BITCOIN IS NOT CRYPTO

Bitcoin is the best digital monetary system due to its rock-solid core properties, its fairness to all participants and – crucially – because it eliminates trust. 

Despite publicly being declared dead hundreds of times every year since its birth, Bitcoin is now the world’s most secure large computer network with millions of users worldwide. Robust in design, it continues to grow, with the Lindy Effect already suggesting that it has a very long future indeed. 

Since Bitcoin’s inception in 2009, many thousands of imitators have been created – ‘crypto’ as distinct from Bitcoin. But because Bitcoin is the first successful digital money, any crypto trying to be money, irrespective of its characteristics, cannot compete with Bitcoin’s established network effects. Even near-identical copies ‘hard-forked’ from Bitcoin itself have all diminished in value, participation and security relative to Bitcoin over time. As time passes, this network effect is getting stronger. It is a key reason why no crypto network comes close to Bitcoin’s value, and – due to Metcalfe’s Law – is unlikely to do so in the future.

Some cryptos are better than Bitcoin at various non-monetary things, e.g. using less power, being more private, and acting as a platform for other cryptos and so-called ‘smart contracts’. But all cryptos are inferior to Bitcoin at being money. This isn’t just due to Bitcoin’s network effect: it is also because almost all cryptos suffer from one or more of four critical shortcomings.

First, most cryptos rely on trust because they eschew Bitcoin’s proof-of-work consensus mechanism for the misleadingly named ‘proof of stake’. In reality, this is proof of nothing because it trusts subjective abstract power (the opinion of the privileged), rather than verifying objective physical power (via computational work irrefutably done). By design, proof of stake also increases centralisation, ensuring the rich and powerful get richer and more powerful: in proof of work, work begets wealth, but in proof of stake, wealth begets wealth. 

Second, most cryptos are less censorship resistant than Bitcoin because, instead of being controlled by a large number of ordinary users, they are instead effectively controlled by a small number of privileged users. Even though they cloak themselves in the verbiage of decentralisation, they are in reality decentralised in name only.

Third, far from being sound and fair monetary systems, many cryptos are scams with sizeable ‘pre-mines’, where before launch insiders take a large proportion (or even most of) the coins which will be created. This exacerbates the problems of proof of stake, with the insiders accruing even more profit and control at the expense of the outsiders. 

Fourth, many cryptos do not have a hard monetary limit, or that limit is not clearly defined. This makes them vulnerable to inflation, where the privileged participants can be enriched at the expense of the others. 

Some crypto creators have genuinely noble intentions, and are trying to improve on Bitcoin: it may be the most secure and decentralised computer network in history, but its limited transaction throughput means it is not particularly scalable. Unfortunately, these attempts all fail due to the so-called ‘blockchain trilemma’, which states that security, scalability and decentralisation cannot all be achieved together. Bitcoin wins by not trying to resolve this trilemma at all on the ledger itself, instead incentivising large-volume small-value transactions to move to second-layer networks with far higher capacity than any crypto's blockchain. 

Note that Bitcoin’s superiority as money isn’t only the opinion of individual Bitcoiners. It’s also the view of large financial institutions. 

“Bitcoin is fundamentally different from any other digital asset. No other digital asset is likely to improve upon bitcoin as a monetary good because bitcoin is the most (relative to other digital assets) secure, decentralized, sound digital money and any ‘improvement’ will necessarily face tradeoffs.” 
– Fidelity Research Study 'Bitcoin First: Why Investors Need to Consider Bitcoin Separately from Other Digital Assets, 2022

Bitcoin is not crypto. 

https://www.bitcoms.xyz/bitcoin-is/bitcoin-is-not-crypto 

 For something to become money it must be #fungible. #Bitcoin is not. But it doesn't need to have a hard limit. #Gold was money for centuries, if not longer and it doesn't have a hard limit. Also, it's ironic that you are using large corporations to support your argument.

Bitcoin is good for saving. If you want money, you want #Monero.  

 Can you tell me more about why Bitcoin is not fungible? 

Before Bitcoin, you could argue that nothing was functionally finite except time. However, gold comes closer than most things: it is scarce and hard to produce, qualities which help make it a good money.

Whether we like it or not, large finance houses promoting Bitcoin means one thing above all: adoption. 

How decentralised is Monero? How many people likely hold it? Can you post me at any resources (genuinely interested to know)? 

 Bitcoin is not for the long term. Hard limit proves this. Doing the same thing that happened with land is unconscionable. 

 Let's just stop with this weird narrative. Bitcoin is crypto.

Satoshi called Bitcoin crypto. Satoshi even enjoyed other cryptos - he created Namecoin after all. He obviously didn't think Bitcoin would be the only one.

"But because Bitcoin is the first successful digital money, any crypto trying to be money, irrespective of its characteristics, cannot compete with Bitcoin’s established network effects" 👇

 https://image.nostr.build/b0de23c2b2c90be5f1881fb3ce66b632a2e63bd8bea573fc47c41f5621f9e719.jpg 

 https://image.nostr.build/63d19d93428e129c3f8bfabd474eadfd5bc6267d24a1b42d305fc7e157132fd8.png 

https://image.nostr.build/f973abe946a22c94b9f81ed807ba19a14c25b80dd56591f50dd0ee581bd9c965.jpg 

 I don’t see a crypto challenging Bitcoin in the first chart. Even all of them put together look to be in the minority and declining. 

With its transparent public ledger, Bitcoin is the antithesis of privacy, and can’t even try and compete with opaque systems such as Monero and the fiat system. So Bitcoin being the most accepted currency on the ‘darknet’ is surprising: even where secrecy is most prized, Bitcoin is still leading. If anything, that seems to demonstrate Bitcoin’s supremacy. 

Can you point me at any resources on Monero? Genuinely interested to find out more, particularly its levels of use and decentralisation. 

 The long term general trend on the first chart is Bitcoin losing dominance over time with the cryptocurrency market overall. Second one shows it being displaced on specific markets like the darknet (Bitcoins first use case and the only place your can transact without permission). Wouldn't be surprised if Monero has surpassed Bitcoin in the present since that is from 2021. Most DNMs have included Monero and a few of the largest markets have gone exclusively Monero since then.

Besides the darknet, here are a few recent metrics on Monero adoption and decentralization. Nodes count and distribution are in the same ballpark as Bitcoin. Mining can be argued to be more decentralized since nearly everyone has access to a general purpose computer. It doesn't require a specialized equipment:

https://monero.fail/map
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 Another metric where Bitcoin is obviously losing adoption (and didn't have to) to stablecoins outside of western countries. Despite being (mostly) permissioned systems, stablecoins are still very useful and popular in Asia, Africa, and South America (majority of the world). Why is Bitcoin losing in all these different markets? It fell behind and didn't offer a helpful alternative for all these users. I still don't think Bitcoin is going anywhere, but it will continue losing in these areas if it doesn't provide any competitive alternatives. Potentially fatally over the long term.