Hearn: The resolution of the Bitcoin experiment

Supposing 1. that an unconventional currency is already suitable for handling transactions concerning new kinds of organised crime, the beneficiaries of DDOS and Cryptowall style network and data ransom attacks, and the organisation of more efficient markets for illegal weapons etc. Supposing 2. that some or all of the main beneficiaries of these markets also effectively control this currency. It follows that the group currently in control have little incentive to relinquish their control over this currency to a larger community, so, if they have this capacity and criminal intention, they will DDOS any perceived threat to their control out of existence.

If the main reason new users have to buy into the currency is to pay such criminal demands, regulation of the demands made upon new victims to balance cashing out by the organisers using the same exchanges will stabilise the exchange value of the currency better than when the number of new users buying in is a speculative bubble phenomenon inversely driving increases or decreases in those attempting to cash out, as it was in the earlier days of this currency, when demand for it was driven by misplaced enthusiasm and conventional media reportage. Also if much of what is being sold for Bitcoins is calling off a large DDOS attack, or cryptographic keys which enable a Cryptowall victim to restore their data, there is little worry for the criminal beneficiaries if transactions take a day or so to clear - the victims are obliged to pay regardless or lose their data or network availability.

So perhaps the question of whether Bitcoin has failed depends upon your interpretation of what it means for Bitcoin to succeed. If it puts money into the hands of a bunch of criminals who control it, the latter might consider it entirely successful. If the criminals who control the exchange stability it are a different group than those who mine the currency, paying transaction fees to the miners is a relatively small overhead upon a criminal operation concerning which Visa transactions are not in competition.