Few Understand That Bitcoin Is Money, Not Just Another Technology
The stability of the Bitcoin protocol is a necessity.
Bitcoin is considered by a majority of people to be the greatest technological revolution since the emergence of the Internet. There is no doubt that Blockchain technology, which is inseparable from the success of Bitcoin, is a revolution.
By creating Bitcoin, Satoshi Nakamoto has responded to a problem that many people have struggled with since the advent of the Internet: creating a completely decentralized electronic payment system that does not require a trusted third party to work properly.
Until now, users had been obliged to trust the banking system or third parties system such as PayPal.
Bitcoin combines 3 properties that make it unique
Bitcoin is something unique in the history of mankind because until now, humans have never known something that combines the following 3 properties simultaneously:
- Digital
- Scarce
- Decentralized
Existing in limited quantities on Earth, gold is scarce. The amount of gold remaining to be mined is not known exactly but is assumed to be limited. It can be said that gold is also decentralized since deposits exist in many places on Earth. However, gold is not digital.
The shares of a company listed on the stock market are limited and can be scarce. They are digital since they can be traded online. Nevertheless, shares of a company are centralized. Moreover, a company always can issue new shares on the market, which implies that scarcity is not absolute.
The Peer-to-Peer BitTorrent data transfer protocol makes it easy to download a wide range of audio and video content. This network is decentralized and digital. Nevertheless, all the content is available in abundance, so there is no such scarcity that would give value.
Bitcoin is therefore a unique invention in the history of mankind.
Considering Bitcoin as just another technology leads to erroneous conclusions
Those who consider Bitcoin to be primarily a technology are convinced that a successor will come to take its place in the future. Some waste their time and money looking for the next Bitcoin.
They even go so far as buying tokens of other cryptocurrencies and then criticize Bitcoin to convince themselves that their choice is not a monumental mistake. Others want to diversify with these Altcoins thinking they are hedging against the risk of a potential Bitcoin failure.
This diversification strategy is a pure illusion because all these Altcoins are dependent on the success of Bitcoin. Without Bitcoin, these Altcoins would not exist. If Bitcoin fails, these Altcoins will fail.
When Bitcoin succeeds in its revolution, 99% of these Altcoins will have seen their price tend toward zero.
Searching for the next Bitcoin is as useless as searching for the next Internet.
Bitcoin is not just another technology that can be replaced by better technology. Many Altcoins are created then pointing out that their technology is more advanced than Bitcoin.
All these Altcoins explain that the Proof-of-Work which is at the heart of the Bitcoin protocol is outdated because it consumes too much electricity.
The people who created these Altcoins explain that the Proof-of-Stake, or another centralized consensus algorithm, is the future.
By choosing to go in this direction, these Altcoins lose the decentralized side which is an incredible strength of Bitcoin. These Altcoins add nothing more to what we know about the current monetary and financial system. What is the point of replacing a flawed centralized system with another that will become one sooner or later?
I see no point in it. Neither do all the other Bitcoiners.
Bitcoin is money, its protocol needs to be stable
Some people criticize Bitcoin by saying that its protocol is no longer evolving, or not fast enough. These people do not understand that Bitcoin must evolve at this rate because Bitcoin is money and not just another technology.
The slightest bug that would be forgotten in the source code of Bitcoin would be catastrophic. It would cost billions of dollars and could jeopardize an entire system designed to give millions of people the ability to opt out of the current monetary and financial system that is flawed.
Bitcoin is evolving at the pace it needs to evolve to ensure that the interests of all its users are safeguarded. The goal is to build a credible alternative to the current system. This monetary revolution takes time, and you must be patient and have complete confidence in Bitcoin.
Otherwise, you will not be able to make the most of the Bitcoin revolution by becoming a Bitcoin HODLer no matter what.
Without Bitcoin, there’s nothing revolutionary about the Blockchain
I read some people say that Bitcoin is the king of the cryptocurrency industry simply because of its first-mover advantage. Based on this erroneous assumption, many say that Bitcoin will be replaced by an Altcoin in the future.
To support their demonstration, these people take the example of MySpace, which was the first to enter the world of social networks, and which was later supplanted by Facebook.
Their mistake here again is that they consider Bitcoin to be just another technology, whereas Bitcoin is the protocol for money on the Internet.
Comparisons between Bitcoin and MySpace are meaningless because Bitcoin is not a startup.
The Internet has never been replaced despite its many flaws. Thousands of developers are working daily to improve the Internet to correct the defects. For Bitcoin, the same thing is happening.
The other Altcoins are just haphazard attempts to try to demonstrate that the Blockchain can be used successfully outside of Bitcoin.
It is a failure, and it will remain so because Bitcoin and the Blockchain are interdependent. Without Bitcoin, the Blockchain is just an additional storage technology that does not bring anything revolutionary.
The Blockchain is a revolution because it allows Bitcoin to be this revolutionary monetary protocol. Outside of this use case, the Blockchain is nothing extraordinary.
Some do not understand what money is
Those who don’t understand that Bitcoin is money are probably mistaken because they don’t understand what money is.
I often read people write that money is an asset. In reality, money is not an asset, and it does not have to be. Money is a ledger that allows for exchanges in a system.
In concrete terms, money is a socially constructed and politically supported claim on goods and services.
The value of money lies in the collective agreement of a community to honor what money represents.
Therefore, money itself is not a store of value. On the other hand, the agreement of the community to honor what the money represents is a store of value.
Thus, Bitcoin is money backed by the tacit agreement between its users about what it represents. The mathematics at the heart of Bitcoin’s source code is there to ensure the security and proper functioning of the network.
However, Bitcoin is not backed by mathematics as some people say. Bitcoin is backed by the belief of its users in what it stands for.
The number of people who believe in what Bitcoin stands for continues to grow. For this reason, Bitcoin cannot be replaced by technologies that claim to be superior. Without users, technology is useless.
Conclusion
All the Altcoins, which are created only to generate money for their founders, will not be able to match the utility of Bitcoin.
The unique invention took place with Bitcoin, which is the real revolution. Bitcoin cannot be replaced because it is full-fledged money that makes the lives of its users better.
Bitcoin will evolve to correct some of its limitations, but it will remain the only cryptocurrency that matters in the future. The sooner you understand this, the sooner you can truly enjoy Bitcoin.
