2 months ago I posted the diagram below as a long term speculation about the future of blockchain. It might seem that I am speculating about Bitcoin and Altcoins but my core sentiment has more to do with the overall technology and adaptation rather than individual coins.
I am not a trader or a financial advisor. If you have followed my posts over the last several months, you would realize how much I despise technical analysis and charting. Nonetheless, over very long periods of time, I believe charting might offer some benefits since it reduces the noise we get from the daily or even monthly movements. The crypto world is still too irrational to speculate short-term.
The conventional wisdom for bitcoin so far went like this: If you want to make more Bitcoin, find or issue an altcoin, pump it and then park the gains in BTC. As whales start accumulating BTC from the altcoin gains, everything else crashes. The masses sell at a discount their alts in order to FOMO in the new BTC rally. Rinse and repeat.
I have seen this cycle play out at least 5 times. Nonetheless, I believe this time things will be different. This time the speculator needs to ask themselves a single question. "Are they all shitcoins or do I see the world changing through some of these technologies?" If you believe that they are all shitcoins then the cycle of alts pumping BTC will work for you. If not, then BTC owes to die out and allow for the new technologies to be something more than vague speculation.
Bitcoin has offered the seed for all the other coins to become what they are today. This is the undeniable truth. Nonetheless, after almost a decade since the original vision was put into practise, the space has moved forward. If we are to experience the true Satoshi vision Bitcoin will have little to do with the blockchain sphere in the future. There are amazing projects out there that can do so much more. Steemit itself offers instantaneous transactions with absolutely no fees while people are allowed to engage proactively through a social platform. BTC having such a difference in valuation demonstrates how immature the space still is when clearly Steemit is superior in every single way. In the real world it would be like Betamax videos still dominating the market because they have a superior network effect to Blu-Ray discs. Utility trumps network effect in the long run.
The network effect, which has become the only argument might not last as much as we like to think it will last. As the masses join the crypto scene, the network effect of those coins grows exponentially while the BTC network struggles to send a single transaction from A to B. Ironically, this is the only thing it was designed to do and it fails even for that.
I am not advocating against Bitcoin. I am a holder myself and there is a portion I will never sell. Bitcoin has offered me unparallel freedom and insights about how this world works and I will always keep some as a reminder of that lesson. Much like my first computer though I do acknowledge that it has become obsolete. I make silly upgrades like installing shady linux distros in order to say that "it still works" but deep down I know that it's utility is obsolete. The question is not if Bitcoin will become obsolete but when.