"Blockchain is useful, Bitcoin is not" — How do you respond to this?

[sbercoin.one]

Tokenization vs Bitcoin — Institutional Arguments. Where Are the Weak Points?

I want to break down a thesis I keep hearing from traditional finance: "Blockchain is useful, Bitcoin is not."
I'm not saying they're right. But their arguments sound convincing to the average investor, and I'm curious how to counter them.

Context

In January 2025, JPMorgan CEO Jamie Dimon once again called Bitcoin a "Ponzi scheme." That same month, his bank reported $2B in daily transactions through its blockchain platform Kinexys and disclosed holdings in Bitcoin ETF shares.
This isn't an isolated case. Major financial institutions are separating blockchain as technology from Bitcoin as an asset. They're aggressively adopting the former while tolerating the latter as a temporary inevitability.

What Institutions Are Doing

BlackRock ($10T AUM) launched BUIDL in March 2024 — tokenized Treasury bonds on Ethereum. In 18 months: $2.9B, 40% of the tokenized treasuries market.
JPMorgan processed over $700B in repo operations through its Tokenized Collateral Network. In December 2025, they launched the first tokenized money market fund from a systemically important bank on a public blockchain.
Franklin Templeton registered an SEC-approved blockchain fund back in 2021. Current AUM: ~$800M.
The tokenized real-world assets (RWA) market stands at $24–33B, up 85% YoY.

Their Argument Against Bitcoin

The logic is straightforward:

1. Blockchain is useful technology. Instant settlement, transparency, programmable contracts.
2. Bitcoin was the first application of blockchain, but not the best.
3. Tokenized assets offer what Bitcoin doesn't: yield, regulatory protection, clear valuation, connection to the real economy.
4. When any asset can be purchased via blockchain — why hold a volatile token with no cash flow?

The Bitcoin ETF Paradox

Bitcoin ETFs have accumulated over $120B AUM. BlackRock's IBIT alone holds ~785,000 BTC — more than Strategy's 713,500 BTC.
But who are these buyers? Pension funds, hedge funds, wealthy investors. People who buy BTC through a brokerage account, pay management fees, and store assets with a regulated custodian.
They don't need Bitcoin's main feature — independence from intermediaries. They voluntarily add intermediaries. They want volatility exposure, not self-custody.
Institutions argue: this is adoption of Bitcoin as a speculative asset, not as technology.

Standard Counterarguments I'm Aware Of

— A tokenized Apple share ≠ an Apple share. It's a custodian's promise, not the asset itself. Bitcoin IS the asset.
— Counterparty risk: RWAs depend on issuers, regulators, jurisdictions. Bitcoin operates autonomously.
— Censorship resistance: Nigeria #EndSARS (2020), Canada Freedom Convoy (2022) — Bitcoin worked when traditional channels were blocked.
— Trustless vs trust-based: fundamentally different tools for different purposes.

Where I See Weakness in These Counterarguments

"Extreme scenarios" isn't an investment thesis for the mass market. 99% of investors aren't planning to evade sanctions or hide from governments.
$120B in ETFs shows: the average investor doesn't want freedom from the system — they want a convenient way to profit within it.
If tokenization covers 90% of the average investor's needs — what market share remains for "the asset without intermediaries"?

My Current Position (Open to Being Proven Wrong)

Bitcoin solves a problem most people don't have. "Store value outside government control" is a demand from dissidents and paranoids. Not from pension funds. Not from the average investor.
Tokenization solves a problem everyone has: how to make traditional assets more liquid and accessible.
If tokenization covers 90% of the average investor's needs — Bitcoin won't disappear. It will simply stop pretending to be "an asset for everyone" and settle into its true niche: a tool for those who trust no one.
That's not $1M per coin. Maybe not even $100K. But it's not zero either.
Jamie Dimon isn't a hypocrite. He sees the difference between a technology and its first application — and he's betting on the technology.
The only question is: what premium is the market willing to pay for trustlessness?

Questions for the Community

1. How do you respond to the argument "blockchain is useful, Bitcoin is not"?
2. Are ETF buyers adoption or just speculation?
3. If tokenized assets offer everything Bitcoin does + yield + regulatory protection — what remains unique about Bitcoin besides trustlessness?
4. Is the niche of "asset for those who trust no one" large enough to support current market cap?

Genuinely interested in hearing arguments from those deeper in the space. I might be missing something.

[BlackHatCoiner]

Bitcoin solves a problem most people don't have. "Store value outside government control" is a demand from dissidents and paranoids.

Absolutely not true. The main problem bitcoin solves is that it provides an alternative system of wealth preservation to the central banking cartel. In Michael Saylor's presentation on Microsoft, he summarized well the problems with other assets.

Tokenization solves a problem everyone has: how to make traditional assets more liquid and accessible.

There's one question that nobody answers me on tokenization: what happens if you lose your private key? Tokens on a blockchain are a bearer asset like gold and bitcoin, but property ownership in real life is mostly determined by law enforcement, e.g., a house or a company is owned by X only if it is permitted by the State of that territory. If X passes away, the ownership can be determined by the State. In the blockchain, however, nobody can move an asset without a valid signature.

[Alpha Marine]

Bitcoin solves a problem most people don't have. "Store value outside government control" is a demand from dissidents and paranoids. Not from pension funds. Not from the average investor.

I disagree. Bitcoin solves a problem everybody has. The problem is, people do not realise that it is a problem, and the ones who do, don't realise there is an alternative.
Most times, when people talk about "What does Bitcoin offer?" or "What problem does Bitcoin solve?" they often forget to talk about a very core part of Bitcoin, and that is the fact that it is a currency.
Don't get me wrong, I hold Bitcoin and I hope to make a profit from it, but its features as a currency should not be overlooked in this discussion. Again, don't get me wrong, I can count how many times I've purchased something with Bitcoin, except when I gamble with it, but that is because not many people accept it as payment.

It is the fact that it is a superior currency that allows it to be an asset. If somehow a modification happens today and Bitcoin becomes centralised and has an unlimited supply, its value will drop below $1000. If it becomes the sole currency of a country, like the dollar is to the US, it would have the same value as the dollar. People would no longer see it as a speculative asset.
So something gives it the value it has, not hype. The hype comes because of what it has to offer.

1. How do you respond to the argument "blockchain is useful, Bitcoin is not"?

Don't look at it as an asset first. Look at it as a currency first, then you will see its usefulness.
It's the superiority it has as a currency that makes it a valuable asset.

2. Are ETF buyers adoption or just speculation?

They don't hold or use the bitcoin, so it can't be adoption.

4. Is the niche of "asset for those who trust no one" large enough to support current market cap?

No, it cannot, but there is a reason it got to where it is today. When "those who trust no one" hold and use it, more people see the value and want to use and hold it. This will create more demand, and the price and market cap will increase, which will cause speculation. More people will see that they can make a profit if they hold it, and the more people buy, the more the demand increases and the more the price increases, which will increase the market cap.

If I start selling a log of wood in the financial market that increases in value regularly, more people will buy, not because they believe in the wood, but because they speculate that they can make a profit from it.
We've seen this in different things like NFTs. The main difference between the log of wood, NFTs and Bitcoin is that the wood and NFTs have no real value, so sooner or later, the bubble will burst.

[legiteum]

To big financial firms, "blockchain" (in heavy scare quotes) just means, "we can do the stuff we've always done with fewer or no regulations". They don't care what the technology itself is, which is why a leading "blockchain company", Hedera, doesn't even use the blockchain architecture--and numerically, almost all "blockchain" transactions done today are done on networks that are defacto centralized (PoS networks, etc.).

So when they say, "Blockchain is useful", they are really just saying, "we can make a lot more money when the stuff we do is unregulated".

As for Bitcoin, it's just a meme investment to 99% of it's investors today, and most get it through an app, a broker or an ETF where they are really just buying an entry in a centralized database, not actually interacting with the Bitcoin blockchain.

The reason why Bitcoin is not "useful" in a practical sense is because of something called, "the anon paradox" (google it).

The anon paradox states that individuals desire identity for their "big money" (you want your house, your car, your life savings, etc. to be stored under your name so you can't lose it), but, paradoxically, you want your "small money" (physical paper bills in your wallet) to be stored and spent anonymously in order to protect your identity in situations where the cost (risk) of revealing your privacy far outweighs the value of the transaction. In other words, if somebody wants a dollar for their podcast, you want to just give them a dollar "in cash" without giving them your credit card or personal information which incurs the risk of revealing your privacy, credit card, spam, scams, etc.

Since Bitcoin is absolutely useless for small transactions, and for large transactions Bitcoin's anonymity is irrelevant or even undesirable, Bitcoin does not have any actual practical usage: it's just a meme investment and nothing else. (That's why analysts have recently noted that part of the current Bitcoin dip is because Bitcoin is seeing competition from sports betting apps).

Btw, when Jamie Dimon says, "Bitcoin is a Ponzi scheme", he isn't saying it like it's a bad thing, he's telling his stockholders, "companies can profit billions on Ponzi schemes and we're going to get your slice of this market!" . That's why they use weaselly language like, "cryptocurrencies have captured the imaginations of millions of consumers". They are just saying, "there's a business to be had in peddling this stuff, so we're going to peddle this stuff". They don't care what it is.

[xbetz.io]

The institutional argument separates “blockchain as infrastructure” from “Bitcoin as asset.” But that separation assumes the value is in efficiency, not in neutrality. Tokenization improves existing systems. Bitcoin competes with the system itself. Those are fundamentally different value propositions. Institutions don’t need censorship resistance.
Individuals sometimes do. The ETF paradox doesn’t invalidate Bitcoin’s thesis, it just shows that markets price exposure before they price sovereignty. The real question isn’t whether tokenization grows faster. It’s whether neutrality has a long-term monetary premium and historically, neutral settlement layers tend to outlive intermediated ones.

[X-ray]

Decentralization is what separates bitcoin's blockchain to random private blockchain where everything is centralized and also one of the main selling point of bitcoin.

If they're saying blockchain is useful and bitcoin is not in a sense that they need fast database, transparency, and instant settlement. Why don't they simply deploy SQL database with public facing interface .

The main reason bitcoin is useful is because it's decentralized and miners got bitcoin as a reward for mining activities to maintain the blockchain and keep it running.

The tokenized asset won't exist without true decentralized coin to support and incentivizes the network. They are by no means replacement to true decentralized cryptocurrency.

[SquirrelJulietGarden]

1. How do you respond to the argument "blockchain is useful, Bitcoin is not"?

Bitcoin is not a first cryptocurrency but it is a first successful blockchain-based cryptocurrency and it has many technical advantages that don't exist with altcoin blockchains. Strongest network (in highest hashrate), best secure blockchain (by its highest hashrate and decentralization), best decentralization (from hashrate distribution and node distribution), and no censorship on Bitcoin block and transactions.

Blockchain is useful, but people who argue like "Blockchain is useful, Bitcoin is not" must realize a fact that without Bitcoin, people would have not seen Blockchain as useful as it is now. Bitcoin laid a solid foundation for blockchain success, usefulness and adoption so Bitcoin role in this industry is undeniable and can not be erased by any attacks.

[bitbollo]

I would be honest I don't know exactly what problem has solved bitcoin. Just maybe because this is a SOLUTION that could be applied in many cases...
The main advantage in general is to have money WITHOUT CONTROL of a central authority that can be a government or a company.
Everytime some one speak about the best way to store bitcoin... well there is just one way for bitcoiners. This has been the basis of bitcoin.

I like a definition about "assets more liquid and accessible". Tokens by itself doesn't granted it. This is granted by the nature itself of bitcoin, I would not search this property in other coins...

[makishart]

If bitcoin is not useful, there won't be any demand. Yet it's trading at $65.000, do you think all those demands consider bitcoin as not useful?
Bitcoin has gone through hundreds of tribulation and grew this far, surely it is because bitcoin has uses and the people saying bitcoin is not useful truly have no idea what they are talking about.

[sbercoin.one]

I disagree. Bitcoin solves a problem everybody has. The problem is, people do not realise that it is a problem, and the ones who do, don't realise there is an alternative.
Most times, when people talk about "What does Bitcoin offer?" or "What problem does Bitcoin solve?" they often forget to talk about a very core part of Bitcoin, and that is the fact that it is a currency.

Fair point about looking at Bitcoin as currency first. But here's my concern: how many people actually use it as currency vs hold it as speculation?

You said ETF buyers are not adoption - I agree. But they represent $120B. If the majority of Bitcoin's market cap comes from people who don't use its currency features, doesn't that make it vulnerable to tokenized alternatives that offer the same speculation + yield?

Your chain reaction argument (holders > demand > price > speculators) works as long as new money keeps flowing. What happens when tokenized assets offer a better risk/reward ratio for speculators?

Bitcoin is not a first cryptocurrency but it is a first successful blockchain-based cryptocurrency and it has many technical advantages that don't exist with altcoin blockchains. Strongest network (in highest hashrate), best secure blockchain (by its highest hashrate and decentralization), best decentralization (from hashrate distribution and node distribution), and no censorship on Bitcoin block and transactions.

I agree Bitcoin laid the foundation - that's undeniable. My question is about the future, not the past. Being first doesn't guarantee staying relevant.

The technical advantages you mention (hashrate, decentralization) matter for trustless use cases. But if 90% of capital is coming through ETFs and custodians, are those advantages actually being used?

If bitcoin is not useful, there won't be any demand. Yet it's trading at $65,000, do you think all those demands consider bitcoin as not useful? Bitcoin has gone through hundreds of tribulation and grew this far, surely it is because bitcoin has uses.

Price doesn't prove utility. NFTs traded at millions - that didn't make them useful. Demand can be speculative, not utilitarian.

My question isn't "is Bitcoin worthless?" - clearly it's not. My question is: what happens to the price when most of that demand comes from speculators (ETF buyers, traders) who don't use Bitcoin's unique features, and a better speculative vehicle appears (tokenized assets with yield)?

Bitcoin survived hundreds of tribulations - true. But it never competed against tokenized real-world assets backed by BlackRock and JPMorgan infrastructure. That's a new game.

[davis196]

1. Blockchain is useful technology. Instant settlement, transparency, programmable contracts.
2. Bitcoin was the first application of blockchain, but not the best.
3. Tokenized assets offer what Bitcoin doesn't: yield, regulatory protection, clear valuation, connection to the real economy.
4. When any asset can be purchased via blockchain — why hold a volatile token with no cash flow?

I've heard the "Bitcoin is bad, blockchain is good" argument at least a thousand times in the last 10 years. Nothing has changed...
1.If blockchain is so useful, then why most industries around the world haven't implemented blockchain technology by now?
2.I'm still waiting to see which application of the blockchain is better than Bitcoin. BTC is still by far the best application of the blockchain.
3.Nah, this is BS. Tokenized assets offer a promise for ownership.
4.This argument isn't valid because you can't purchase any asset via the blockchain, because blockchain technology still isn't massively accepted.

[Furball808]

Questions for the Community

1. How do you respond to the argument "blockchain is useful, Bitcoin is not"?

As said, bitcoin is the first use case of a blockchain. Blockchain wouldn’t be seen as useful had it not been for bitcoin’s success. If bitcoin failed, people wouldn’t look at how blockchains are being used.

2. Are ETF buyers adoption or just speculation?

It’s regulated speculation.

3. If tokenized assets offer everything Bitcoin does + yield + regulatory protection — what remains unique about Bitcoin besides trustlessness?

Regulatory protection doesn’t mean guaranteed safety immediately.

4. Is the niche of "asset for those who trust no one" large enough to support current market cap?

I believe the community is strong enough that even if we remove those who use bitcoin for only profit and doesn’t still trust it completely, bitcoin would be fine.

[satscraper]

~

I wouldn’t respond to this and would just let it fall on deaf ears.

It’s counterproductive to argue with people who believe ^{for example} that Internet is useless or that mobile phones are garbage. The same applies to Bitcoin.

For me Bitcoin is useful right now because I use it in my daily routine to cover my everyday expenses. I don’t care what might happen to it in ^say half a century.

[Alpha Marine]

Fair point about looking at Bitcoin as currency first. But here's my concern: how many people actually use it as currency vs hold it as speculation?

How the majority of the users used it doesn't matter in this context. What matters is "what gives Bitcoin its value". If nobody at all uses Bitcoin as a currency again, that doesn't take away the currency feature of Bitcoin. It is not a currency because people use it; it is a currency because it was built that way. So whether people use it or not for that purpose, it will always remain like that.

You said ETF buyers are not adoption - I agree. But they represent $120B. If the majority of Bitcoin's market cap comes from people who don't use its currency features, doesn't that make it vulnerable to tokenized alternatives that offer the same speculation + yield?

No, it does not make it vulnerable.
Once upon a time, there were people who believed that altcoins would make Bitcoin vulnerable because they were faster in transactions, had lower fees and all, but here we are today, none have come close.

ETFs representing $120B doesnt change anything. "True believers" are not the only ones allowed to have it. If it were so, then it would be very close to a cult. Anybody can own it, believer or not. It's free for all.
OpenAI has a market value of about $500B, do you think everybody who holds their shares believes in the project or company? NO. A lot of them, too, just want to make a profit. But the company doesn't filter out non-believers before you're allowed to buy their shares, and the non believers input are ot excluded when talking about the massive market value of the company.

Tokenised RWA are not a threat to Bitcoin. They will offer the same thing they were offering before they got tokenised. The only difference between a tokenised equity and a normal one is that one is a crypto that makes use of a blockchain and 24/7 trading.

And we also have to remember that Bitcoin, like any other asset or currency, is not perfect. There may be extreme situations where the share value of a company would plummet. There are projections where the value of a top currency like the dollar can nose-dive, so the same goes for Bitcoin. There are scenarios where the price of Bitcoin can fall even below $10k, but those scenarios are extreme, just like every other top asset and currency.

Your chain reaction argument (holders > demand > price > speculators) works as long as new money keeps flowing. What happens when tokenized assets offer a better risk/reward ratio for speculators?

First of all, tokenised assets do not offer a different risk/reward than the usual ones.
But even if that is the case, it's nothing new. Different assets have different risk/reward ratios, yet there are still investors in them. So it doesn't really matter that much.

[BlackHatCoiner]

My question isn't "is Bitcoin worthless?" - clearly it's not. My question is: what happens to the price when most of that demand comes from speculators (ETF buyers, traders) who don't use Bitcoin's unique features, and a better speculative vehicle appears (tokenized assets with yield)?

Most of the demand has always come from speculators, and this is not a bad thing. People buy bitcoin, because they speculate that, since it's the hardest money, its purchasing power is likely to continue going up. Just as most people buy gold, not to wear it or to put it in electronics, but to protect themselves from the inflation caused by the central banks.

Bitcoin is money. Money does not have any utility other than to be exchanged through space and time. Bitcoin is just the best money at traveling through space and time, and the market realizes it.

[Bastketsrus]

My question isn't "is Bitcoin worthless?" - clearly it's not. My question is: what happens to the price when most of that demand comes from speculators (ETF buyers, traders) who don't use Bitcoin's unique features, and a better speculative vehicle appears (tokenized assets with yield)?

Most of the demand has always come from speculators, and this is not a bad thing. People buy bitcoin, because they speculate that, since it's the hardest money, its purchasing power is likely to continue going up. Just as most people buy gold, not to wear it or to put it in electronics, but to protect themselves from the inflation caused by the central banks.

Bitcoin is money. Money does not have any utility other than to be exchanged through space and time. Bitcoin is just the best money at traveling through space and time, and the market realizes it.

Good point. Speculation has always been part of Bitcoin, and that’s not necessarily bad. Like gold, many people hold it to protect value over time, and its real strength is being money that can move freely without borders.

[legiteum]

Bitcoin is money. Money does not have any utility other than to be exchanged through space and time. Bitcoin is just the best money at traveling through space and time, and the market realizes it.

Every store of value, even a temporary one, is an investment that can either gain or lose value. This includes any sort of currency. So you can invest in US dollars, Bitcoin, stocks, land, or whatever and you'll either win or lose on that investment.

If you hold an instrument for a long period of time, then you are absolutely using it as an investment and not a utility device. A "utility" device would be one where you convert into in order to make a technical transfer for a very short period of time, e.g. trading an investment for US dollars or USDT or something in order to buy another investment with the proceeds. In other words, the instrument is just being used very temporarily for technical reasons (transfer), not to gain a profit.

Bitcoin is absolutely used, almost exclusively, as a long-term investment, not a utility because it doesn't work well for that.

[BlackHatCoiner]

Bitcoin is absolutely used, almost exclusively, as a long-term investment, not a utility because it doesn't work well for that.

As I said previously, bitcoin is money, and money does not have any utility beyond exchanging. You do not buy bitcoin to do something with it other than to exchange it for something else. Money is not a consumption good nor a capital good.

Bitcoin does provide utility, such as pseudonymous, permissionless transactions, that is not provided by other forms of money (e.g., Paypal) but that is just part of being money to my mind. No "extra" utility that comes from "consuming it" somehow, like gold.

[Swordsoffreedom]

In my opinion, those who say Blockchain works but Bitcoin is useless do not really understand the true uniqueness of Bitcoin

Blockchain technology has led to the evolution of tokenized asset, XD

Even big banks like JP Morgan are now creating token in bonds, these are fine for regulated finance.

But Bitcoin is not just any ordinary token. It has no owner & is purely decentralized, no govt can stop it and no ones permission is needed for transaction. These decentralized & censorship resistant things, they cannot be copied by any other tokenized asset. Because those tokens ultimately depend on some institution. Tokenization may increase the liquidity of ordinary assets, but Bitcoin solves the real trust problem. Its limited supply, network effect and open system make it a digital asset that you do not have to rely on a bank or regulator for

[legiteum]

But Bitcoin is not just any ordinary token. It has no owner & is purely decentralized, no govt can stop it and no ones permission is needed for transaction. These decentralized & censorship resistant things, they cannot be copied by any other tokenized asset.

No government could "stop it" anymore than governments can fully stop child porn networks despite how hard they try, but the US government could very easily make Bitcoin so hard get and dangerous to hold that the price would go back down to pennies.

Hence, while it's technically true that "Bitcoin is unstoppable", in practicality it's just as "stoppable" as any other major asset.

And while Bitcoin solves the problem of being impossible to actually kill, that's not a problem that 99.99% of consumers need solved. Most people invest in Bitcoin with an app, a broker, the ETFs, or some other mechanism that makes no use of Bitcoin's decentralization.

So yes, for Bitcoin 2010, when the price was less than a dollar a coin, all of these things are relevant. But these things became meaningless when mainstream investors drove the price into the billions.