…unfortunately, in my opinion, the Bitcoin brand has been ruined. There was a failed hard fork called the Segwit2x fork and as I’m typing this, I’m hearing all sorts of plans to have a Bitcoin Diamond, Bitcoin Silver, Bitcoin Plus and so on. They may as well just call them Bitcoin Printing and Bitcoin Press because that’s all these are. The community have found a legal way to effectively create new currency out of thin air and then sell it straightaway for BTC or USD. You can’t blame them really, most people would do the same if they suddenly realised they had the skills, talent and know-how to exploit something like this.
At the end of the day, although Bitcoin is the Grand Daddy Crypto, the one that carved its way into the history books forever, I personally don’t think it’s THE ONE. The Bitcoin brand and public perception has taken a dent with these forks and it has way too many problems, even if they do figure out the scaling problem. But the biggie for me is that Bitcoin is one of the most wasteful things on the planet. Even though Bitcoin is virtual and is nowhere and everywhere, it has very serious consequences to the planet in the form of energy consumption. Right now, in order to process every single BTC transaction, it takes up the same amount of electricity as a US household consumes in ONE WEEK! Yup, you may want to pick your jaw up off the floor and read that again! It uses SO much energy that it consumes more energy per year than the whole of Nigeria! And Nigeria is a very power-hungry country seeing as it’s an exporter of Oil!
A little piece of my soul dies every time I press send and ping some Bitcoin around the net. Ultimately, this is all unsustainable, unless Solar technology rapidly advances or the Bitcoin network changes. Until then, it’s going to continue growing in electricity consumption! This is why I think that just like in the Tech Bubble we had powerhouses like Altavista, Netscape and AOL which subsequently popped and disappeared after the bubble, Bitcoin may do the same when this bubble eventually implodes. The Facebook, Amazon and Google of the Crypto world has not been born yet and it won’t be long before they do emerge as this whole industry is moving faster than any industry in history. And really, for a true Crypto to rule supreme it needs to be infinitely scalable and Earth-friendly!
I’m aware that I’ve been rather scathing of Bitcoin in this chapter, so in the interest of balance, I’d like to state that I’m not a hater. As much as I hate to admit it, I’m a bit of a fence sitter. I personally don’t own any Bitcoin now as it’s getting quite toppy (temporarily) and although everyone is raving about how it’s gone up 1000% in the last 12 months (November 2016 to November 2017), it’s pretty average in terms of performance compared to many other Cryptos. And I’m also aware that many different statements I’ve made in this chapter could very well be debated and argued because hey, like religion, there’s always someone somewhere that will disagree with you on your personal take of things. There’s also a part of me that thinks that no forked version is the answer and that we already have the best version…BTC. I think it’s silly to try and scale this bad boy up to compete with the likes of VISA. BTC should be like Digital Gold. Gold in the real world is finite, clunky, a pain in the ass to store and very illiquid. BTC can easily be all of these things. In fact it already is this! It’s simply the Global Reserve Crypto Currency, just like the US Dollar.
Another thing that nearly EVERYONE forgets when touting all these fancy new hum-dinging and dancing coins is that no coin or token can become the Crypto top dog until all the dozens of main exchanges unanimously agree that another coin becomes the ‘Quote Currency’.
You see, in Currency Trading, you can never trade just one currency. You have to trade it against something else. For example, you may want to buy the Dollar as you think it’s going up. But against what? It may be going up again the Pound, but it may be falling against the Euro. It’s exactly the same with Cryptos, except unlike the Foreign Exchange markets where you have multiple quote currencies, BTC is pretty much the only Quote currency. Yes, I know you can buy a few coins with Ether, but the selection is limited. In order to do anything, you need BTC. If you want to buy some Altcoins, you can’t just buy them with Pounds or other Fiat, you must convert them into BTC. Then go shopping with your BTC. Then when you want to realise some of your profits from the Altcoins, you have to convert back to BTC to then convert back to Fiat. As I said, until all the exchanges suddenly agree at the same time that a new Crypto is the new quote currency, BTC will continue to reign supreme.
Also the reason why all exchanges need to agree at the same time is for commercial reasons. Crypto exchanges make their money from those small transaction fees they take on every transaction. Therefore volume is everything for them. So if only one exchange made their main quote currency something else instead of BTC, but the other exchanges didn’t follow suit, then people would stop using that exchange which would then kill their cashflow…
Hope this has helped. There’s plenty more where this came from. Aiming to release the book before Xmas! So stay tuned!