Bitcoin is the Anchor and Focus, Every Other Coin That's Better Doesn't Really Matter
Even though the Bitcoin blockchain code can change to make it better, it currently isn't better than others. Why isn't Dash or Ethereum the most popular cryptocurrency? They are better in many ways. Why isn't Steem the most popular cryptocurrency? It's the quickest blockchain. It has the most use overall with the most transactions in a day.
Source, Source
Just because something is better, doesn't mean it will be more popular or be used more. The quantity of people using something doesn't necessarily correlate to the quality of a product or service.
Human consciousness uses heuristics to find solution, learn and discover. These are shortcuts that are practical to a certain extent, but not guaranteed to be optimal. Cognitive biases are part of heuristics.
One reason an inferior product stays ahead is because it was the first. This is part of the anchoring or focusing effect cognitive bias. Whatever comes first, makes an impression. It gets traction in our consciousness because it has the weight of being first. That weight acts like an anchor on our "ship" of consciousness or attention that fixates us to that position. Subsequent pieces of info have less weight and less impact to move our ship/conclusion to another position. The anchoring effect keeps us anchored at a certain position.
The focus of our attention keeps coming back to the anchored position, and this is how it's also the focusing effect.
If you learn about some category of knowledge, like the best car, and you receive information about the best car being a certain model or make, then that will stick with you. Even after other information comes in that says another model or make is better in certain ways, the first one will be preferred because it is the first you learned about. Similarity, when we barter on a price we always revolve around the first price mentioned because that's the anchor that has been set.
Bitcoin was the first cryptocurrency blockchain technology. It's the anchor and focus. It's the de facto standard for cryptocurrency use. It has traction. It has popularity. It has the weight of being first and being the most used by the majority of people who get into cryptocurrency. It has a large quantity of people using and for a longer period of time. These are biases as well.
Bitcoin may not be the best coin out there right now, but it was the first. For that reason alone, it will continue to be the default cryptocurrency that the mainstream will look at, talk about, and influence others about. Bitcoin may stay where it is. Changes can be made to make it better and keep it's position as the king of crypto.
Steem might be better, and have more use in terms of a blockchain. But it wasn't the first. Maybe it will become the king of crypto some day, and maybe it won't.
Thank you for your time and attention. Peace.
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When Plasma/Sharding/POS and other things happen on Ethereum it is going to be a lot more obvious that Ethereum is going to take over. ETH already has more tx than bitcoin per day and cheaper fees. In terms of more popular, ETH has more TX per day but isn't used by as many people/businesses just yet(and the market cap isn't higher than BTC).
Bitcoin doesn't have smart contracts because the people who took over Bitcoin disabled OP codes that used to allow them. Vitalik was going to develop Ethereum on the Bitcoin network but didn't because he knew it was too centralized in control of the devs and they could just turn it off.
Tons of people play video games like Wow/Runescape/CS:GO/PubG and are willing to pay real life money for skins/content/gold/whatever, ETH allows them to do that and there are a lot of games coming out that will have that built in.
Wax tokens, HeroTokens(Play), Novatokens, and many other betting/gaming tokens are going to be worth a lot in the future(especially if the game they are for does really well).
Though later the decentralized world will switch from Tether(centralized money printing machine) to Make DAI(provably decentralized and money only created when someone puts ETH up to back it). DAI will then be used to raise funds for ICOs instead of all these shit coin ICOs(vitalik talks about that a lot now).
There is an interesting podcast I was listening to awhile back stating that only 5% to 10% of someones peer group/group of people they know/follow online needs to like something for them to take an interest in it and maybe change their mind. Kind of the "early adopter" mechanism where people who are more open to change will use the newest tech/newest thing first and the rest follow. ETH was something a lot of my peer group has changed its mind on due to the evidence
Only a matter of time!
NIce, you know a lot more about ETH and the potential future than me. I knew people spend money from reality into fake unreality games, but didn't know ETH was being used.
Yeah, adoption only requires a critical mass of people to spread the influence and increase adoption to the masses.
What do you mean someone putting up money to back up and create the new money? Currently it's the chain or miners that create it, but you are saying it will be user currency backed instead? Can you elaborate on how that works? Thanks.
You would need to check out the White Paper for Maker DAO as it has a lot of complexity to it to briefly explain it. https://makerdao.com/
Ethereum has a lot of stuff going on like 0x exchange that allow anyone to trade anything, for any amount, to anyone. You could trade an item from one game for an item in a completely different game for example, or trade ETH for an in game item(for now it has to be ERC20, ERC720, ERC721 on the ETH chain). All free and done via smart contracts through a decentralized system. Places like 0x https://www.0xproject.com/portal They are the step forward for having completely decentralized exchanges on everything, and no fees.
Well said. First does not mean better but only in a better position to traction or to be remembered. We often remember our first love. He or she may not have been the best but it left a lasting impression. So to Bitcoin which is pale in comparison to other cryptos. Those that are the starting point get the head start if they grab on to it. Thanks for the perspective @krnel
Yeah, get in early, and make dough. Those that come later and aren't the first won't get the same opportunity ;)
The most profitable and less financially risky way to enter the cryptocurrency market is to buy mining equipment mining Bitcoin in part because Bitcoin affects the price of all other cryptocurrencies but also because it's the biggest market. The above statement is only true for people who are able to put their hands on some ASICS and they have a big enough budget to mine in a place where the electricity is the cheapest. This is one of the advantages of Bitcoin. This is something most people haven't seemed to have grasped.
That being said there are some risks involved in mining Bitcoin that don't exist when solely holding Bitcoin.
Yeha, I'm not saying people should buy bitcoin... heh.
Bitcoin is losing tremendous market share though. Down to 33% just a few months back from 85% a year earlier. I think as these other more advanced protocols launch the focus and price out performance will only accelerate with certain alt coins. EOS for example is already outperforming BTC by orders of magnitudes since inception. Even greatly out performing ETH. I expect a "flippening" like situation to occur this year over Core Bitcoin as the other protocols are moving at lightening speeds and user adoption over BTC. As a early Bitcoin investor 2013, I now hold very little of it and its been a wiser decision thus far to be in far superior protocols that are out performing. By next year those top 20 coins will look totally different than now. A lot of people going to be shocked they counted on Bitcoin for all there gains.
Interesting. So you have moved into other cryptos with your BTC buying them?
Mmhmm. Cool post.
And some people might say "MySpace got replaced by Facebook tho", but the difference is MySpace and Facebook are centralized companies and one may happen to be managed better than the other. (Part of Bitcoin's network effect is it will attract the best coders. There isn't a possibility of like, the CEO says something that people don't like and they leave.)
And there also are less variables, like between Facebook and MySpace you don't know if the background should be blue if music should play what info should be listed on profiles. There's a ton of guesswork and room for improvement, whereas with bitcoin it's basically just the mathematical property of how to pass info back and forth without 3rd party oversight, and there isn't really a meaningful way to improve on it. Tinkering around with supply size and things like that is just cosmetic, and wouldn't be enough to overcome the network effect (whereas Facebook's design and user experience can be meaningfully better than the alternative).
Above my paygrade, but it's my understanding that Bitcoin's simplicity relative to something like Ethereum makes it more secure.
So I don't really even see other coins as "better", just different and maybe trying to fulfill a more niche purpose. Like, I think Bitcoin not trying to enable smart contracts and etc etc is a good thing, and we actually want it to be crisp and simple.
Hmm, it being more simple making it more secure? That might have some weight... hehe. But why does something being more simple make it more secure, if the complex thing is just as secure?
I'm not sure. Andreas says it so it has to be true, right? 😛
I like that talk, if you're interested. He analogs Bitcoin and Ethereum to a shark and a lion, each king's of their respective domain, no "better" or worse in general.
And one thing he mentions (if I recall correctly) is that a tradeoff to Ethereum being designed as it is is that it won't be as secure.
I think it's always like a range of likelihood, right? Like we don't know absolutely 100% that Bitcoin is secure. We just know it hasn't been broken yet, and it approaches 100% the longer it goes. So it could be like it's just harder to put confidence in the idea that Ethereum is secure... so if it's like 99.99% vs 99.31%, the 99.99% seems substantially better and where the money should go, even if the other one is most likely not critically flawed.
the bitcoin is like a "sun", the whole system revolves around it ... if the bitcoin falls into an abyss the entire cryptographic currency does the same thing ... this system should not be like that, each cryptographic currency must be independent of bitcoin if the bitcoin goes down, it will not affect the other currencies, but unfortunately it is not like that ... the whole system, as I said at the beginning, revolves around bitcoin.
how do you say !! all is because bitcoin was the first crypto currency that came out to the market and is the most popular and the most commercialized.
Yeah, but it's a crypto market, so it's one market and they are all linked, even if another one becomes the king :/
you're right friend ... I did not know that you were in the top 10 of the highest reputations see this post ..
https://steemit.com/abuse/@flagawhale/haejin-s-reputation-without-ranchorelaxo-self-votes
Yup, I was #5 or so before I eventually quit for a bit after getting flagged by abusive whale power in March 2017.
I am glad you are bringing this up. As one newer to crypto, I have thought it insane how much value is placed into Bitcoin as opposed to some of the other blockchains. I suspect that despite being the oldest chain, it will slowly erode as more like myself come to crypto.
I know I have never purchased Bitcoin, and don't see myself doing so. It is to slow and the costs prohibitive as even an entrance coin to use. I have to imagine this will grow as many like myself choose not to pay more and wait longer for the same end result.
Yeah, getting into crypto, you want to try to get a good deal, and buy something cheaper that has potential to go up. Bitcoin is just so expensive :/
I see what you did there, lol.
I will admit I am a noob to crypto. Economics and price manipulation not so much. I can remember when the bull bubble was taking place, everywhere I went online the shills/overexcited people who were now rich were everywhere. Enough that finally, despite my skepticism, I began looking into Bitcoin.
My findings were that not one thing had changed about the blockchain that justified its jumping from 2k to almost 20k. Nothing. So that left one possibility. Price manipulation by some very wealthy folks. My guess is that if one were able to uncover the truth, the money being pumped in was probably bankers and their associates.
I believe the bear market we are witnessing now was caused primarily from their withdrawal of money back out of Bitcoin/alts, and many people that bought into the hype and false bull run are currently trapped with coins/tokens that are not, and never were worth the money they paid. These people will now clamor for regulations and oversight, while those who pulled off this massive pump and dump laugh.
Ironically, it was Steemit that convinced me to enter the crypto world, as I accidentally stumbled across videos of it in my Bitcoin research. It at least had a practical application that a common person like myself could see. I began briefly position trading. It started off day trading, but I got stuck in coins sometimes for a week, only to get out and watch the coins/tokens go much higher. I missed out on some profits due to my impatience.
Amidst all of this, I read many whitepapers while position trading and one of them really caught me up, so am a Hodler now. But the rub to all of this, is how does one evaluate the real value of any of these? It really is like any other auction (which I am an expert on). They are only worth what someone right here, right now will give you. So I see the possibility of the entire crypto market collapsing. Which will not hurt me like many, as I only spent a small amount (and will continue doing) that I can live with never seeing again.
Even Vitalik Buterin stated not to long ago that everything could go to 0. These are not securities like anyone has ever seen, and at this point it is all speculation and second by second agreements that can be influenced at any time by people with large wallets. Especially for those who create money out of thin air, like bankers.
I keep reading that Bitcoin is a store of value, the premier store of value. Where I still struggle with this idea is that unlike a physical item, it has no practical use for the common person. Most places that one would purchase/barter at it is not welcome. Banks are well known for closing your account if you transfer any degree of money made from crypto to your account. And the more valuable it may become in the future will likely make it even more impractical as a method of common small transactions, especially given the time/cost factor involved.
Sorry for writing a book on this. Sometimes I do this for several reasons. It invites insights others like yourself may have on my current perspectives and also allows me to put all of my beliefs down in one place. When I do that sometimes if there is a hole in my reasoning it is more readily visible than letting them rumble around dissociated in my head.
Yeah it's all a game hehe, speculation for sure. Rich are in it and they mess around as they see fit. It could all go to zero, Steem included... a risk we opt in or out of ... hehe.
Absolutely right... Before I knew anything about cryptos, I knew that BTC was there. It's the benchmark by which all coins are judged. When you look on Coinmarketcap or any of the others... as BTC goes, for the most part, so do the others.
As the one rises or falls, it makes all others move ;)
It will only take time, other coin may surpass bitcoin. Starting the race at the front doesn't guarantee one ending like that. Someone might come from behind to overtake. Steem has that future to do that.
Yup, it can take time for sure. But for now, it's early, and it will likely keep the momentum because it was first. As the race goes on, some will pass ahead ;)
I agree.
Bitcoin will probably become so expensive and such the "gold" standard that it will be used to settle debts between countries.
So, its defacto standard will become even more entrenched, even as less people use it.
Also, its slow time will probably be seen as something more stable.
THE thing to go to when you absolutely, positively want it to be their overnight... i mean, reliably get there.
Yeah that makes sense, stable because its expensive and limited supply, I can see that happening ;)