Investors Insight
Back in the ‘90s, AOL was the king of the dot-com trend. But when it failed to adapt, it crashed.
History is repeating itself with bitcoin — a once-hot tech that’s being left by the sidelines.
Discover the new crypto that’s about to displace bitcoin once and for all
BITCOIN: DETHRONED AS KING OF CRYPTO
Bitcoin is to crypto as AOL was to dot-com. It was the first cryptocurrency to gain widespread acceptance. It introduced the idea that something of digital value could be safely sent across the internet without the need for a middleman.
Like the internet in the mid-90s, blockchains and their native cryptocurrencies offer a new way of bringing the physical world into cyberspace. They’re also looked at as a passing fad.
Nothing could be further from the truth.
Bitcoin is the first iteration of cryptocurrency. It serves as a “digital gold.” However, like gold, most users would rather store it than spend it as a hedge against runaway fiat spending. Ironically, this means bitcoin’s value as a true form of money has its limitations.
All of that is changing. Ethereum is bitcoin 2.0. It’s a form of programmable money. Specifically, it’s a standardized token that can be programmed for specific digital use cases — such as buying cloud storage, computational power or network bandwidth.
It takes all the properties of bitcoin that make it money (durability, portability and scarcity) and builds on them.
Ethereum serves as the base for new cryptocurrencies that power the burgeoning space of decentralized finance (DeFi). These new tokens can be programmed to recreate traditional financial infrastructure to allow for digital trading, lending and derivatives.
By using a cryptocurrency, the new world of finance can be conducted without a middleman. You won’t need an institution such as Bank of America to lend you a line of credit or an online broker such as Schwab to settle your stock market trade. All of these financial practices can be handled autonomously....
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