Topic: I've come full circle, BTC is the only worthwhile cryptocurrency - page 5. (Read 712 times)
November 09, 2019, 09:17:07 PM
I think, in terms of money use case, there are other categories of crypto money. Most cryptocurrencies try to be some kind of Store of Value. Crypto space has not focused enough on money use cases. I think there is another category of decentralized cryptocurrency: inflating cryptocurrency. I made a diagram to illustrate emerging kinds of cryptocurrencies.
November 09, 2019, 09:04:51 PM
After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project.
All your points are valid and I'm happy to see that there are users who understand the fundamentals of cryptocurrency instead of parroting the narratives created by altcoins' marketing teams.
I think that there are 2 kinds of altcoins that currently have some uses and as the result hold some value. The first type is privacy coins - Bitcoin's privacy is pretty bad, and the most common solution to it - mixers, requires some trust. If Bitcoin will solve privacy, privacycoins will become obsolete.
The second kind is coins with relatively good security and adoption. They can be used as a plan B when Bitcoin's fees temporarily skyrocket. They can be used for small transactions or for moving value between services to save on fees. But again, when Bitcoin will solve scalability, these coins will become useless too.
November 09, 2019, 08:17:19 PM
After 4+ years in the space and countless hours of research, it is becoming increasingly apparent that BTC is the only worthwhile project. Also by the thread title, you can probably tell its not my first rodeo.
Some of my strongest reasoning is specified below, it is by no means comprehensive. While I may have typed the below with conviction, I am openminded to other views (my wallet compels me so) - please put forth your opposing views.
Some of my strongest reasoning is specified below, it is by no means comprehensive. While I may have typed the below with conviction, I am openminded to other views (my wallet compels me so) - please put forth your opposing views.
- PoW is the only true Byzantine Fault Tolerant consensus mechanism. PoS is not BFT at this point in time and I do not see how it gets there. At the end of the day, under PoS and the many other consensus mechanisms, one needs to trust a third party to relay them the correct data and that is assuming that one can be certain that the delegated node holds the majority of the voting power – this is not trustless and re-introduces third parties. With PoW, I can verify the hashes and the longest chain is the correct one.
- Bitcoin as a base layer focuses on censorship resistance, immutability, security and decentralisation. Second layer solutions (scalability/escrow) can be built on top. Claims by other ‘cryptocurrencies’ to be ‘better than bitcoin’ are ignoring trade-offs involving BTC’s key features. Any appreciable increase in throughput will reduce security, decentralisation, immutability and censorship resistance.
- There cannot be a ‘next Bitcoin’ and the paradox of replacing a store-of-value (SoV) applies. Any successful replacement of BTC will forever undermine the credibility of any successor. We are instead made to forever question the replacement of a SOV. How is an investor to know it won’t happen again?. Any other attempt at digital money ‘fails by succeeding’, it fails the eco-system by replacing Bitcoin and ultimately fails itself. By way of example, Gold is the precious metal SOV of choice, most governments/institutions warehouse little or no silver. If silver supplants gold as a SOV, then I’m all out of precious metals because one cannot trust silver will maintain its SOV dominance.
- Medium of exchange(MoE) aside, I can’t think of another legitimate use case for ‘decentralisation’. At a stretch illegal marketplaces may benefit from decentralisation given the risk of censorship or seizure of assets. All these other uses cases like smart cities, record keeping, supply chain, fundraising etc are far better managed through centralised databases where it is not unacceptable for the user/operator to bear some of the risks cumbersome decentralised platforms seek to eliminate.
- If (and it’s a big if) smart-contract enabled platforms finds widespread commercial use, the ‘utility’ basis for value for many of these smart-contract enabled platforms acts as a ceiling to price. An increase in fees to use the network will result in competitor chains becoming more attractive.
- For smart-contract enabled platforms, infrastructure limitations decrease the ability of users to run fully validating nodes (compared to a cryptocurrency targeting a MoE use only).
Jump to: