Every four years or so, bitcoin’s seemingly cyclical nature rears its head and the rise of another bull market begins. There are headlines across mainstream media outlets boasting massive price action, and droves of people start coming out of the woodwork to claim that they have been long on bitcoin for years! However, there is also another, more nefarious cyclical event that inevitably surfaces as well. The seemingly irresistible allure of alternative cryptocurrencies, tugging at the minds and wallets of individuals who are looking to recapture what bitcoin has achieved.
Those who think they have missed out on bitcoin begin looking to compensate by finding the next big thing, because they are plagued with the mindset that they somehow have “missed out” on bitcoin. There’s no shortage of these dubious crypto assets that claim to be able to unseat bitcoin. They might declare to have faster transactions, cheaper fees or that they are capable of more complex applications. There are literally thousands of these coins, and they have all failed to dethrone the king for 12 years running.
Crypto Copy Cats Will Continue To Fall Short
Silicon Valley startups go to sleep at night, and dream about building something that captures the massive returns that bitcoin has offered. Bitcoin has gone from being an idea on a white paper worth $0 to having a $700 billion market cap in just 12 years’ time. All with no funding. No CEO. No marketing team. Just the correct set of economic incentives, embodied in a robust protocol that continues to grow and adapt against all odds. What Silicon Valley’s tech crowd is failing to realize is that this is not solely a competition for who has the best technology or marketing strategy. Bitcoin is truly the first creation of digital scarcity, and was built in such a way that once its first version was released, it would never change.
This is exactly the opposite of what you would want to do with the software underpinning a $700 billion financial network. Their efforts fail to realize that it is precisely these boring, slow and unchangeable characteristics of Bitcoin that make it so great. At its core, a base layer protocol that aims to be the foundation upon which an entire financial system is built should be exactly that. Rigid, slow-moving, precise and unchangeable.
Blockchain Buzzwords And Decentralization Theater
Crypto projects everywhere are trying to woo investors with marketing efforts, business partnerships and buzzwords like “blockchain technology.” Their marketing budgets may be large, but their words are hollow. Many crypto projects love to plaster the term “decentralized” all over their websites and marketing materials, as if it gives their coin an air of legitimacy.
Bitcoin’s code base is maintained by a widely-dispersed set of developers all over the world, and its network is made up of tens of thousands of individuals freely choosing to run its open-source software. With Bitcoin, there is no marketing budget. In fact, there’s no marketing department at all. There is no leader, no CEO and no HR department. Bitcoin does not have employees on a payroll. Rather, Bitcoin works by aligning human action through a series of elegantly-balanced economic incentives.
Bitcoin even has its brand marketing taken care of. There are thousands of evangelists, writers, podcasters and educational content creators alike who all feel compelled enough to take up the task best suited to them. Out of their own free will, they work to propel the network forward, and push for the mainstream adoption of this nascent digital asset because they believe in the protocol rules and monetary policy enabling a non-sovereign sound money to emerge on the free market. This is what true decentralization looks like.
More Than Just Technology
Yes, at its core, Bitcoin is just code. It is a software program, widely dispersed and run on individuals’ computers. But do not let that confuse you into thinking this is solely about technology. Bitcoin’s success is rooted in monetary and social revolution as well. It is the antithesis of the debt-based monetary system we have today. Its network effects have propelled it outside of reach from any competitors for a myriad of reasons. Chief among those is its ability to incentivize humans to carry out the protocol rules via social consensus.
Credit : nasdaq.com