Is Bitcoin an Amazon or a Myspace? - Comparison and Prediction

Like most people, Bitcoin was my first cryptocurrency. I started buying it in September 2017 and shortly after that I bought some Ethereum and Litecoin. By November, my initial investment had doubled. I’ve traded stocks since I was old enough to open a brokerage account and I had never seen anything jump so fast.

I spent the next two months learning as much as I could about Bitcoin and Blockchain. I read white papers, took notes, and watched Youtube videos. I even bought an 8 GPU altcoin miner on Ebay and started mining. The more I learned the more I invested because I realized how revolutionary this blockcoin technology would really be.

I listened to claims and arguments on both sides. From “It’s a bubble” to “Bitcoin will hit $1 Million or I will eat my own dick.” I started to hold the opinion that yes, crypto is in a bubble, but so was the internet in 1999. If you invested $1,000 in Amazon at the height of the dot com bubble, you’d have…drum roll… about $12,000. That really doesn’t sound like much for a 20 year investment when you compare it to crypto and people make those returns in 20 weeks. But if this were a bubble, at least there would be an eventual upside.

Now the real question is, if crypto is the new dot com bubble, what coin will be the next Amazon? Is it Bitcoin? I think not, but more on that later. Let’s go back to using Amazon as an example though; on December 10, 1999 Amazon closed at $106.69 and fell like a rock from there. In 2001, you could buy Amazon shares for less than $6. That would be like buying BTC for $1,100 in 2019. Seems impossible, but these things do happen. It then took Amazon around 9 years and 10 months to get back to it’s dot com bubble high. That’s a whole freakin decade! If you had bought $1,000 of AMZN at it’s post bubble low, you’d have around $212,000. Now that’s more like it!

Ok, before I go any further I want to point out the fact that I know cryptocurrencies are not the same as stocks and or companies and cannot be valued in the same way. However, I do think there is a strong parallel between a technology that lets you buy just about anything online (and do many other things) without going to a store, and a technology that allows you to buy just about anything online (and do many other things) without having a bank account.

Now, let’s compare Bitcoin to Myspace. Myspace started the social media revolution and had the clear advantage of mass adoption early on. When I was in high school (‘03-’08) every one of my friends had a Myspace and we all communicated with each other on there. It was the first time any of us had been able to post selfies, leave comments, add friends, and talk to the girls we were too shy to approach at school. If you had asked me back then, I would have told you Myspace was here to stay. A couple years later, Facebook was already a thing. At first, I didn’t see the point in switching to Facebook. All my friends still had Myspace, and only a few had FB. From what I could tell, they basically did the same thing. By 2010, all my friends had switched over to Facebook. It didn’t even seem like a conscious choice. It just naturally happened. Why? I Googled it. According to several articles from Forbes, Investopedia, and others, it all came down to a few things: adaptability and multi-functionality.

The brilliance of Mark Zuckerberg was his willingness to allow Facebook to go wherever the market wanted it. Farmville and other social games - why not? Different ways to find potential friends - go for it. The founders kept pushing the technology to do anything users wanted. If you have an idea for networking on something, Facebook pushed its tech folks to make it happen. And they kept listening. And looking within the comments for what would be the next application - the next promotion - the next revision that would lead to more uses, more users and more growth.
-Forbes

What blockchain project is behaving like Facebook did ten years ago? Is it Bitcoin? After a couple hard forks, a failed Segwit2x, $20+ transaction fees, long wait times, etc, I think it’s becoming clear that Bitcoin is dead in the water. I’m confident that in ten years from now, blockchain will be as integral to modern life as the internet is today. It pains me to say this, but I think Bitcoin will be obsolete by then. For something to be a store of value, there needs to be no close or better substitutes. There are many Bitcoin copycats, and some of them are better. Another requirement for something to be a store of value is that there needs to be a universal consensus on the fact that it is valuable. Gold worked for thousands of years, and still works today, because it is one of the most rare and dense metals on earth. Since the earliest kingdoms in history, gold has been a universal store of value. Do you really think Bitcoin is going to change that when there are so many better alternatives? Brand name doesn’t matter when it comes to emerging technologies! When’s the last time you heard “You got mail!” or flown on a Wright Brothers jet, or carried a Motorola cell phone?

I totally accept the fact that I could be wrong about this. I’ve been wrong plenty of times before. I would love for you to convince me that BTC will hit $1 Million. I’m open to any logical arguments.

Thanks for reading!