bitcoin vs altcoins

What Altcoiner’s don’t seem to understand

Conferences and meetups are full of optimistic people, some love bitcoin and some love blockchain but not bitcoin. Bitcoin has reasons why it is special but blockchain people or Altcoiners excitement seems more like a child using Google sheets for the first time with no idea what they are going to but in all these rows, columns and cells but it seems to be anything and they are more than happy to spread their joy.

A weird side-effect of owning bitcoin for so long is that after you learn how the code works, study the charts and scratch your head a lot you learn more than you ever thought about economics and currencies. As part of that learning you might learn what happens when a currency changes from one to another like the German Deutsche Mark to Euro in 2002 or the Argentine austral to Peso in 1991 for example.

What makes these currencies work is a place that issues that currency into the economy and a place that takes it out usually in the form of tax. Bitcoin acts more like a commodity as everyone knows there will only exist 21,000,000 bitcoins and a million times more satoshis but when it comes to Altcoins they grab this new google spread spreadsheet and fill it with something like USD or shares or some other asset with existing value.

Now building your own version of Google sheets is hard so Ethereum came along and said “Why build your own when you can use ours?” with ERC-20 allowing 231,970 versions of Google sheets to be created to date (https://etherscan.io/tokens) many saying “one day we will create our own better spreadsheet software later when we have the time”, I call these Altcoins.

Sure there is opportunity in Altcoins but you need to build and entire economy to get it right if you want it to be a currency or take on great risk if you want to “tokenize” existing assets and this is where Bitcoin comes in. In the movie Margin Call there is a great line “There are only 3 ways to make money in this business, be first, be smarter or cheat”. Bitcoin was first, many are trying to be smarter but most just end up as smarter versions of Ethereum at best and there are no shortage of cheaters in the form of scams, ponzis, or if it was in another currency it would be illegal but because it crypto catch me of you can.

We have not seen it proven yet but if the Bitcoin spreadsheet becomes more important than building a better Google sheets the optimism of so many altcoiners might evaporate.

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