Despite reaching all time highs, BTC's net effect on the wider world of cryptocurrencies is mostly negative.
It's easy to look at the immense value BTC has accrued - and the concurrent fame/notoriety - and conclude that BTC has helped cryptocurrency as a whole.
There is, of course, something to be said for this - at least on the surface. Namely, any press is good press in the world of advertising, and there's no doubt that BTC has propelled the word "crypto" and all its iterations irreversibly into the zeitgeist.
However, the immense publicity BTC has brought to bear on the cryptocurrency sphere is about the only net positive effect it's had (And, as I'll discuss, perhaps even that is not so positive). In most other respects, in my opinion, BTC is a net burden on cryptocurrencies in general.
By far BTC's greatest strength at this point is its enormous stored value. If there's one thing everyone knows about BTC it's that 1 BTC is worth a bucket of fiat currency. They may not know exactly how big that bucket is at any given moment, but they know it is humongous.
BTC's tradeable value is often touted as it's greatest strength - often equating it to the digital equivalent of Gold. However, this is a dubious comparison, at best.
Between 2014 and 2021, the price of Gold never fell below 1050 USD per ounce. Moreover, in that same time, it has not increased beyond a high of just over 2000 USD per ounce.
Compare those number to BTC and the comparison quickly looks absurd. BTC started 2014 riding just below 1000USD. Between 2014 and 2017 its price held a fairly unassuming range between 300 and 1000 USD.
Between 2017 and 2019 things start to get fucking crazy - with a high of about 17K and a new low of about 3.5K. In terms of volatility, these kinds of price swings are about the exact opposite of what you'd want in a long term store of wealth.
But all that pales in comparison to this recent lunacy, with the price of BTC as of writing at 43K USD - and having lost over 4K USD in value in a single day and nearly 10,000 USD in just a week.
This is not how gold works. This is not how an inflationary hedge works. This is how tulips work.
The immense value and more immense volatility in BTC makes any claim of it being digital gold borderline ludicrous. It is an absolutely immense speculative bubble of epic proportions.
To people who understand it is a speculative bubble, blind BTC support appears financially baseless and undermines confidence in cryptocurrency in general.
To people who don't understand it is a speculative bubble, they are investing under false pretenses and either have been or almost certainly will be burned, and badly - thereby undermining confidence in cryptocurrency in general.
If you ask the average person about crypto currencies, despite the technology entering its third decade, most are still likely only to know about BTC. This is a boon to the BTC acolyte riding the theoretically endless HODL escalator to infinity. But for anyone involved in the larger cryptocurrency sphere - or in simply holding an asset that won't give you bleeding ulcers - BTC's singular name recognition is a substantial detriment.
Leaving aside the obvious problem of BTC myopia - namely that no one invests nearly as much in other, healthier and more robust coins - the biggest problem with BTC's monopoly of public interest is the misconception that BTC is representative of all cryptocurrencies in general.
First, this is obviously untrue on a technical and cultural level. The world of alt-coins is wide and diverse, with coins catering to just about every group and use case imaginable. On a purely technical level, the focus on BTC by the public at large does an enormous intellectual disservice to public understanding and intelligent investment.
But second, and most importantly, the public's delusion that BTC is the monolithic center of the cryptocurrency world means that every negative thing about BTC - whether warranted or unwarranted - is quickly impugned onto other cryptocurrencies.
As a practical matter, this manifests as the sad price trail of alt-coins following far behind BTC prices. When BTC rises, you see lesser rises in all other currencies. When BTC falls, you see concurrent, but deeper falls in alt-coins. When it recovers, you see a lesser recovery for the alt-coin sector.
When the public see BTC's insane price volatility, they impugn all crypto currencies as being lotto tickets - which, thanks to being tethered implicitly to BTC, they often are. When people are burned investing in BTC, they swear off all crypto, at least until the next BTC boom.
When they hear BTC is insanely inefficient - both in terms of transfer time and transfer cost - the notion of inefficiency is impugned on cryptocurrencies in general, even coins transact cheaply, with speed and ease.
When members of the public at large see BTC as a speculative asset with no long term practical use case they consider all cryptocurrencies to be as useless. Of course, that's totally untrue - and one need only look to BCH, ETH, or ADA to see as much. \
When the public hears that BTC uses more electricity to mine than some small countries, they come to believe that other currencies are equally energy intensive - even coins that don't rely on mining in the first place.
Keep in mind that when I'm talking about "the public at large", I am also talking about the majority of the individuals in government and the private sector who have both the most capital to invest and the unenviable task of regulating and taxing crypto. Like it or not, these people, though hewing to antiquated views, still hold many of the keys. When BTC blinds these people the regulatory results have and will continue to ramificate across the whole crypto market in ways that are frighteningly hard to predict.
The larger public believes that BTC is the face of all cryptocurrencies
As a result, they baselessly attach failings in BTC as a currency onto all other cryptocurrencies.
This has the effects of undermining the publics ability to technically understand more robust coins and tokens; preventing widespread adoption and investment in other tokens; and ultimately causes negative experiences with BTC to baselessly bleed into sentiment about the rest of the market.
BTC myopia in the eyes of regulatory agencies and large market players, has and will continue to lead to regulatory frameworks and changes that work to the detriment of currencies that work nothing like BTC.
For anyone who is not a BTC acolyte, and has spent anytime in the various alt-coin ecosystems, one of the most frustrating and damaging effects of BTC is how it furthers the myth of all Cryptocurrency's being useless.
As a preliminary matter, one need not be a zealot to any particular alt-coin, or hold any particular enmity toward BTC, to make an honest appraisal of BTC's real life usefulness - or, frankly, lack thereof. In truth, about the only real similarity BTC has with Gold as an asset is the expense and time it takes to transact in it.
Like Gold, BTC sells at a substantial premium - in the form of high transaction fees - a premium that, like gold, is more pronounced the smaller the amount being transacted.
Moreover, like gold, BTC is, in a digital sense, heavy as all hell. It doesn't take a genius to see that BTC's averaging in the 2-6 transactions per second range, and often taking well over an hour to confirm, makes the currency damned near impossible to use for any reasonable, real life or real-time purpose.
This is, of course, not true of many other cryptocurrencies. Obviously, you can point to BCH's roughly 110 transactions per second as an example relevant to this platform. But that still pales in comparison to other alt-coins. Cardano is estimated to be in the 100-1000TPS depending on what you read, with that number likely to scale enormously in the future. Ethereum is at or over 3,000 TPS. Meanwhile, even more obscure coins like Steem or Hive have been regularly carrying out tens of thousands of transactions per second for years with a paucity of public attention.
None of this, however, matters to the vast majority of ill informed members of the public, in large part because BTC takes up the entire screen, and makes it easy to dismiss an already complex and varied technology by pointing to the weaknesses inherent in its very first iteration.
The litany of problems with BTC, combined with its place in the economic spotlight, helps perpetuate negative myths about cryptocurrencies in general.
Many of the problems with BTC - TPS, confirmation times, transfer costs - have already been solved by numerous coins - but in general BTC and it's antiquated problems still rule the narrative for most of the barely informed public.
What is the solution to this glaring and persistent problem? As always, it is likely multifarious.
First, it is certainly true that with time has come a greater understanding of the width and breadth of the cryptocurrency space by more and more average consumers. Although the fanfare around BTC will delay that unnecessarily, with enough time information will trickle through the general population.
The problem is that trickle will likely always be a trickle and as a result will lead to silly outcomes - most recently Dogecoin's meteoric, ridiculous, and necessarily temporary rocket to the moon.
Ultimately, although it is inevitable that the general public will become more informed with time about cryptocurrencies, they will do so piecemeal and never with great depth. Moreover, they will hit countless speedbumps along the way - i.e. losing savings on a meme coin - which will only further delay mainstream adoption of truly high functioning currency. In the end, even an "informed" general population will, by and large, only have a fleeting, narrow view of the space.
Which leads to the second important solution: when BTC inevitably smashes enough people upside the financial head, and the market gets through the resulting backlash, some other coin will eventually come forward. Some other coin will assert dominance over the market. Moreover, that coin, once it achieves market dominance, will likely be dominant for a very very long time.
Which isn't to say that there won't be a strong and broad ecology of alt-coins out there. On the contrary, that too is here to stay.
But, make no mistake, what we are witnessing now - the conjunction between fiat and digital currency, is very likely an irreversible alchemical/social/economic process from which will eventually arrive a dominant winner. Barring truly fundamental changes to the way BTC works, it is all but assured that BTC will not be that winner in the mid to long term. (Though presently the upside of this speculative bubble is unknowable).
So, if not BTC, then what? I really don't know, but it's gonna be a hell of a ride.
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