybody wants to pile into the most popular coin to get their share before everybody else does. What they don't realize is that game is rigged through the "petro-Bitcoin" mechanism described above. The demand is artificially based upon the structure of the current cryptocurrency system. Many people are however more than happy to keep taking advantage of this and of others in the process. This is not what is best for the future of cryptocurrencies overall, but it's instead a greed response that will eventually cause much bigger problems than are already manifesting. The only viable solution is for the broader cryptocurrency market to move away as quickly as possible from this "petro-Bitcoin"model and start sharing the small coin and ICO valuation base with cryptocurrencies that are better up to the task of supporting the massive new demand that is coming.

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