RE: Bitcoin Dives! Why I Remain Bullish + Tron Rant
What if BTC might not get back its market dominance? What if the swing cycle bitcoin – altcoins will not repeat any more? Is this possible?
Yahoo used once to totally dominate internet search market. Sergey Brin and Larry Page had offered to sell Google with it's new search algorithms at 5mln$, correct me if I'm wrong with this number. Where is Yahoo now? There are a lot of examples when once totally dominating company lost its position or even went bankrupt. Why this happens? A) The company fails to evolve and improve as per needs of its customers. B) A superior technology or more effective strategy of a competitor.
The main problem of BTC is not slow transactions, high fees or whatever technical flaw there might be. It can be fixed. The problem is difficulty to reach a consensus to improve the tech. All the separate BTC mining pools might be shortsighted in pursuit of today’s profits. They might lack a strategic vision which their rivals do possess. We see quite intensive boiling in the BTC camp. One example is Bitcoin – Bitcoin Cash discussion. This doesn’t add any competitive advantage to BTC.
If other platform will prove to perform better and deliver a better solution for crypto currency, BTC might lose its crown. The significat advantages I see now in BTC are as follows: brand recognition and market share. That’s it.
Being first on a new market is a big deal indeed, but a company must not just passively enjoy it’s market dominance. It’s not forever. We all know prominent BTC advocates who actually do a pretty good job convincing the public that there is only BTC, that it will better than gold and in several years it will cost a billion $. Many people bought this story.
I don’t believe a narrative about $500K or $1 mln per BTC just because it’s # 1 brand, because it’s not inflationary, rare and hard to mine. The whole mining scheme is already obsolete. It’s not necessary at all to spend such enormous amount of energy to provide high level of network security. Proof-of-stake protocol will dominate in crypto in the future. It’s pretty much the same thing as Proof-of-Stake but without wasting of energy. In P-o-W investment is made in hardware in P-o-S investment is made in coins. Both protocols share the same idea that the bigger is your investment (stake) the bigger share in coin harvesting and voting power.
Bankers and institutional investors should prefer to be the trendsetter rather than to go where the crowd leads. They would prefer to invest in a platform from scratch and make it dominant. They have all the fiat money for this. In this case they will benefit much more than just diving into BTC which is currently «ruled» by several Chinese mining cartels.
There is another problem related to BTC growth. New investors know how cheap BTC used to be and they might tend to believe that they are late for BTC and must find other «cheap» coins which have a room to grow to the sky.
The difficulty to realize consensus is the result of being decentralized. I've finished an article now that addresses this and it will result in Bitcoin struggling for the next 2 decades or so likely, but keep in mind that Bitcoin really isn't going to be superior to what exists out there already today. Do you know how many millions of hours Visa, Mastercard, Paypal, Square, and all the banks have put into the existing infrastructure today? Do you know how many more millions of hours they will put in if they feel even REMOTELY threatened? They crush all cryptocurrencies in terms of capital, resources and influence. The ONLY real advantage that cryptocurrencies have is that they are:
You get the point. For the record, open-source development is generally going to be slower due to disagreements over how to proceed. The vision of Bitcoin is that it isn't any single person's vision. I also discuss in my upcoming article that Proof of Work is undoubtedly a problem, but Proof of Stake isn't perfect either. You can combine the two and there are obviously many other consensus algorithms, but here is one area where I think Bitcoin might be screwed as a change to existing consensus algorithm would destroy over a billion dollars worth of mining equipment so... That would DEFINITELY require a user activated fork. User activated forks is Bitcoin's defense against miner dominance.
There is no guarantee that Bitcoin regains its dominance, but altcoins have so many issues right now that it is very likely. Many of them don't have products, some don't even have prototypes and a lot of them are copies of Bitcoin's code with some modifications. These copies of Bitcoin will face issues as well if they ever hit scale and obviously Bitcoin could make these changes too given it's the same code with different inputs. Will it happen? That's a worthwhile question, but it's too soon yet to be certain. I think we are taking a "wait and see" approach.
"The vision of Bitcoin is that it isn't any single person's vision" - that is the real problem with Bitcoin, which is why we have so many forks. Open-source development can be sometimes faster given there is a strong, and intelligent leadership that encourages innovation and cares about users. Forks do happen in open-source software development, but not that many. Linux is innovative and fast moving, it has been only growing in popularity and there is only a single popular fork - Android.
Bitcoin is a joke compared to the alternatives. The sooner its end comes the better for this industry
BetaMax was far better than VHS. It's about adoption, not about the better tech. How are you going to convince people that a $14 coin is better than a $14,000 coin? So things like the lightning network are created.
”It’s pretty much the same thing as Proof-of-Stake”...or Proof-of-Work!?