|Bitcoin is NOT “crypto.”|
Bitcoin is decentralized, censorship-resistant money. It is an immutable bearer instrument, meaning that possession of the key entitles the holder to dispose of the value of Bitcoin, and no entity in the world can do anything to stop that. It is an asset, not a security, meaning that it does not represent debt, derivative, or equity in any enterprise. It has no shareholders, no corporation, organization, CEO, nor any other kind of administrator who can make unilateral changes to it. It has an entirely fair distribution, which is to say that it was worthless for years before it had any value, and no one involved in the project had any special bitcoin allocation. It has always been the top cryptocurrency by monetary usage, market capitalization, and ecosystem adoption. It requires no special hardware or permission to run, and anyone with a regular computer can run a full Bitcoin node.
No other leading crypto asset meets any of these criteria, much less all of them. None of the 20,000 other crypto projects meet all of these criteria. The vast majority of “crypto” projects are scams, created solely to enrich the founders. The few well-meaning projects are securities promising a future payoff, but few practical applications today. No other project can be said to already serve millions of users’ needs for non-speculative purposes.
The “crypto” space is dominated by scammers, grifters, and ignorant sycophants who believe their lies because they’ve been sucked into a shitcoin cult and because they can only profit as long as they keep finding other suckers. The actual founders of these projects typically put all their profits back into Bitcoin or fiat as soon as they can get away with it.
The sooner you understand that Bitcoin is unique, the sooner you can get away from pump and dump schemes and put your wealth into the asset most likely to safeguard your wealth.
Bitcoin is not “crypto.”
Below, I will break down the ways in which Bitcoin is unique, critique some of its competitors, and then answer some of the criticisms made against Bitcoin.
|This newsletter is based on my talk “Bitcoin vs “Crypto” why they are not the same” at Liberty On The Rocks Denver, which you can watch below:|
|Bitcoin creator Satoshi Nakamoto:|
The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.
Unlike the vast majority of “cryptos,” Bitcoin solves a real problem,
the problem of modern civilization: fiat money. Why is fiat a problem?
The US government and our economy are being kept afloat by a giant “everything bubble” that assumes that the world will keep buying dollar-denominated debt. When the bubble pops, the dollar will collapse, and the world will need a new reserve currency. In other countries, the bubble has money has already collapsed, and Bitcoin is already a lifeline.
The corrupting influence of inflationary fiat money has infiltrated and ruined every aspect of society – I highly recommend Saifedean Ammous’ book “The Bitcoin Standard” for the gory details.
Unlike shitcoins, Bitcoin solves a real problem affecting billions of people – and that is why it has the most real-world adoption.
|Why promote maximalism now?|
|Warren Buffett: |
Only when the tide goes out do you discover who’s been swimming naked.
The crypto-bear market is upon us. Many scams and vaporware projects have failed, and many people are getting turned off crypto assets entirely, which is why it’s a good time to remind you that Bitcoin is not crypto. Speculators who are here for a quick buck will come and go, but Bitcoin is here for the long run. Now is the time to highlight this fact.
|Bitcoin is different|
|Bitcoin is better money, the best money|
Bitcoin is better money – actually the best form of money ever. It doesn’t pretend to remake the web or introduce exotic financial instruments or allow your company to run itself, or a new art form. It’s just money. It’s been better money from the beginning because it’s digital, decentralized, and scarce.
Bitcoin actually has a use case that people all over the world are using. Jimmy Song: “Crypto” is not any of these things because its leaders are like politicians, making promises they won’t keep.
Bitcoin is not a security
The U.S. Supreme Court’s
Howey test: “an investment contract exists if there is an “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.” Nearly every other crypto asset is a security: it’s a project run by a centralized team, with the goal of making a profit. Token buyers are investors, hoping to earn a reward from the work of that team.
When you buy a crypto token, you’re betting that the team that runs the token will beat 10,000 other projects and make you a profit. Often, they are backed by millions in venture capital, which they use to sell their investment.
Bitcoin is different. There is no one in charge, no “Bitcoin CEO” or marketing team, no venture capital, and no securities token. Bitcoin is truly decentralized, and all decisions are made by a community consensus process.
We can see evidence of centralization the fact that other networks can simply reboot their blockchain when they have a bug, or the fact that Ethereum’s supply schedule changes more often than the weather. There will only ever 21 million Bitcoin, and there is no group or charismatic leader in charge who can ever change that.
Bitcoin has no demagogues
Cory Klippsten, the CEO of Swan Bitcoin:
“Why is Bitcoin not a Ponzi scheme? The big difference is that there is no entity or group of people that control Bitcoin who are marketing Bitcoin to be able to dump it. If anything, most Bitcoiners that promote Bitcoin are just buying and holding as much as possible — and people who love it the most are the people who never sell.”
Bitcoin has a fair distribution
Bitcoin is the only blockchain that has a credible claim to a truly fair distribution:
* No premine (Satoshi didn’t grant himself any coins)
Satoshi gave a 2 month heads up before launching the network (no sudden release and no mining before release)
* Coins had no value for 1.5 years so they circulated freely (it’s not even possible for an altcoin to replicate this)
* Satoshi never cashed out (unlike every altcoin founder in history and I bet it stays that way for eternity)
By contrast, Ethereum launched with 12 million ETH for the developers, and 60 million ETH for sale as an “initial coin offering” during the presale.
Bitcoin is #1
All other cryptocurrencies only exist because of Bitcoin: Bitcoin enabled an instant global payment network and final settlement for other digital assets. If you own another cryptocurrency, there is a good chance you bought it with Bitcoin.
If you hear about any other project, it’s because of a marketer/promoter, whereas Bitcoin’s growth is organic.
Bitcoin is useful today
Bitcoin is the only crypto asset with underlying non-speculative demand. It is useful today as a long-term store of wealth and medium of exchange. The only reason to own altcoins is speculation. If they ever acquire a practical use, you can just buy them when you need them. Only Bitcoin is Legal Tender in El Salvador & the Central African Republic, has tens of thousands of ATM’s, and saves lives in bankrupt countries like Zimbabwe and Venezuela.