Bitcoin is still early

[NapoleanDynamite]

understand most if not all of these other “cryptocurrencies” are just securities masquearading as “digital tokens” instead of traditional stocks that one would invest in a company.

they are “tokens” that are created by known persons, premined and sold to a closed pool of initial investors including lots of VC types, hyped and then offered to retail at a higher price which pumps the market cap and the bags of the initial investors.

they are entities centralized to some variable degree between moderately and entirely. most if not all of them could be “turned off” in the right circumstances. by some gov action. by arrest of death of the head honcho. because AWS went down. whatever

for instance you can go watch youtube videos of vitalik shilling eth to early investors the same way an owner would present to VC selling equity in a company pre IPO. eth had something like a 70% pre mine

you can go listen to sec head gensler making the point

some of them are just straight up scams

people are free of course to invest in what they wish but understand these alt coins are basically just analogous to investing in individual stocks.


that is not bitcoin. bitcoin is much more analogous to gold. it is hard money with a fixed supply and a tie to the physical world because of the proof of work protocol. it has reached escape velocity to where it can’t be “turned off”. there is no figurehead to put in jail. china bans mining and so the miners move to more friendly jurisdictions.

Someone has been studying since May of 2020! This is all spot on. Kudos Ma'am/Sir!

[chucki]

Somebody asked earlier (and this may not be my first time saying this, so I apologize if that's the case) how BTC is different than other cryptocurrenceis and how it could be the winner so I will attempt to answer that.

BTC has 2 unique characteristics:
1) Decentralization
2) Enforceable fixed supply (aka digital scarcity)

These concepts is what makes it hard money and akin to gold, real estate, etc. No other cryptocurrency can claim this. ETH has a Foundation -- a group of people that control the rules, and is not decentralized. If the government came to them and tells them to shut off ETH, it probably could be done. You can't do that with bitcion, there is no head of the snake. Also, ETH has an unknown supply and is subject to inflation and changes (as happened recently). There will only be 21M BTC. So I see ETH more like a high-end tech company that has excellent use cases, but not that of hard money.

BTC is more like the index fund (as alluded to many times in this thread) and has an established use case and trajectory. ETH and other cryptos are more like tech stocks and battling it out for supremacy. Therefore, they may have more upside but also come with a lot more inherent risk. So it really depends if you are an index fund person or like individual stocks. ETH could be displaced by Solana or something that hasn't been invented yet. Also, much of the functionality of ETH and other cryptos is being built on 2nd and 3rd layers of BTC -- some BTC maximalists envision it being a winner-take-all scenario. I think it's way too early in the game to determine that, but I see BTC as extremely safe and the others risky but with upside. It really depends on how you want to allocate your portfolio.

If anybody is truly interested in learning about BTC, I would advise them to do a deep dive on the 2 qualities of BTC that I mentioned to see why some of us are truly down the rabbit hole.

[tomato14]

Also, much of the functionality of ETH and other cryptos is being built on 2nd and 3rd layers of BTC

can you explain this further?

[xraygoggles]

Somebody asked earlier (and this may not be my first time saying this, so I apologize if that's the case) how BTC is different than other cryptocurrenceis and how it could be the winner so I will attempt to answer that.

BTC has 2 unique characteristics:
1) Decentralization
2) Enforceable fixed supply (aka digital scarcity)

These concepts is what makes it hard money and akin to gold, real estate, etc. No other cryptocurrency can claim this. ETH has a Foundation -- a group of people that control the rules, and is not decentralized. If the government came to them and tells them to shut off ETH, it probably could be done. You can't do that with bitcion, there is no head of the snake. Also, ETH has an unknown supply and is subject to inflation and changes (as happened recently). There will only be 21M BTC. So I see ETH more like a high-end tech company that has excellent use cases, but not that of hard money.

BTC is more like the index fund (as alluded to many times in this thread) and has an established use case and trajectory. ETH and other cryptos are more like tech stocks and battling it out for supremacy. Therefore, they may have more upside but also come with a lot more inherent risk. So it really depends if you are an index fund person or like individual stocks. ETH could be displaced by Solana or something that hasn't been invented yet. Also, much of the functionality of ETH and other cryptos is being built on 2nd and 3rd layers of BTC -- some BTC maximalists envision it being a winner-take-all scenario. I think it's way too early in the game to determine that, but I see BTC as extremely safe and the others risky but with upside. It really depends on how you want to allocate your portfolio.

If anybody is truly interested in learning about BTC, I would advise them to do a deep dive on the 2 qualities of BTC that I mentioned to see why some of us are truly down the rabbit hole.

I don't get when people say ETH was premined, or that it's more centralized than BTC - both true things. But how does one go from that to saying it's useless? Ether is not hard money like BTC is - it's the "internet of crypto" as alluded to in the post I linked above.

There are two different uses for each: BTC as sound money; ETH as programmable money.

You're right that it could be replaced, but the same network effects which make BTC dominant also apply for ETH - Solana, Fantom, Cardano et al all have potential, and will likely take up some market share from ETH, but are nowhere equal in any other respect, in terms of venture capital interest, amount of innovation, number of novel projects, institutional interest, etc.... that would be akin to saying BTC Cash or Litecoin or Dogecoin will replace BTC, just because they have similar use-cases: not remotely plausible. Ditto ETH.

[NapoleanDynamite]

Somebody asked earlier (and this may not be my first time saying this, so I apologize if that's the case) how BTC is different than other cryptocurrenceis and how it could be the winner so I will attempt to answer that.

BTC has 2 unique characteristics:
1) Decentralization
2) Enforceable fixed supply (aka digital scarcity)

These concepts is what makes it hard money and akin to gold, real estate, etc. No other cryptocurrency can claim this. ETH has a Foundation -- a group of people that control the rules, and is not decentralized. If the government came to them and tells them to shut off ETH, it probably could be done. You can't do that with bitcion, there is no head of the snake. Also, ETH has an unknown supply and is subject to inflation and changes (as happened recently). There will only be 21M BTC. So I see ETH more like a high-end tech company that has excellent use cases, but not that of hard money.

BTC is more like the index fund (as alluded to many times in this thread) and has an established use case and trajectory. ETH and other cryptos are more like tech stocks and battling it out for supremacy. Therefore, they may have more upside but also come with a lot more inherent risk. So it really depends if you are an index fund person or like individual stocks. ETH could be displaced by Solana or something that hasn't been invented yet. Also, much of the functionality of ETH and other cryptos is being built on 2nd and 3rd layers of BTC -- some BTC maximalists envision it being a winner-take-all scenario. I think it's way too early in the game to determine that, but I see BTC as extremely safe and the others risky but with upside. It really depends on how you want to allocate your portfolio.

If anybody is truly interested in learning about BTC, I would advise them to do a deep dive on the 2 qualities of BTC that I mentioned to see why some of us are truly down the rabbit hole.

This is another great take. Thanks Chucki.

To answer Tomato 14's question....There are other layers being built on Bitcoin. The most developed to date is the Lightning Network. It does not use the main chain of Bitcoin which is slower, more expensive and could not process enough transactions to act as a money. However it sacrifices in certain areas to do this most notably centralization and trust (although this is debatable). Every transaction is still backed fully bitcoin, but it is off the main chain. El Salvador is using the Lightning Network to process transactions like Starbucks Coffee, Burger King, and Walmart.

[Brains428]

An aside- I commend the WCI, mods and participants for keeping this thread going. It's been civil (mostly) and hopefully informative to many.

[NapoleanDynamite]

I don't get when people say ETH was premined, or that it's more centralized than BTC - both true things. But how does one go from that to saying it's useless? Ether is not hard money like BTC is - it's the "internet of crypto" as alluded to in the post I linked above.

There are two different uses for each: BTC as sound money; ETH as programmable money.

You're right that it could be replaced, but the same network effects which make BTC dominant also apply for ETH - Solana, Fantom, Cardano et al all have potential, and will likely take up some market share from ETH, but are nowhere equal in any other respect, in terms of venture capital interest, amount of innovation, number of novel projects, institutional interest, etc.... that would be akin to saying BTC Cash or Litecoin or Dogecoin will replace BTC, just because they have similar use-cases: not remotely plausible. Ditto ETH.

X-ray...
I read your links above. There are a lot of inaccuracies in the papers. A lot of good info too, but significant misinformation. ETH has huge amounts of VC $ backing it and I suspect it will survive and thrive. But there are some very significant critiques. For this I have stayed away from it for the time.

If you have a day or two, I suggest you read through this paper and try to digest it all. Some very interesting things are happening in "crypto" that will have significant impacts on the sector as a whole. Even if these were not Vitalik's intentions with ETH...this is where it is at. The authors are open to critiques if you have the technical skill understanding to offer them.

https://www.uncerto.com/only-the-strong-survive

[jacoavlu]

I don't get when people say ETH was premined, or that it's more centralized than BTC - both true things. But how does one go from that to saying it's useless?

where did someone say it’s useless?

[chrisCD]

Based on the quote at the bottom of your post, I thought you might like this book. I have read it and it is decent. Not my favorite Bitcoin reading, but a very good book and perspective. Could have been better written IMO.
https://www.amazon.com/Thank-God-Bit.../dp/1641991216

As for "if you have already won then stop playing the game"....Very true.

I'm not as confident as you seem to be in the "won" part. Guess I'm not as confident in the almighty dollar...or maybe I'm just not nearly as wealthy as you. Congrats if that's the case! Either way, there is a non-zero chance you are wrong about the thought that you have already won, just like there is a non-zero chance that I am wrong and Bitcoin goes to zero. I like to hedge my risk.

Not wealthy, yet. Just confident in my plan.

Commenting on some others thoughts: I still think it is a big stretch to basically say BTC is similar to an ETF. ETFs (the broad based ones), invest in company stocks. They invest in all of them that match the index's criteria. They aren't picking winners and losers. Those stocks have assets, products, employees, etc behind them. Investing in a company, I still think is a lot different than investing in a digital currency, a single one at that. Creating your own basket of all of them, would be akin to an ETF. But putting all of your funds in one, is hoping that one is the winner and remains so. I think that is a big bet. A small potion of someone's portfolio, not a super, big deal. A large portion, could be disastrous, but thankfully I don't think anyone here is actually pushing that.

cd :O)

[jacoavlu]

^^^ agree

[NapoleanDynamite]

Not wealthy, yet. Just confident in my plan.

Commenting on some others thoughts: I still think it is a big stretch to basically say BTC is similar to an ETF. ETFs (the broad based ones), invest in company stocks. They invest in all of them that match the index's criteria. They aren't picking winners and losers. Those stocks have assets, products, employees, etc behind them. Investing in a company, I still think is a lot different than investing in a digital currency, a single one at that. Creating your own basket of all of them, would be akin to an ETF. But putting all of your funds in one, is hoping that one is the winner and remains so. I think that is a big bet. A small potion of someone's portfolio, not a super, big deal. A large portion, could be disastrous, but thankfully I don't think anyone here is actually pushing that.

cd :O)

To clarify, I don't think of BTC like an ETF. That was Chucki. I was agreeing with the other descriptions, and I think he was using ETF as an example of lower risk than picking individual stocks and suggesting BTC is lower long term risk than picking any other individual crypto. If I understood him correctly, then I would somewhat agree with that metaphor. But no, BTC is nothing like an ETF of all cryptos.

[chucki]

I actually used the analogy of BTC being like an index fund, and ETH/cryptos being akin to individual (tech) stocks. I don't consider an index fund and an ETF to be the same although there are similarities.

At xraygoggles, where did I say ETH is useless? In fact, I said quite the opposite -- just that it is higher risk/reward than BTC.

Napolean did a good job of answering the 2nd/3rd layers. It is important to note that there is Bitcoin the asset and bitcoin the monetary network. The asset is what we like to talk about here with the price of $57K, CAGR of 150-200%, etc -- it gets all the headlines. Bitcoin the monetary network is what is secured by miners and energy. The main chain is more of a final settlement layer, ideally used for larger transactions because of its small block size, slower speed and higher network fees.

The bitcoin Lightning network is a layer on top of it, which makes use of establishing private peer to peer channels that transact at extremely low fees and are instantaneous. So using the Strike app, you could send $5 from your Manhattan apartment to your uncle in El Salvador. $5 dollars will be converted by the app into $5 of btc and sent across the network and into your uncle's account, which will then convert the $5 of btc back into $5 of USD. The transaction will be instant and cost almost nothing. Your account will be debited $5 and your uncle will get $4.99 or something like that. Neither you nor your uncle have to use bitcoin or may even know that the bitcoin monetary network was used for this transaction. Of course you can send btc to btc if you like. Twitter recently implemented Strike's API, and you can make similar payments on your Twitter account (check it out -- I think most iOS have it available now). This is going to disrupt cross border payment/remittance companies -- many of which engage in usury, such as Western Union (I wouldn't want to be them).

[Zaphod]

While btc is the coke of crypto currency, why are people pretending its impossible to make a different chain or ones dont currently exist that are also fixed in supply? None of these are truths or impossibilities, its just listing a feature, like your car has a turbo and mine doesnt. So what?

That isnt what makes btc btc. digital gold, yes, pow yes, all things replicable. Not that I think it will, btc was first and probably will remain the standard for a long time, maybe quite a long time.

But given these are all programmable, none of the features making it it, are unique or non implementable in newer coins.

[blippi]

there’s no patent on what it does, correct?

[NapoleanDynamite]

To clarify, I don't think of BTC like an ETF. That was Chucki. I was agreeing with the other descriptions, and I think he was using ETF as an example of lower risk than picking individual stocks and suggesting BTC is lower long term risk than picking any other individual crypto. If I understood him correctly, then I would somewhat agree with that metaphor. But no, BTC is nothing like an ETF of all cryptos.

Well this didn't hold up well....Maybe BTC is an ETF.

https://www.cnbc.com/2021/10/15/bitcoin-etfs-may-finally-make-their-debut-sort-of.html