Bitcoin was born in Jan. 2009 and there was no other cryptocurrency until 4-5 years later. seeing the volatile movements of bitcoin, a lot of other digital tokens or coins entered the space. As of today, there are more than 13,000 cryptocurrencies and new ones are entering the space daily.
People are piling up huge amounts of money in the new tokens hoping that it will become “the next bitcoin.” it indicates one thing that the money we use today (dollars) is not doing its job. What’s the job? Storing value is one of the important functions of money. dollars or any fiat currency for that matter, don’t store value which forces people to invest their money in something which can provide them a good return on their investment.
How do you find the best in this crowded space?
TL;DR Bitcoin is the best.
When I first heard about cryptocurrencies, I used to think that bitcoin and all other coins are the same. I thought that some other coin(s) will dethrone bitcoin. But I was wrong.
Here’s how:
For the same reasons we had one analog gold, we’ll have one digital gold. Gold remained the most sought-after metal for 5,000 years because it fulfilled the properties of money better than any other metal. no other metal was even close to it for thousands of years. Bitcoin is the same beast. It fulfills the properties of money better than all other cryptocurrencies and gold. If you want to learn how bitcoin better fulfills the properties of money, you can read my article “the solution” that I wrote a few weeks ago.
Bitcoin is both digital and decentralized. Nothing else could achieve this feature until bitcoin. Gold was decentralized but not digital. All other cryptos are digital but not decentralized.
Bitcoin’s digital nature gives it convenience properties of money (divisibility and portability). You can move it at the speed of light and it is easily divisible. Its decentralization gives it value properties of money ( scarcity and durability). for the past 13 years, it has successfully remained the scarcest asset on earth due to its decentralization and immutability ( no one can change its rules forcefully).
All other CRYPTOS only have the convenience properties of money. They don’t care about value properties. If a coin doesn’t have value PROPERTIES of money, it’s not scarce nor it’s immutable.
Humans tend to own scarce things. If a company advertises their products on t.v. as scarce, then there’s a good chance that people will demand it. We once owned seashells, salt, etc. as moneys because they were scarce. Once they lost their scarcity, our tendency to own them disappeared.
For a good to become money or the most desirable thing, it has to earn the trust of the public that it will remain scarce. At its core, money requires trust. if people trust the money to hold its value, it will succeed and vice versa.
How does trust come?
Who would you trust: your friend who’s been with you for the past 10 years or the one whom you met yesterday? Obviously, you will trust the former one.
The same concept applies to money. people will trust the one which has been around for a lot of time. Survival matters more than anything else. bitcoin prioritizes decentralization which keeps it scarce and alive irrespective of attacks. All other tokens are centralized. they can increase the supply of their coins at any time. None of them can survive the test of time. Only bitcoin remained from the top 10 list of cryptos of 2014. all others died.
Altcoins try to earn THE trust of the public by marketing, making fake promises, hype, etc.
Bitcoin focuses on one thing to gain trust: time.
The longer it survives, the more people will trust it. Only bitcoin stands the chance of surviving the test of time because it is the only one that is truly decentralized and immutable.
FINAL THOUGHT…
Writing every day feels good.