[Editor’s note: “Where Will Bitcoin Be in Another 20 to 30 Years?” was previously published in May 2018. It has since been updated to include the most relevant information available.]

Bitcoin. Just say the word to 10 different people, and you’ll get 10 different responses ranging from elation to derision. Though nobody denies it exists, the world is relatively well split on the merits of its existence. Half think it is the future, while the other thinks it has no future.

To its credit, so far, bitcoin and its peers like Ethereum, Litecoin and a whole slew of other cryptocurrencies you haven’t heard of have survived. They’ve dished out painful degrees of volatility, but they’ve survived.

The long haul can and likely will be a different story, however. Within the next two to three decades, an ugly reality will come home to roost.

What Is Money?

That’s the crux of the debate anyway. Will blockchain-based bitcoin or one of its peers supplant fiat (government-managed) currency once the masses decide a truly free-market system is superior? Or, will leaving the world’s monetary system up to a panic-susceptible crowd open the door to far too much volatility to make bitcoin a consistently useful means of storing and conveying value?

The experts, and amateurs, are of mixed opinions.

Any meaningful discussion of the matter — and this is hardly the first time the debate’s been laid out — can and should begin with the definition of money.

A currency must first have (at least) measurable degrees of durability, scarcity, divisibility, cognizability and usability.

At first glance bitcoin appears to bring all five core components of “money” to the table. Take a closer look though, and its fulfillment of a couple of those criteria become a little wobbly. Chief among those shortcomings is scarcity, though not for the reason one might think.

Unlimited Supply of Bitcoin

Yes, there is a finite number of bitcoins that will ever be mined. Of the 21 million bitcoins that will ever be mined, about 80% of them have been found and are now in circulation. The ones that have yet to be discovered will be, sooner or later, and that’s it. The limited number of them means only supply and demand will dictate its future value.

There’s a looming problem with the idea though. That is, there’s no cap on the number of other cryptocurrencies that can be created.

Not so with fiat currencies. Though a government has the right to print more money, it generally practices restraint in doing so, since rampant money-printing devalues that currency and can spur inflation. And, anyone who wants to own another country’s currency must trade existing currency. Globally, for better or worse, the amount of money that can be held at any given time is finite, securing at least some semblance of value.

Unregulated cryptocurrencies have no creation ceiling, and their creators have every reason to make them as long as buyers are willing to exchange — and this is telling in itself — fiat currency for them. For bitcoin to “work” as a true global currency, there can be no other choices of cryptocurrency.

Usability of Bitcoin

Yes, some businesses now accept bitcoin as a form of payment for products purchased or services rendered. Take a closer look though. Despite bitcoin’s nine-year existence, most organizations still want to be paid in fiat currency.

There’s a reason. That reason is (touching on elements of the other characteristics of money), cryptocurrencies are far too volatile to feasibly use as a primary means of doing business.

Contrary to popular belief, this won’t change if and when the supply/demand dynamic grows for bitcoin. If anything, volatility will worsen. How’s that? While most governments can and sometimes do it poorly, the value of fiat currency is “throttled” by a central bank with an agenda of stability in mind. The only thing determining the value of bitcoin are buyers and sellers.

In some regards that’s as it should be. But, as was noted, a crowd can turn into a mob in the right circumstances, and pull the rug out from underneath a digital currency’s value before they even realize it’s happened.

Said in simpler terms, a handful of organizations will accept bitcoin now. That’s apt to change the minute bitcoin suffers a nasty crash that nobody has a willingness to fend off.

The Bottom Line on Bitcoin

So why, pray tell, has bitcoin survived as long as it has if it’s flawed as described above?

The simple — even if insulting — answer is not enough people want to believe the premise is flawed. As long as fans and followers of the movement support it, there’s a “market” for it.

Just bear in mind that bitcoin, or any digital currency for that matter, has never been truly tested. It’s not been tested in a courtroom that acknowledges it as an alternatives means of compensation of plaintiffs. It’s not been tested in the marketplace when a rival cryptocurrency decides it wants to take a shot at the top spot. It’s not been tested as a means of transacting business outside the purview of government regulators … in particular, the IRS. And it’s not even been tested in a court of meaningful public opinion after a crash.

The U.S. dollar, conversely, has repeatedly survived such tests.

At least one of those tests will materialize within the next 20 to 30 years, exposing the digital currency’s inherent flaws. The bigger it gets, the more likely those damning tests become. That’s when bitcoin starts to become a fading memory of things that didn’t work quite as initially hoped.

Or, in terms even a 6-year-old can understand, if it seems too good be true, it probably isn’t.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.