Is Bitcoin the next MySpace?

Back in the mid-2000's, the early days of Web 2.0, social media was an exciting new frontier on the internet. No longer merely serving as an on-ramp to information, the web was maturing, becoming a ubiquitous connection to our everyday lives.

MySpace was an early sign of this tremendous growth in social connectivity on the web.

At one point, MySpace was gathering more than 50 000 new users every day - an astronomical rise in popularity at the time. A new way to share about daily goings-on was available to the masses.

But there was competition. Facebook was easier to use, with a slicker interface. Friends began to dismiss Myspace and invite others to join them on Facebook instead. Soon, the network effect reached a critical mass and Facebook became the new king of social media, gathering massive ad revenues once destined for Myspace corporation owners and investors.

For an interesting read on the rise and fall of MySpace, have a look at https://www.ft.com/content/fd9ffd9c-dee5-11de-adff-00144feab49a.

There are some parallels in the world of cryptocurrency. Bitcoin is the long-known, established standard of the crypto market. It has grown tremendously quickly in popularity, reaching adoption by a continuously broader group of buyers. It is the brand of cryptocurrency - the one coin most people know about, whether or not they understand cryptocurrency at all. Other coins vie for attention in the shadow of Bitcoin.

Some of these competitors truly do have serious potential. Do they have enough potential to unseat Bitcoin from the throne? It's hard to say, but it's obvious to anyone who has both used Bitcoin and say, Litecoin, or Ethereum, that there are numerous advantages to some altcoins. Transaction speed and cost is probably the number one advantage of these altcoins, and it is a troubling issue for Bitcoin.

There is a key difference between Myspace and Bitcoin. Myspace was run in a centralized world by a few owners who were blinded to competition - enamored with their own property so much as to ignore the warning signs. Bitcoin is decentralized and its developers are fully aware of the competition. In fact, Bitcoin continues to be at the forefront of development with new innovations such as the Lightning Network, Rootstock, and SegWit (not the 2X one!). Bitcoin will need to continue its rapid development to remain ahead of the competition.

As a crypto-investor, some will choose to invest exclusively in Bitcoin, trusting it will remain the industry leader. I advise some degree of diversification. After all, you never know what might happen, particularly if you project 5, 10, or 20 years into the future. Bitcoin may remain the standard, but it will likely control less and less of the entire crypto market as the market gains liquidity as a whole.

It appears that Bitcoin is likely not destined for the dustbin of past innovations, but it will need to constantly strive to improve to stay ahead of its opponents in order to avoid its demise.

*This is not professional trading advice. Only spend what you can afford to lose!

all sources:
https://www.ft.com/content/fd9ffd9c-dee5-11de-adff-00144feab49a
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