It’s more than a lively debate. It’s a pointless war. At the heart of this war lies a fundamental rift between the steadfast Bitcoin proponents, and the fervent believers in alternative cryptocurrencies. What’s the story and what can we learn from it?
Bitcoin: The Pioneer and Store of Value
Bitcoin, the world’s first cryptocurrency, has undeniably carved out a place for itself as digital gold. Its finite supply of 21 million coins, decentralized nature, and robust security through blockchain technology have positioned it as a store of value. Bitcoiners are correct when they argue that this digital asset transcends borders and traditional financial systems, providing a hedge against inflation and government interference. For people living in countries without an emergency level of economic/social/political problems and are able to choose from financial services and investable assets, Bitcoin may only seem like another option. But one of the most compelling examples of Bitcoin’s utility comes from countries facing economic turmoil. Citizens in multiple countries have turned to Bitcoin to preserve their wealth as their national currencies devalue rapidly. Bitcoin’s stability in the face of such crises underscores its significance as a safe-haven asset. The Bitcoin blockchain is nothing short of revolutionary, and likely the start of the biggest transformation of the financial system ever known to man. No, I am not exaggerating. But what happened after Bitcoin is a part of that transformation.
Altcoins: Fostering Innovation and Specialization
Altcoins are basically blockchain developments. One may regard them as software companies that have developed thanks to the invention of Bitcoin. There are a few proof-of-work altcoins, but most are proof-of-stake and consume 99.99% less energy than Bitcoin. They offer an avenue for innovation; each designed with unique features and use cases. There are payments tokens, stablecoins, utility tokens, governance tokens and security tokens and shit coins that have no use case. Some Bitcoiners claim that all altcoins are shit coins… that is like saying that we only need cars and not tractors, boats, airplanes, or electronic bicycles. Obviously, we need different solutions for differing problems and needs. Bitcoin, on its own, is simply not designed to do what will happen in the fourth industrial revolution. Innovation should not stop at Bitcoin.
For instance, Ethereum introduced smart contracts, enabling decentralized applications (which can be vital for developing countries) and facilitating token issuance. This has led to the rise of decentralized finance, non-fungible tokens (which are far more than jpegs), and other things such as DeSci, DeApps, DAOs, DID and DEX but I will stop bombarding you with jargon. I am not saying that these developments are without faults. Merely that they are evolvements in the blockchain technology that spring from different needs in society. Take the example of Ripple (XRP), which focuses on improving cross-border payments. Its fast transaction times and lower fees compared to traditional systems have attracted partnerships with major financial institutions across the world. Similarly, Polkadot and Chainlink are paving the way for a more interconnected and collaborative crypto ecosystem. There are thousands of different altcoin coins which together form a rich ecosystem of use cases. The argument that some altcoins could be rug pulls and scams is valid but framing them all as shit coins is frankly imbecilic. Hardline Bitcoiners hate altcoins, but all Altcoiners like Bitcoin because they understand that’s where it started. It’s an evolution of technological developments.
The Road Ahead
Rather than a clash between two opposing ideologies, the Bitcoin-altcoin dynamic could be viewed as a symbiotic relationship. Bitcoin lays the foundation as a digital reserve, while altcoins diversify the crypto landscape and experiment with groundbreaking technologies. Just as gold and silver serve different purposes within the traditional financial framework, Bitcoin and altcoins can coexist and complement each other in what is becoming a new digital economy. For example, X have been approved to transfer crypto in the coming everything app, Paypal has started their own stablecoin and digital money is being developed in all major economies in the world. In May 2023, JPMorgan Chase announced plans to offer Bitcoin trading to its clients and hundreds of banks worldwide are on the crypto train. Multiple Bitcoin Spot ETFs are inevitable around the world. The world obviously needs Bitcoin and altcoins. In this age of rapid technological advancement, the crypto space thrives on diversity and adaptability. Both Bitcoin and altcoins contribute to the broader narrative of decentralization and financial empowerment. I predict that hardline Bitcoiners will mature in time and realize the need for altcoins. As the crypto sphere matures, finding common ground between Bitcoiners and altcoin believers is likely to lead to more collaborative and innovative solutions. Let’s stop the pointless war between crypto currencies and embrace their individual strengths and weaknesses.