Not Crypto, Bitcoin
Bitcoin is money. The rest of the Crypto currencies are trying to do a lot of different things. Many don't see this distinction.
I recently took a trip to Colombia.
Beautiful country by the way. Awesome landscapes, great people and culture, and amazing food. The second day I’m there, I was walking with some people I had just met, and I’m not great at Spanish, but I overheard NFTs in their conversation. Eventually we talk more and I let them know that I maybe know some things about Bitcoin and Crypto currencies.
So I’m talking with one of them for a few hours about this, basically trying to describe some of the underlying technological and economic concepts built into Bitcoin. The funny thing is, for the first hour or so of the conversation, I had to continuously re-iterate that I was talking about Bitcoin, only Bitcoin, and not the twenty thousand other crypto currencies. Not Crypto, Bitcoin. That there is a difference between putting your money into a better money for the long term, and putting your money in a project that may or may not be successful, and that’s hopefully not a scam.
For a country full of people that could benefit from Bitcoin, it’s astonishing how little knowledge there is about it and it’s easy to see how early we are.
The one ray of hope I saw, and it made me smile so hard, was when we passed by a random wall in the downtown area, and it had some graffiti on it in orange that read, “Bitcoin is freedom”.
If you’re a Bitcoiner,
your journey maybe went as follows:
You heard about Bitcoin but didn’t think much of it.
Years later you heard about it again because now it’s 100x more valuable. You maybe buy some.
You started looking at all other crypto currencies and seeing how they increase by much larger multiples than 100. Traders and YouTubers are telling you which projects are going from $0.03 to $1,000, so you buy 10 more cryptos because of this and also because diversification is key in any portfolio.
Researching other cryptos you realize how they are better than Bitcoin. Ethereum is like bitcoin, but it can run apps and games. Litecoin is like Bitcoin but it’s faster and cheaper, it’s the silver to Bitcoin’s gold. Ripple is like Bitcoin but it’s insanely faster and all banks will use it as payment rails.
Late 2017. The bull market REALLY takes off, you’re up 10x, you’re a genius.
2018. Bull market disappears. Your portfolio is down 90%.
You realize the 10 other cryptos are down 99%. But you still believe crypto is the future so you don’t sell, because you know it’s coming back.
Three years pass, while you occasionally check the prices, and do a little bit of learning on the side.
Bitcoin’s price comes back harder than ever, and while the other 10 cryptos regain some value, it’s nothing in comparison. All the while, new projects kick off and it’s a new generation for Crypto. Interoperability, De-fi, NTFs. Is it the future? For some reason you’re not as interested, even though everyone is supposedly making millions.
You realize the entire market is centered around Bitcoin’s beautiful balance of Proof-Of-Work mining, difficulty adjustments, halvings, and various other game theoretical and economic quirks that you slowly discover after researching hundreds of hours of content, and you figure out that it’s really the only truly decentralized system, that has no controller or team or fund or corporation behind it.
You sell the other cryptos, because Bitcoin is all that matters, it’s all you think about, and it’s the best form of money that’s ever existed. It really WILL change the world. It can do so much good for so many people who are oppressed or stressed by their governments role in the monetary system.
You now care more about how much Bitcoin you have, instead of it’s price.
Not everyone’s journey is the same,
but this was mine. There is so much more I can talk about, not just understanding Bitcoin, but money itself, energy, work, human evolution. I wish it didn’t take me so long, but I got there.
And this is why I understand why Bitcoin is drastically different from the rest of the Crypto space.
I’ll briefly describe some characteristics of both:
Bitcoin is built on the idea of having system in place that can represent money (the idea of being able to trade value / energy / work) in the best way possible. The system is decentralized in that there is no ONE centralized computer system that makes decisions about transactions, it’s performed equally by all computers in the network, but also that there was a creator that both stayed anonymous and also disappeared from the project. It has a finite supply, and coupled with the idea of replacing current monetary systems, means quite a lot.
This project is updated very infrequently, by countless developers from all over the world, and these updates are voted on in various ways by all actors in the system. It has very few features in comparison to other crypto currencies, and it is slow, by design. When you have a system that you want to be pure money, you prioritize simplicity, stability and security, over speed and features.
Other crypto currencies on the other hand, like Ethereum, Solana, Internet Computer, Polkadot, and others are focusing on improvements on blockchain technology and “decentralized” networks. Creating decentralized applications (dApps), or allowing for interoperability between chains. Web3. NFTs. These are nice features of a tech platform, but they are not features of pure money. Investing in them is similar to investing in Uber, or Netflix.
These projects are updated very frequently by whatever small development team or company is currently working on them. They are feature rich, and thus contain many more complexities. This gives them the ability to iterate new ideas and innovate rapidly, however this also produces orders of magnitude more bugs.
In short,
few people I talk to understand the difference of Bitcoin vs other Crypto currencies.
The people seriously interested in Bitcoin, are interested in its pure monetary, hard money, properties, the fact that it has no centralized control, and that it can free people from the damage caused by fiat money systems.
Those interested in crypto currencies in general, are interested in a multitude of other ideas. They fall into many camps, such as creating a decentralized computing system, digitizing art in the form of NFTs, the conglomeration of projects that fall under Web3 for extending the capabilities of the current web, or decentralized financial tools (DeFi).
There’s nothing wrong with these projects but, they are not improvements on Bitcoin, Bitcoin is not the Myspace of crypto, they are not trying to solve what Bitcoin is trying to solve, and that’s the ultimate difference.
Cheers!