By CCN.com: Kevin Dowd is a Professor of Finance and Economics in the Business School at Durham University, Northeast England, and the co-author of the 2015 paper “Bitcoin Will Bite the Dust,” along with market analyst and author, Martin Hutchinson, for the libertarian Cato Institute in Washington DC.

CoinDesk published an op-ed by Dowd Monday, with the title, “Bitcoin Will Still Bite The Dust,” in which the libertarian finance and economics professor avers that Bitcoin is doomed to failure.

Well what he says exactly is that Bitcoin will “bite the dust,” and what he means by that is:

Bitcoin can “not survive in the long run,” and “I still think that the long-run equilibrium price of bitcoin is zero. It just hasn’t bitten the dust yet.”

And technically he might be right, the same way John Maynard Keynes was right when he said:

“In the long run we are all dead.”

-John Maynard Keynes, Dead British Economist

View photos John Maynard Keynes. Image from Wikipedia More

But before we take a look at the two reasons Professor Dowd gives for why Bitcoin will “bite the dust,” here’s an excerpt about him from Wikipedia to give you an idea where he’s coming from:

“Dowd’s main subject of research is private money and free banking—monetary and financial systems that operate without any government intervention and in the absence of any central bank. A related focus of his work is on central banking and other forms of state intervention into economies, most particularly, on deposit insurance, the lender of last resort and bank capital adequacy regulation. He has repeatedly called for the abolition of central banks and an end to state intervention in the financial system.”

So here is an economist who would want Bitcoin to succeed, but doesn’t think it will. That’s interesting. It makes me think he must have a pretty good argument that Bitcoin will fail.

Again, “in the long run,” whatever that’s supposed to mean.

Does Dowd have any claim more specific than Bitcoin will bite the dust “in the long run?”

If thousands of years from now when humanity is a space-faring, interstellar civilization in the year 40,750, if they’re not still using the very blockchain which began with the first Genesis block mined by Satoshi Nakamoto in 2009, then the ghost of Kevin Dowd can gloat his prediction was true. What use is a prediction like this? If he’s so certain as to Bitcoin’s demise, will Professor Dowd be so bold as to make a forecast of roughly when Bitcoin will bite the dust?

View photos Prof. Kevin Dowd lecturing. Image from Wikipedia. More

The Two Reasons Why Prof. Kevin Dowd Says Bitcoin “Will Bite The Dust”

FIRST he claims Bitcoin is ‘a natural monopoly’:

‘To work as intended, the bitcoin system requires atomistic competition on the part of the miners who validate transactions blocks in their search for newly minted bitcoins. However, the mining industry is characterized by large economies of scale. Indeed, these economies of scale are so large that the industry is a natural monopoly. The problem is that atomistic competition and a natural monopoly are inconsistent: the built-in centralization tendencies of the natural monopoly mean that mining firms will become bigger and bigger – and eventually produce an actual monopoly unless the system collapses before then.’

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