Bitcoin: Its Successors & Cryptos linked to it
When BTC is no longer the only dominant cryptocurrency
Let me be clear, Bitcoin is still the most dominant crypto; however the growing cryptocurrency ecosystem is making BTC look relatively more insignificant. In this opinion piece I will try to dissect some of Bitcoin’s characteristics, and reveal some of the areas where BTC fails to meet some of the expectations that especially BTC Maximalists have, for the first and most popular cryptocurrency.
I will also present some cryptocurrencies that I believe can either 1. take Bitcoin’s place, or 2. just coexist alongside Bitcoin, because they provide something that either compliments Bitcoin, or provide something that Bitcoin can never realistically do.
Bitcoin dominance is declining… again.
And the “Other” Dominance category is rising… again, soon to possibly go to its all-time-high, and even surpass Bitcoin’s dominance. What does this mean? In my opinion it means that the thousands of projects in the cryptocurrency ecosystem are growing, and adding more and more use-cases, that more and more people are willing to invest or spend their fiat-money on.
Dominance of “Others” - Altcoins & the big unknown
“Other” cryptocurrencies, or what some people may call Altcoins, are increasing in value tremendously. Now they have about 30% of Coin Dominance, and most of that value comes from projects in the top 100 list at CoinMarketCap.com and Coingecko.com. Projects like Binance Coin (BNB), Uniswap (UNI), Polkadot (DOT), Cardano (ADA), ChainLink (LINK), USDT, USDC take up much of the dominance, however there are massive amounts of new cryptocurrencies created all the time, and are continuously accumulating value.
10 New cryptocurrencies have been added to Coingecko while I wrote this article
5–6 years ago when I discovered Bitcoin, the Cryptocurrency ecosystem looked completely different. Since that time, we’ve had ICO-crazes, scams, BitConnect, crypto exchange hacks, the rise of Ethereum (ETH), several contentious hard forks of Bitcoin (BCH, BSV), Decentralized Exchanges (DEX), Decentralized Finance (DeFi), and Non-fungible Tokens (NFT). Cryptocurrencies are here to stay, and the landscape is evolving every day. In fact, in average nearly 1.5 cryptocurrencies have been added per day to one of the world’s most used cryptocurrency data aggregators Coingecko.com, and approximately 10 new cryptos have been added while I wrote this article.
The cryptocurrency landscape will always change.
Many will fail. Some will succeed.
However, not every cryptocurrency is legitimate, and everyone should do their own research. Many of the new coins have centralized points of failure in terms of token distribution, development, governance, or legalities. This reason is why Bitcoin has succeeded so far today, because it doesn’t have a central point of failure. No single entity or company has complete control of token distribution and consensus mechanisms of BTC, and those characteristics make Bitcoin anti-fragile and resistant to most forms of attacks. I guess this is partly the reason why Bitcoin is getting a lot of new institutional investors now, like the famous Elon Musk of Tesla, or Goldman Sachs and J.P Morgan.
Even the most noble companies behind cryptocurrencies can get burnt/attacked by the law
LBRY Inc. the company behind the crypto LBRY Credits (LBC) with its honorable and noble mission to decentralize media distribution and ownership, has been sued by the SEC (U.S. Securities and Exchange Commission), due to dubious accusations of being a security. How I see it, LBRY Inc. had allocated a large portion of the LBC coins to reward users for using their platform, and is now feeling the consequences of law and a crypto-hostile government. In my opinion, LBRY Inc. would possibly be better off if they didn’t “premine” those LBC coins, but all crypto-enthusiasts would be better off if governments were more welcoming to this new technology. By the way, you can support LBRY by signing their petition at Change.org: HELP LBRY SAVE CRYPTO.
What is Bitcoin trying to be?
When Satoshi Nakamoto published the Bitcoin Whitepaper in 2008, he/she/they called it “A Peer-to-Peer Electronic Cash System”, and perhaps suggests that BTC should be used as a Medium of Exchange (MoE), like fiat-currencies. However, now many people believe that it cannot be used to e.g. buy a coffee, because the transaction fee and confirmation time of Bitcoin is high. In my opinion, many people are partly incorrect, because there are possibilities of 2nd layer solutions like the Lightning Network (LN) that uses BTC as a settlement layer. The possibilities are there, but one could argue that it isn’t time yet, because most people do not want to spend small amounts of their Bitcoin (yet). Maybe in the future when Bitcoin’s value is more stable, and 2nd layer solutions are more widespread and easy to use?
The Store-of-Value (SoV) & Sound money narrative
One use-case of Bitcoin that is really relevant today is the “Store-of-Value” or “SoV” aspect. People buy Bitcoin to hold it, and hope that it increases in value, or at least holds its value in the future. They also hope that Bitcoin will last forever, and will not be destroyed or compromised by external forces, therefore relying on the soundness of the commodity. Bitcoin has been a sound and untampered commodity for 12 years now.
What is Bitcoin trying to become?
Many people have frustrations with Bitcoin. There is one issue: Bitcoin’s inability to change. People want to develop and implement new features, or change block times, or block-sizes with Bitcoin, because in many people’s eyes; Bitcoin is not perfect. This is partly the reason why there are people who develop their own cryptocurrencies. The problem is that many of these developers suddenly take charge of how to distribute supply, and which features to implement in the future. Naturally, humans make mistakes, and with the flip of a switch, can ruin the fundamentals of their newly created currencies.
In a sense, Bitcoin is not trying to become anything else than what it already is. Bitcoin is trying to stay exactly as it is. That’s both a strength and weakness.
Several people like Roger Ver, and Craig Wright have tried to change Bitcoin block size, and it resulted in contentious hardforks a.k.a even more cryptocurrencies named Bitcoin. They created BCH (Bitcoin Cash) and BSV (Bitcoin Satoshi’s Vision), which claim to be the real Bitcoin, where there are nearly just a few minute adjustments made to the code, without much significant impact. This point leads me to the next chapter: Which cryptocurrencies could be the successors of Bitcoin?
The Successors of Bitcoin (or to live alongside it)
I’m not going to mention Litecoin (LTC) or Bitcoin Cash (BCH) or Bitcoin Satoshi’s Vision (BSV), or even Dogecoin (DOGE) as contenders here, because they too share the same contentious hardfork & governance issues of Bitcoin, and are far from as secure.
Decred (DCR) — The ability to change without hiccups.
There is one cryptocurrency that solves Bitcoin’s problem of endless contentious hardforks & governance issues. Decred (DCR) is similar to Bitcoin, but is not a hard fork of Bitcoin. The early developers of Decred (DCR) were original Bitcoin developers, but they saw the problems of governance long before they eventually happened. This coin is completely built by its community, and has a sound governance system that is partly governed by miners, and partly governed by stakeholders. Decred evolves and upgrades elegantly, and has a DCR Treasury which is due to be completely governed by its stakeholders. In a way, you can call Decred a digital state, where the people who own the Decred coins can vote to spend funds to whatever they see fit. The stakeholders have already funded and developed DCRDEX, a decentralized exchange where anyone can trade on-chain with other cryptocurrencies, like BTC, and soon others. The Decred codebase is similar to Bitcoin, so it also supports Lightning Network, which is also compatible with Bitcoin. More info can be found about Decred at the decred.org website. I recommend you to check it out, because I barely just touched the surface.
BSOV Token (BSOV) — The ability to stay as it is, and be deflationary
However small in market capitalization and discovered by few, BSOV Token has no governance function, is mined through Proof-of-Work (PoW), and is deflationary-by-design due to an on-chain transaction burn of 1%. BSOV stands for “Bitcoin Store-of-Value” or “BitcoinSoV”, because it will become forever more scarce as time passes, when on-chain transactions and Uniswap-trades are made. If demand increases relative to the supply, then in theory, the BSOV Token will become more deflationary than Bitcoin (BTC). Nearly 5% of circulating supply is already destroyed, and 30% is timelocked for years by early adopters. The BSOV Community is petitioning to “Abolish the Central Banks, and allow Cryptocurrency to flow freely” at Change.org, because of the inflation created in fiat-currencies, due to the irresponsible printing of money and centralized control that is practiced by the governors of Centrally Controlled Inflationary Currencies (CCIC). BSOV Token is built using the same EIP918 token standard that was invented with the creation of the 0xBTC Token, as I will mention below. Read more about BSOV at: bsov.io
0xBitcoin Token (0xBTC) — The ability to stay as it is
With the release of 0xBTC came the invention of EIP918, a.k.a the first Ethereum Token to implement PoW-mining to distribute tokens. These types of tokens are similar to Bitcoin, because they aren’t centrally controlled, and the tokens are only distributed through PoW-mining. They are different to Bitcoin, because they do not have a function of governance, a.k.a, the ability to stay as it is. If they ever reach a high enough demand, then they stand a chance to become a sound store-of-value (SoV), and be able to either hold their value, or increase their value. More info about 0xBitcoin at 0xbitcoin.org
The Cryptocurrencies linked to Bitcoin
In a way, every other cryptocurrency is linked to Bitcoin, because every other cryptocurrency can be traded with Bitcoin, and they are built on the same distributed ledger technology a.k.a Blockchain. Nearly all types of decentralized and programmable money are interchangeable, because technologies like the DCRDEX can provide the tools to freely exchange and trade every coin or token, without the barrier of hugely expensive gateways like Centralized Exchanges (CEX), like Binance.com and Bittrex.com tend to offer.
Ethereum (ETH) — The decentralized web
Ethereum (ETH) is a cryptocurrency that allows anyone to program money through smart-contracts, and use the ETH coin as a means of gas to pay transactions fees. ETH allows for the creation of ERC20 tokens (or EIP918 tokens), and that alone has created an immense amount of value with projects such as ChainLink (LINK), Uniswap (UNI), stablecoins such as USDC, DAI, USDT, and Wrapped Bitcoin (WBTC). This is not possible with Bitcoin today, and ETH then fills a much needed gap in demand and functionality.
What is Ethereum trying to be?
In my opinion, ETH is not intended to be a Store-of-Value (SoV) that will forever hold or increase its value. I think of Ethereum only as gas; a gas-layer that is used to fuel all the Decentralized Applications (dApps) that are built on it, and that it should be valued accordingly to what people are willing to bid to pay for gas, to use the endless amount of dApps that are created. I believe that the value of the app-layer of ETH will surpass the value of the gas-layer of ETH, if it hasn’t done that already.
What is Ethereum trying to become?
This depends on who you ask. It’s in the eye of the beholder. The Ethereum developers want one thing, the users want another thing, and the PoW-miners have the final say. There are a lot of proposed changes for Ethereum, and personally I’m against changing ETH to become less of a gas-layer. If the price of ETH increases too much due to changing of tokenomics, then ETH will become increasingly more expensive to pay gas fees on. I hope they aren’t looking at the issues with a short-term perspective, or with a perspective that everything will be solved with ETH 2.0, because it will not.
The endless list of use-cases of blockchain
With the advent of programmable money, we haven’t even touched the surface of the possibilities that blockchain can provide. The opportunities are endless, and there will always be novel ways to provide value to the ecosystem, even if you just HODL, or take part in the public conversation; or if you develop new ways to stimulate adoption and value-creation. Cryptocurrencies are here to stay, and there’s nothing anyone can do to stop it. So, if you’re a member of any government and are reading this; just remember: “If you can’t beat them — Join them.”