If you are new to the market, the past few months is a crazy time. The dizzying price changes make you become out of control and able to take away what you are investing. All currencies seem to have the same tendency, so what's the difference? How does a currency make a difference to other currencies? And more importantly, how does an investor know the long-term value of that coin?
In this article, I will explain the reasons why Bitcoin is different from other currencies and why Bitcoin is not really replicated.
1. Real innovation
To truly understand the value of Bitcoin, let's take a look at some of its history. It is interesting to think that the latest ICO or Altcoin will help to "improve" the features Bitcoin lacks, Bitcoin will be thrown into the trash of history as newer, more advanced coins. life. Indeed, almost every Altcoin, ICO or hardfork is said to be based on a fundamental foundation. However, note that the greatest innovation has taken place.
The decentralization is real innovation and Bitcoin is the first and only currency to create it. All other so-called enhancements such as faster transaction confirmation times, proof-of-change changes, different signature algorithms, different transaction modes, and even privacy. Substances are small changes in Bitcoin's enormous innovation.
It is important to remember that all Bitcoin alternatives have been proposed since 2011, but there are not any alternatives that can compete with Bitcoin in terms of price, usability and calculation. security. IxCoin is a Bitcoin simulated currency created in 2011 with a larger bonus payout and a premine (a large amount of coin sent to the founder). Tenebrix is a well built altcoin at this time, this coin has tried adding impedance to the GPU and also for the big premine. Solidcoin was born in 2011 with the ability to handle faster blocks. The only surviving altcoin in the early days was Namecoin and Litecoin with the exclusion of Premium.
ICO also the same status. Mastercoin implemented the ICO project in 2013 and only called 5000 BTCs at the time, after which the project was renamed Omni because the ecosystem around it was "very sick". Factom created ICO in 2015 and called for more than 2,000 BTC, the same plight must also mobilize more call for additional funds because they have run out of money. In other words, all of these new tokens are often poorly implemented and do not actually provide much utility.
Altcoin and ICO have tried many different "features" but most are not helpful or acceptable. What does this say? Why does Bitcoin seem to have a special place in the ecosystem? Why Bitcoin is different? We explore two unique aspects: Network Effects and Decentralization.
2. Network effects
Bitcoin currently has the largest network and benefits from network effects, and other coiners are essentially playing catch-up to keep up with it. If you think Bitcoin is a "seven-day week," then the other coincides are just minor variations ("4 days a week"!) "18 hours a day." Needless to say, This is small and often unacceptable. This is because the network effects of Bitcoin evolve over time and the users optimize the network according to network standards, tightening more people. into that network.
As the network grows, what we see is that the benefits are so subtle that it can not be seen. Things that seem superficial appear to be not really effective, but are otherwise effective for the benefit of people in line with each criterion. For example, a car will not fly or travel on the water because it is optimized for use on firm ground. The lack of additional features makes the car more useful because it makes it easier to find a parking space (smaller size than a hybrid car / sailing / plane hybrid). more fuel saving, ...
In addition, these criteria have undergone challenging times and have demonstrated their resilience in ways that are not yet very clear. You certainly do not want to be the first person to fly in a hybrid vehicle between a car and an airplane, for example, because you simply do not know if it's really safe. Something has been proven for its security, Bitcoin has a huge bonus for someone finding any security flaws. As a result, Bitcoin has proven its security over time. Other coin is younger and / or has been proven to be less safe.
Gradually the vague nature of these "features" becomes even more apparent.
For example, Ethereum's Turing-completeness feature makes the whole platform more vulnerable (see DAO and Parity bugs). By contrast, Bitcoin's clever contract language, Script, completely avoids Turing. The usual response is to fix such vulnerabilities with activities such as financial aid, hard fork, and so on. In other words, network effects and time complexity with focus make the altcoin even thinner.
Bitcoin has the largest network and that means Bitcoin develops simple utilities from having the most users. It's easy to find accessories for a popular phone rather than one that is unused. The surrounding ecosystem makes it much easier to find and keep Bitcoins.
