Who hasn't heard of Bitcoin during the last month?
The first cryptocurrency to become famous and to make soooo many millionaires.
It slightly reminds me of the gold-rush during the 19th century, where everyone was leaving with a pickaxe on their shoulder, looking for a life-changing discover; nowadays, people are throwing cash in this digital currency - most of them, I must say, without understanding its fundamentals - hoping to become millionaire.
During the last month, resulting from the continuous acceptance in the media and two upcoming forks (https://www.coindesk.com/short-guide-bitcoin-forks-explained/), the currency has reached 7300$ from a bit more than 4300$ at the beginning of October.
The Bitcoin community on the Internet is partying and remarking that "they've always known" and that the "limit is the moon".
However, I am not sure how Satoshi Nakamoto would react on this enthusiasm.
I'm gonna express an unpopular opinion here, bear with me.
The main reason why Satoshi created Bitcoin was to "decentralize trust" and allow
"online payments to be sent directly from one party to another without going through a
financial institution". I am pretty sure he did not just want to create yet another speculation vehicle
(for those who haven't read his paper: https://bitcoin.org/bitcoin.pdf).
Here are my two cents on what's happening right now:
I believe that Bitcoin is experiencing such growth because of its brand and because it has been the first crypto.
However, while it is undoubtedly a good investment and speculation vehicle, I do not believe that the future of our financial system will be built on top of it, for several reasons.
1. The system is slow and it is really difficult to improve and to scale - funny enough, due to its consensus mechanism, which is also its main advantage. The frequent occurring forks are exactly the representation of this problem.
2. The community is divided and toxic. The original cyberpunk community has been infiltrated by wanna-be millionaires and by everyone who saw Bitcoin as just the best investment of their lives. Having discussion is increasingly more difficult and what is good for the community is often secondary to individuals' self- interest.
3. Bad tech: the POW algorithm in the protocol is simply not efficient enough. While this could have been a solution in 2008, when Satoshi released its paper, it cannot sustain the growth of Bitcoin.
These are among the main reasons why I believe that, while Bitcoin is the best source of saving and will be the new gold in the future, it is not the best blockchain and will not really contribute to what Satoshi wanted to achieve. Just like any first entrant in a market, it is not easy to retain market leadership, eventually newcomers will penetrate, with better and faster technology.
However, on the positive side, the creation of Bitcoin has given rise to the Blockchain sector and to many more cryptocurrencies (over 1000 at the moment). While most of them are redundant and useless, some others bring notable improvements and you will - most likely - use them in the future.
Examples of what I believe are improvements of the Bitcoin protocol and blockchains that will retain an important spot in the decentralization of our world are: Ethereum, IOTA, Monero, ZCash.
I won't explain their technicalities or the reasons why I believe so, I'll leave the pleasure to you.
The blockchain era is just starting. We are only at the beginning of a new paradigm.
At the moment, everything is about the hype of this new technology, because the actual products haven't been released yet.
I imagine a future where there will be hundreds of cryptos, each one fulfilling their specific roles, whilst based on some "network-type" blockchains (like Ethereum).
In this future, Bitcoin will probably be too expensive for any normal human being to own and all of the other cryptos will probably be pegged to it - just like they are to the US dollar nowadays.
Please don't misunderstand this post, I'm not arguing against Bitcoin.
One way of another, it will succeed.
I'm just expressing my opinion about its place in the new blockchain world.
Feel free to disagree or agree in the comment section: that's what blockchain is about, contribution and discussion among all of the participants in the network.
May the blockchain be with you.
