On reddit and other forums I am seeing a lot of people comparing the bullrun of 2017 to the current ongoing bullrun. Although there are similarities, mainly being the huge increase in value of Bitcoin and various alt-coins - there are also some significant differences.
Cryptocurrencies - The Unknown
Back in 2017 Bitcoin was still an underground project, and to be honest I would expect the majority of people had not heard the name Bitcoin back in July 2017. If they had, they probably only associated it with buying drugs or weapons from corners of the internet that many people have never accessed.
Bitcoin was getting noticed more, and other projects had changed the entire scene. However, lets put things in perspective. In January 2017 Ethereum was worth a mere $10.50 on average - after spending almost the entirety of 2016 between $5-$7 (It did reach $11 in 2016 briefly before the DAO incident.) By the 3rd of December it was worth $736, and in early January 2018 - during the so called "alt-season" it hit it's then all time high of $1,439.
It wasn't really until mid 2017 that the ICO craze began, people realised that creating ERC-20 tokens on the Ethereum blockchain was actually quite simple - they were also beginning to realise the capabilities of what could be done within a smart contract on the Ethereum blockchain.
Although this led to many legitimate projects that are ongoing today, it also led to a huge amount of scams. Some intentional, some unintentional. The intentional ones had great websites, great roadmaps and a fake dev team that looked great. You sent your Ether or your Bitcoin and they sent your ERC-20 token to your Ethereum wallet. However, there was no actual project. The unintentional ones began with good intentions, however as the market crashed in 2018 they simply gave up on the project - but kept peoples cryptocurrency of course.
The Internal Arguments At the Bitcoin community.
Bitcoin had been dealing with internal arguments for a while, the main argument being the block size limit of 1mb. Satoshi Nakamoto's posts on the bitcointalk forum indicated that the blocksize would need to be increased as the transaction demand increased. The development team split when it came to the point that the block size required an increase. Instead of implementing increasing the block size, they implemented changes to the code that would allow slightly more transactions per block - namely SegWit.
On August 1st 2017 the argument came to an end when Bitcoin was forked. It was on this day that Bitcoin Cash was formed. Although BTC is still the official Bitcoin, BCH (Bitcoin Cash) is the coin which follows the original whitepaper written by Satoshi - A Peer-to-Peer Electronic Cash System.
December 2017 - The Parabolic Bubble
In December 2017 Bitcoin (BTC) price began to rise in a parabolic fashion. There was a frenzy in the entire cryptocurrency community. Bitcoin was mentioned on the mainstream news, money flooded in and the price of Bitcoin reached a high of just under $20,000. It had started the year at just $900.
There was a lot of greed, a lot of scams, and a lot of money to be made at this point. As Bitcoin dropped in value money flooded into "alt-coins". There was talk of white papers, technology, a paradigm shift in finance. The market however was still not mature enough. Money flooded into alt-coins whether they had any real life use-cases or not. During the beginning of 2018 you could basically make money on any cryptocurrency. It didn't last for long.
As the scams became more obvious and projects failed to deliver on promises, money slowly pulled out of the cryptocurrency area. The mainstream media coined Bitcoin and cryptocurrency a failure and slowly it was forgotten by the masses.
Between 2017 and Now
Although the media had long stopped talking about cryptocurrency. Quietly institutions were buying Bitcoin. Banks started looking at blockchain technology and although the value of bitcoin remained low during the bear market, institutions and investors were quietly accumulating Bitcoin, Bitcoin Cash, Ethereum and other cryptocurrencies that they saw value in.
We also saw the benefits of Decentralized Finance (DeFi). Mainly running o the Ethereum blockchain, but with others following suit. The Cardano project (ADA) got closer to releasing it's working project, Tezos (XTZ) also had working smart contracts that intended to work side-by-side with Ethereum.
Bitcoin Cash continued to follow the original white-paper set out by Satoshi. The developers managed to implement various OP-CODES that had been removed from the Bitcoin code and also added some new ones. This allowed for tokens to be created on the BCH chain - Simple Ledger Protocol (SLP).
What Makes this Bull Run Different
The answer to this question is really not a simple one. There are so many different aspects that combined make this bull-run completely different to the last. Bitcoin (BTC) no longer aims to be a peer-to-peer electronic cash system, however it now has taken the Store-of-Value moniker. Another term being thrown about for Bitcoin is Digital Gold. Bitcoin may no longer be following the original whitepaper by Satoshi, but with banks, institutions, huge companies (Including a $1.5bn purchase by Elon Musk - amassing a total of 8% of Tesla's cash reserves). Bitcoin (BTC) is continuing to remain the market leader of cryptocurrencies - and at least for the foreseeable future it will remain to do so.
One of the biggest differences now is that other cryptocurrencies are not trying to out-do BTC. They are not trying to become the new market leader. BCH continues to deliver what Bitcoin set out to do, and they are doing it well. At the time of writing the median fee for a transaction on the BTC blockchain is $11, the median fee for a transaction on the BCH blockchain is $0.0016. This website has been set up so you can see the average cost of transactions on both blockchains. Another well made website that helps visualise the transaction fees and the mempool issue is transaction Street - comparing ETH, BCH, and BTC.
Ethereum is having it's time to shine as well. The fact that ETH 2.0, although delayed - is finally on the verge of becoming a reality is making Ethereum attractive to institutions as well. The growth of DeFi over the past couple of years has proven that Ethereum is much more useful than for simple ICOs. Ethereum transaction fees are currently even higher than BTC, especially when sending ERC-20 tokens - which a lot of high market cap cryptocurrencies are. Although ETH 2.0 should fix this problem, it's not currently here and the fees are only increasing. This is making other projects with smart contract implementations and lower fees more attractive to newer developments.
The market has matured significantly since 2017. A lot of people got caught up in the frenzy and ended up losing a lot of money as the market crashed. A lot of the companies that were vocally against cryptocurrency in 2017 are now embracing it. Visa, Mastercard, and PayPal are just a few of them - but many others are now joining in.
Although the market has matured, it is still far from being a mature market. Considering Bitcoin didn't exist 12 years ago this is hardly a surprise. The fact that large companies, institutions, and investment firms are now taking Bitcoin and cryptocurrency seriously is the biggest difference to 2017. Although the original idea of banking for the unbanked may have been lost with BTC, the original ideology lives on through BCH.
No one can predict exactly what will happen in the coming months and years with cryptocurrency and blockchain technology, but one thing is for certain - that this is still just the beginning.
