Bullish on Bitcoin but even more on Altcoins
INTRO
When Bitcoin was created, with the help of the 2008 financial crisis, it opened the eyes of many people on the problems of our current system ( monetary, financial & economical), and it will continue doing so. But its decentralized and open source nature led initially to many copycats, and afterwards to countless alternatives (Altcoins), some interesting and others not so much. This is for no reason a bad thing, it is the beauty of a truly open and free market, and who knows it might lead us to finding an even better solution than Bitcoin, if we haven't already found one. Personally though I'm convinced that Bitcoin is the best solution we have to the current system so far and for now the market seems to prove me right. However, although I belive that in the end it will prevail in one way or another, some Altcoins might overtake it more than once, in terms of market capitalization. In fact, in my opinion they have various characteristics that make them more captivating in our current economy, for both big and small investors.
BITCOIN: features
But before getting to that let's understand what makes Bitcoin so revolutionary and which role it can take in our world. Let's start with the properties that makes it the most revolutionary monetary system ever created. The first problem it solves is the one of not having to rely on a intermediary, therefore it gurantees a direct digital exchange without the need to go through or depend on a third party. This gurantee is given by more factors, cryptography which ensures we are the owner of specific Bitcoins, open source code which allows us to verify how everything works and mathematics which gurantees that there will always only be 21 million BTC. The last point not only makes it far better than any FIAT currency (guranteed by however the goverment/central bank feels like) but also than GOLD, which we still don't know precisely how much exists. It beats gold by far also on divisibility, in fact one BTC equals to 100 million Satoshis (basically what cents are for a dollar). FIAT currencies were in part created to solve GOLDs divisibility problem, which means that Bitcoin takes the best of both worlds, FIATs comfort mixed with GOLDs safety. But not just that, a huge step forward from both models is the impossibility of counterfeiting, thanks to cryptography and the nodes that verify every single transaction, we are able to make sure that every transaction is legit, thus avoiding the double spending problem. Speaking of nodes, let's look at what they are, a node can be anyone (easy to setup and doesn't require too much computing power). It mantains track of all transactions done so far and checks that new transactions are correct. Since each of us can check the history and what is going on, this makes it the most democratic monetary system in the history of humanity. Finally since it's accessible to everyone, it is seeing great adoption in really poor countries, where people don't have access to banking services. However, Bitcoin has still one big lacuna, scalability, the main chain by itself doesn't need more scalability because it has to ensure decentralization and security. But the various second layer solutions that are trying to make Bitcoin capable of every day transactions, even though they're already decent, they are still unable to support an elevated load and certainly not one for global adoption.
BITCOIN: role
All this characteristics make Bitcoin the best option, but the road to full adoption is still very long, if not impossible. In fact it might end up expressing it self in a much smaller way. Obviously the ideal would be to have a total replacment of the current system, but let's have a look at what the other possibilities are. Another eventuality is to have it as a payment system beside the others, otherwise states could use it to back their currencies completely or partially. Or it could simply be a store of value (like silver & gold are, mostly), that would turn it into a percentage of institutions portfolios and of some small interested retail investor. Although this is the least rosy outcome, it is also the most plausible, as a matter of fact there are an increasing number of institutions interested in it, even blackrock recently. While most ordinary people, even though it would benefit them more, are still not showing enough interest. But there is always time, they will enter at the price they deserve. Nevertheless it is a fact that we have in front of us an unmissable opportunity to improve significantly our monetary system, it's up to us to decide if we want to continue with costantly increasing prices handled by a small group of individuals or switch to a system ensured by code that each of us can verify, that gurantees us an accumulation of wealth thanks to scarcity, to slowly improve not just our condition but also the one of future generations. The choice is ours.
ALTCOINs: role
Earlier I hinted at how Altcoins will have important roles in our current economy, but before doing that let's see the various types. Let's start by dividing them in 4 categories with their various purposes, in cronological order. The first one are the Bitcoin clones, cryptos very simular to BTC with small differences in scalability and/or supply, usually useless, apart from Litecoin, whose biggest utility is to see if it's updates are safe and tested enough to be implemented on Bitcoin. Since Dogecoins first block was mined in 2013, the second category is the one of Memecoins, they usually have nothing special, as said they're originated from memes. Even though some of these chains are trying to legitimize themselves by adding some utilities to their Memecoins, they're generally useless, but not completely and in the next paragraph I'll tell you why. In third place we find all those that offer a single service, all those cryptocurrencies that offer a specific decentralized service. The first example that we can find is Monero, whose service is privacy, by making every transaction anonymous and untraceable. More recent examples are videogame tokens ($SAND, $ATLAS, $ILV...) or artificial intelligence ($RNDR, $AGIX...) or even cloud like $AKASH and in many other various sectors. Finally, the last one and probably the most important, those cryptocurrencies that are aiming at replacing the current centralized internet with a decentralized one. Or by coming more down to earth, those blockchains that can host various applications, which in turn can themselves host one or more services of any kind (financial or not). The first one is Ethereum and all its second layers (secondary blockchains that tap into the security of the main chain). After it, in the following years, many other competitors were born with simular characteristics and their pros and cons, like $SOL, $AVAX, $ ATOM, $SUI... And there will be many others that still have to be created.
BETTING ON ALTCOINS
By now we all know it, this monetary system based on debt and inflation has made it so that we end up spending continuously on short term pleasures, because our currencies constantly devalue. Obviously the solution to all of this, would be Bitcoin, but it seems that we are still very distant. And also, who knows if the population is really willing to sacrifice today for a better tommorow? Perhaps, most of us have gotten used to live in the pursuit of constant pleausures, while never being happy? Then why make any sacrifices?
On the other hand, slightly smarter people, instead of spending on pleasure, invest. But investing is getting harder by the day, what worked yesterday no longer works today. The continuous rise of inflation requires that you have to take more and more risks, as a matter of fact over the years we are seeing always more volatile markets and many investments in companies that often aren't even producing something. So, do you really think that Altcoins if not even Memecoins, don't have a place in all of this??
The crypto world has already seen some institutional investors over time, but it is now that we are witnessing the beginning of this shift towards even riskier assets. Blackrock & co have just requested for a Bitcoin spot ETF, and once the US will give them more clarity on crypto regulations, it won't take much longer before they ask one for Ethereum, especially if prices will go higher in the meantime. Furthermore we are seeing continuous discussions and tests (mainly on Ethereums chain) from banks and institutions, on the tokenization of traditional finance assets. This would mean having all in one, crypto and stocks (tradeable continuously and at every hour in a much simpler and safer way) without the need of leaving your wallet.
We are moving towards an increasingly digitalized world. Think about it, the innovations that are on everyones lips right now are artificial intelligence, virtual reality, digital identity, metaverse (or at least digital "possessions") and digital money. And often we find cryptos that offer services that have to do with all the categories just cited, sure, maybe they won't survive the test of time, but they definetely attract lots of institutional investors and retail subsequently. The most recent example being $WLD in the digital identity category.
CONCLUSIONS
To be clear, I'm not saying that all Altcoins have as their only utility the one of allowing you to beat inflation in a market that requires you to take increasingly more risk to do so. On the contrary, I belive that many Altcoins don't just solve many of the problems we already have, but most importantly they will solve numerous of the problems that the increasing digitalization will bring. Taking away some of the Altcoins that will prove to be useless and most Memecoins, which can be easily compared to all the tech companies that collapsed at the end of the dot-com bubble. We will see many valid Altcoins have nonsensical valuations, exactly as many of the tech companies are today. And although I think that the ever decreasing productivity of humanity that comes from the increasing digitalization, has to come to a sudden end at some point in the near future. In the meantime Altcoins will take on an increasingly fundamental role in our lives, especially in the digital one.
In summary: SHORT HUMANITY, BY LONGING ALTCOINS AND TAKE THE PROFITS INTO BITCOIN (NOT FINANCIAL ADVICE).
