“Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.” – Marc Andreesen
Bitcoin was envisaged as being the ideal form of digital currency. It has no single point of failure and does not rely on a centralized authority. It was and is the very insignia of the decentralized autonomous economy.
Altcoins are an endeavor to create a crypto economy where digital currencies act as the de facto form of payment and store of value for all ends and purposes. Ostensibly, the various facets of cryptocurrencies like the privacy, commodity, ease of application and distribution give it a veritable edge over conventional FIAT currencies.
However, the mainstream narrative has not emphasised upon these aspects and the fact that cryptocurrencies are relatively stable when they are paired against each other. The extant narrative puts the spotlight on bitcoin as it has achieved what the other altcoins have failed to do.
What has made bitcoin such a success?
Bitcoins are often touted as being a bubble which is ironic since this is more true of conventional FIAT currencies. Especially since FIAT currencies are backed by countries that are running into trillions of dollars of debt that is only increasing every here.
Presently, it is premature to think of Bitcoin and the rest of the crypto sphere as being a replacement for actual currency, it is also too early to discard the promise that they hold. Bitcoin holds a near monopoly over the cryptocurrency market and the endeavour by other altcoins to create a crypto-economy is still at a rather nascent stage.
Bitcoin has relied on keeping things simple and relies on the following factors:
3) Network Effects
Bitcoin has never experienced a hard fork. This has allowed it to garner more trust over various other altcoins in existence despite them having more utility. Bitcoin’s lead developers have placed more emphasis on safety, robustness and stability over features. This has granted it more value as a cryptocurrency.
Conversely, Ethereum has depicted a poor sense of pragmatism due to its repeated and arbitrary hard forks. Thus there has been a consistent decline in the trust and robustness depicted in the crypto despite various new features.
Perhaps other altcoins can take a page or two out of Bitcoin and become the torch bearers of the decentralized autonomous economy. Conceivably, an altcoin could takeover Bitcoin’s importance if it offers a unique value proposition without compromising on security, trust and robustness. With FIAT currencies being in the doldrums, the window to do so is now!