I've come full circle, BTC is the only worthwhile cryptocurrency

[100action]

After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project.  Also by the thread title, you can probably tell its not my first rodeo.

Some of my strongest reasoning is specified below, it is by no means comprehensive.  While I may have typed the below with conviction, I am openminded to other views (my wallet compels me so) - please put forth your opposing views.

• PoW is the only true Byzantine Fault Tolerant consensus mechanism.  PoS is not BFT at this point in time and I do not see how it gets there.  At the end of the day, under PoS and the many other consensus mechanisms, one needs to trust a third party to relay them the correct data and that is assuming that one can be certain that the delegated node holds the majority of the voting power – this is not trustless and re-introduces third parties.  With PoW, I can verify the hashes and the longest chain is the correct one.

• Bitcoin as a base layer focuses on censorship resistance, immutability, security and decentralisation.  Second layer solutions (scalability/escrow) can be built on top.  Claims by other ‘cryptocurrencies’ to be ‘better than bitcoin’ are ignoring trade-offs involving BTC’s key features.  Any appreciable increase in throughput will reduce security, decentralisation, immutability and censorship resistance.

• There cannot be a ‘next Bitcoin’ and the paradox of replacing a store-of-value (SoV) applies.  Any successful replacement of BTC will forever undermine the credibility of any successor.  We are instead made to forever question the replacement of a SOV.  How is an investor to know it won’t happen again?.  Any other attempt at digital money ‘fails by succeeding’, it fails the eco-system by replacing Bitcoin and ultimately fails itself.  By way of example, Gold is the precious metal SOV of choice, most governments/institutions warehouse little or no silver.  If silver supplants gold as a SOV, then I’m all out of precious metals because one cannot trust silver will maintain its SOV dominance.

• Medium of exchange(MoE) aside, I can’t think of another legitimate use case for ‘decentralisation’.  At a stretch illegal marketplaces may benefit from decentralisation given the risk of censorship or seizure of assets.  All these other uses cases like smart cities, record keeping, supply chain, fundraising etc are far better managed through centralised databases where it is not unacceptable for the user/operator to bear some of the risks cumbersome decentralised platforms seek to eliminate.
  

• If (and it’s a big if) smart-contract enabled platforms finds widespread commercial use, the ‘utility’ basis for value for many of these smart-contract enabled platforms acts as a ceiling to price.  An increase in fees to use the network will result in competitor chains becoming more attractive.

• For smart-contract enabled platforms, infrastructure limitations decrease the ability of users to run fully validating nodes (compared to a cryptocurrency targeting a MoE use only).

[1714047392]

1714047392

[hatshepsut93]

After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project. 

All your points are valid and I'm happy to see that there are users who understand the fundamentals of cryptocurrency instead of parroting the narratives created by altcoins' marketing teams.

I think that there are 2 kinds of altcoins that currently have some uses and as the result hold some value. The first type is privacy coins - Bitcoin's privacy is pretty bad, and the most common solution to it - mixers, requires some trust. If Bitcoin will solve privacy, privacycoins will become obsolete.

The second kind is coins with relatively good security and adoption. They can be used as a plan B when Bitcoin's fees temporarily skyrocket. They can be used for small transactions or for moving value between services to save on fees. But again, when Bitcoin will solve scalability, these coins will become useless too.

[dnprock]

I think, in terms of money use case, there are other categories of crypto money. Most cryptocurrencies try to be some kind of Store of Value. Crypto space has not focused enough on money use cases. I think there is another category of decentralized cryptocurrency: inflating cryptocurrency. I made a diagram to illustrate emerging kinds of cryptocurrencies.

[Searing]

I kinda have also come to your conclusion.

Have like 4 Altcoins I'm hodl'ing because well, hoping for a pump and not underwater yet.

The only one I do have a bit of faith out of the above 4 is Litecoin and that is simply for Mimblewimble.

But at this rate, I'll have cashed out the remaining above at HOPEFULLY the next pump and be all in for BTC.

It is obvious that where BTC goes all the altcoins follow anyway, just have to pare this down from these last 4 altcoins hoards of any note.

I did have a dozen altcoins hodl's at one time...so it is progress.

later

Brad

[pakhitheboss]

After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project. 

All your points are valid and I'm happy to see that there are users who understand the fundamentals of cryptocurrency instead of parroting the narratives created by altcoins' marketing teams.

I think that there are 2 kinds of altcoins that currently have some uses and as the result hold some value. The first type is privacy coins - Bitcoin's privacy is pretty bad, and the most common solution to it - mixers, requires some trust. If Bitcoin will solve privacy, privacycoins will become obsolete.

The second kind is coins with relatively good security and adoption. They can be used as a plan B when Bitcoin's fees temporarily skyrocket. They can be used for small transactions or for moving value between services to save on fees. But again, when Bitcoin will solve scalability, these coins will become useless too.

In a way you are correct but, not all Altcoins are bad. The supreme cryptocurrency is Bitcoin, there is no doubt about it. But, you cannot ignore altcoins like Ethereum and exchange coins like BNB. You will need them as long as they have a platform which needs them. You cannot ignore these Altcoins .

[100action]

After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project.

All your points are valid and I'm happy to see that there are users who understand the fundamentals of cryptocurrency instead of parroting the narratives created by altcoins' marketing teams.

I think that there are 2 kinds of altcoins that currently have some uses and as the result hold some value. The first type is privacy coins - Bitcoin's privacy is pretty bad, and the most common solution to it - mixers, requires some trust. If Bitcoin will solve privacy, privacycoins will become obsolete.

The second kind is coins with relatively good security and adoption. They can be used as a plan B when Bitcoin's fees temporarily skyrocket. They can be used for small transactions or for moving value between services to save on fees. But again, when Bitcoin will solve scalability, these coins will become useless too.

In a way you are correct but, not all Altcoins are bad. The supreme cryptocurrency is Bitcoin, there is no doubt about it. But, you cannot ignore altcoins like Ethereum and exchange coins like BNB. You will need them as long as they have a platform which needs them. You cannot ignore these Altcoins .

The more I read and think about ethereum, the more unanswered questions I have.

The most concerning being:

1. The vast majority of DApps are better off on a centralised database (see original post).
2. The only use case that may benefit from being on a decentralised platform is an illegal marketplace.  Ethereum has proven to not be immutable with the DAO hack and I think it's no longer a candidate for this use case.
3. Eth has a 'utility' basis for value. The cost of utility (gas) act as a ceiling to price.  An increase in fees results in more competitor chains becoming attractive.
4. Exponentially increasing blockchain size and decreased ability for one to run full validating nodes.
5. PoS is not BFT

Eth may fill a niche market for smart contracts but why you would speculate in ETH over something that:

• is the perfect storm of being the first mover, most decentralised built on the back of guiding principles in security, stability, censorship resistance and immutability
• benefits immensely from the network effect of a sound store of value, where an increase in price only creates additional demand and legitimisation

[Sadlife]

support everything that you've mentioned and its already proven for how many years,looking at the price and the capitalization?and the transactions per day?i am sure that only Bitcoin is the most safest and practical way of investing here in cryptocurrency market

In a way you are correct but, not all Altcoins are bad. The supreme cryptocurrency is Bitcoin, there is no doubt about it. But, you cannot ignore altcoins like Ethereum and exchange coins like BNB. You will need them as long as they have a platform which needs them. You cannot ignore these Altcoins .

yups thats also correct and it is exaggerated to say that all altcoins are bad because there are plenty of them that is legit and until now bringing good in this market so basically its just a matter of supremacy is the issue and not tha existence of altcoins.

[pooya87]

There cannot be a ‘next Bitcoin’ and the paradox of replacing a store-of-value (SoV) applies.  Any successful replacement of BTC will forever undermine the credibility of any successor.

bitcoin is not a store of value, bitcoin is FIRST a CURRENCY and then because of a dozen reasons it can be used as a store of value.
and there can be "next bitcoin" but it doesn't have to replace bitcoin! it is like saying there could only be room for only one CPU (Intel) and there is no room for another one (AMD).
if some day a better innovative idea came along that could be as good as bitcoin, it will simply grow to bitcoin levels and is used alongside of it.

Medium of exchange(MoE) aside, I can’t think of another legitimate use case for ‘decentralisation’.  At a stretch illegal marketplaces may benefit from decentralisation given the risk of censorship or seizure of assets.

not everything is about illegal activities. most of the times it is about not wanting to bend over to the corrupted  centralized power. look at India for instance.

It is obvious that where BTC goes all the altcoins follow anyway, just have to pare this down from these last 4 altcoins hoards of any note.

well, i don't know how obvious it is because i can not find any altcoin at all that has followed bitcoin over the past 22 months! over that period altcoins have constantly gone down while bitcoin had its fall and then has been rising for the past 10 months.
for example bitcoin dropped ~80% and after reaching bottom in Dec 2018 it started rising a couple of months later and has gone up 250% in total
litecoin has dropped ~80% and after reaching the bottom Dec 2018 it had a little dead cat bounce where it goes back up for some time and then comes back down again to the same bottom it reached in 2018!

[Kyraishi]

Very well made post mate, it's getting rarer and rarer for there to be people who actually have seen all/most of the crypto-currencies, and haven't fallen to the marketing jargon and come back with a clear mind.

Medium of exchange(MoE) aside, I can’t think of another legitimate use case for ‘decentralisation’. 

This particular line in your post caught my eye, for a particular reason. There's been a lot of new crypto-currencies that have been made the last couple of years, and a lot of them add random, useless features like "decentralisation" or "blockchains" when they, to simply put it -don't need it.

[100action]

........

I will address three fundamental flaws with your reply.

bitcoin is not a store of value, bitcoin is FIRST a CURRENCY and then because of a dozen reasons it can be used as a store of value.

Bitcoin is absolutely a store of value and designed as such with a emission schedule imitating that of gold.  The base layer has throughput limitations that preclude it from being a 'currency' useful for general/micro transactions.

It's borderless, secure, censorship resistant, immutable and decentralised.  There is $30 trillion in tax havens and swiss banks, using BTC as a SOV is a no brainer.

Additionally, BTC's deflationary nature does not encourage transactions and by extension lends itself to hoarding which would be more in line with an SOV.  People in this forum hate Keynesian economics (and perhaps for good reason), but its proven deflationary assets experience lower use and becomes hoarded.

and there can be "next bitcoin" but it doesn't have to replace bitcoin! it is like saying there could only be room for only one CPU (Intel) and there is no room for another one (AMD).
if some day a better innovative idea came along that could be as good as bitcoin, it will simply grow to bitcoin levels and is used alongside of it.

Bitcoin as a SOV is fundamentally different to two different companies delivering mass market products - we would be comparing apples with oranges.  There can only be one dominant SOV which is explaned in my original post.

By way of analogy, Silver has more market uses than Gold, why are governments/institutions hoarding gold over silver?, why has government/institution inventories of silver dropped precipitously to almost non-existant levels?

Both these articles are excellent and reinforce my point on Bitcoin as the dominant SOV and the problem with utilities:

https://medium.com/john-pfeffer/an-institutional-investors-take-on-cryptoassets-690421158904
https://medium.com/john-pfeffer/doubts-about-the-long-term-viability-of-utility-cryptoassets-db04350b1f55

not everything is about illegal activities. most of the times it is about not wanting to bend over to the corrupted  centralized power. look at India for instance.

I never claimed this to be the case.

My point is that there is pretty much no point in decentralising uses aside from money (MoE) and perhaps illegal market places.  All other uses are better suited to centralised databases where the market (operators and users) are happy to bear the risks cumbersome and expensive decentralised platforms seek to eliminate.

[ChrisPop]

That is a great write-up @100action! You might wanna put together a little more content and format it & publish it on Medium or so. It is very important to keep things into perspective. All the altcoins got hurt much more than BTC in the bear market so that's another indication why it is the only viable crypto store-of-value. Regarding the smart contract functionality I'm sure it can be implemented on BTC as well. RSK(Rootstock project) offers smart contracts secured by the Bitcoin network & I'm sure multiple functionalities can be built upon Bitcoin through extra layers.

[tsaroz]

It also took me some time to realize after I earned and lost on so many altcoins. The only coin with consistent future is bitcoin. If you look at the price of coins before and after the bear run, the bitcoin has been the most successful one. Ethereum holders lose more in the bear run than Bitcoin and BNB has performed more incontestably in last 6 months than bitcoin.

[BChydro]

In a way you are correct but, not all Altcoins are bad. The supreme cryptocurrency is Bitcoin, there is no doubt about it. But, you cannot ignore altcoins like Ethereum and exchange coins like BNB. You will need them as long as they have a platform which needs them. You cannot ignore these Altcoins .

How long these altcoins you mentioned will last is another question if you are looking for its longevity, Ethereum was an instant hit when all the scam projects could use that to collect money and there was a time when Vitalik Buterin was bashing bitcoin about its high fees at one point and he was very vocal about Ethereum and now what happened, he had to swallow his words and hide  . In short as long as projects or companies are using these platforms they will have some valuation and the possibility to go down to zero are high and that is not the case with bitcoin and that is the biggest difference between bitcoin and the rest.

@OP I do accept most of the things you mentioned but i do not agree with the store-of-value part.

[fiulpro]

It is infact true because I have seen all currencies showing their highs and lows but it was transient and it happened once and then we never see them again in the bull run .
This is exceptionally weird to consider that a win for currencies like this , because Bitcoins on the other hand is slow and steady these Currencies are abrupt , they suddenly change and goes down in moments and we will never see them get up again , this is why I like Bitcoins , this is why I invest 100% in Bitcoins instead of other currencies.

[Red-Apple]

But, you cannot ignore altcoins like Ethereum and exchange coins like BNB. You will need them as long as they have a platform which needs them. You cannot ignore these Altcoins .

what you are missing about ethereum and smart contracts is that it has been useless so far and the only people who are using it are the scammers trying to raise funds out of thin air and the gamblers who are giving up their money to see if they can win some profit.

if "smart contracts" were to become useful and have some real world applications other than what is currently is being used for then it will be used on top of bitcoin as a side chain or a second layer. there currently are at least one project that is doing it called RootStock. the subject is not popular because there has not yet been any real world usage and also these side chains aren't similar pump and dump coins like ether to give profit to be able to produce similar hype.

[BrewMaster]

everybody eventually reaches the same conclusions after a while. the time it took you seems a bit too high in my opinion (4 years). usually depending on the time people join this world it could take the maximum of one cycle of altcoin pump and dumps which is usually less than a year for them to realize the truths and start seeing past the "next bitcoin" advertisements.

[DooMAD]

I'd also add something to the list, but I'm struggling to find a way to phrase it so that it makes sense.  Or perhaps it's just an extension to the second point you made.

I feel like there's a link between the underlying principles of Bitcoin and the overwhelming momentum it has in terms of development.  Most altcoins are founded on the goal of mindless speculation and profiteering.  Some are founded to focus on a particular feature (although often a gimmick).  But few are founded on the genuine belief that the fundamental principles they are based on are important.  How many coins have faltered because they had a lone dev who simply lost interest in the project?  Probably thousands.  There's no longevity in cryptocurrencies that were founded to pursue the wrong goals.  

There's no doubt in my mind that Bitcoin has the strong dev base it does precisely because people care about "censorship resistance, immutability, security and decentralisation".  As such, a greater number of developers are more willing to commit considerable time and effort on their part to contribute to Bitcoin, rather than devs who focus on altcoins to make a quick buck.  People believe in this, so they strive to make it succeed.  Few, if any, coins can match that level of sheer passion.  Which is why Bitcoin is never going to have a shortage of contributors and the pace of development remains steady.

[Eugenar]

everybody eventually reaches the same conclusions after a while.

It still depends on how bitcoin do actually impacts an individual with regards to the investment they have in BTC as well as their trust if it is fulfilled or not. In a simple explanation, those investors and bitcoin enthusiast that can get what they want from BTC will conclude much that the current system is already enough, while those who are having a hard time gaining profits will think of the other alternatives to supple their needs.

usually depending on the time people join this world it could take the maximum of one cycle of altcoin pump and dumps which is usually less than a year for them to realize the truths and start seeing past the "next bitcoin" advertisements.

Well, for me it depends on the risk that a person is exerting. Because learning will be absorbed much efficiently if one is having a loss with their investment. Or in short, those that are committing mistakes are much likely to learn with an exception that when they commit a mistake, they will not do it again.

[Pearls Before Swine]

Wow, an excellent thread with thoughtful responses in bitcoin discussion.  That's a rarity.

Op, you made some very good arguments even if I don't fully understand some of the technical aspects of what you wrote.  What I found most interesting was your explanation of why proof of stake isn't as good as pow, because I like some of the pos coins and use a few for staking.  I don't think any of them have a fatal flaw, but I concede that their design probably isn't as secure as pow coins. 

bitcoin is not a store of value, bitcoin is FIRST a CURRENCY and then because of a dozen reasons it can be used as a store of value.

It was *supposed* to be a currency, but it isn't really being used for that so much as either a store of value or an investment, whatever the difference is there.  In fact I've always thought bitcoin was a crappy currency for a whole host of reasons, but it certainly can be used as one.  It isn't even that great a store of value since it has volatility that would make even penny stock traders nauseous. 

[Dabs]

Alts have their purpose, primary of which is to extract the most value out of whatever bitcoin you put into it, as, let's face it, most altcoins are paired with bitcoin on exchanges and almost nothing else.

They are the penny stocks of the crypto world.

As one post in 2016 or 2017 says, if an investor went in on the top 10 alts by marketcap with no regard to doing any other due diligence, he'd have made a lot more money than if he put the same fiat amount all in, in bitcoin. If he put it in bitcoin only, he'd make 8 to 9 times. If he "diversified" to the top 10 after bitcoin during that time, he'd make 100 to 200 times.

Let's just take ETH as an example, if you joined the ICO back in 2014, 1 BTC = 2000 ETH. ... Just remember to take your profits a few years later, but even if one did not, that ETH is still worth ... 40 times what BTC is worth today.

Like a lot of people, I looked at ETH, but did not participate. I looked at LTC, bought them at 20, sold them at 40 a week later, I think that was my best move then. I looked at EOS, ZCASH, DASH, I tried to join BAT but missed the deadline by 2 seconds or whatever it took to finish that one (crazy ico times) ... then I looked a bunch of smaller cap altcoins, and would have made some profits if we knew to cash them out in early 2018.

Of course, that's not fair and we don't have crystal balls, but we should have seen the so called crypto winter coming anyway.

Now, stablecoins are here, so it's either that or sell the alts to get BTC, eventually keep a large percentage in BTC, either to use or to just hodl.


If you're watching the regular stock market, I'd say altcoins are like the "Beyond Meats" ... you start at 70, pump up to 200, then it's now back to 70, and likely to go down, down, down.