With the explosion of cryptocurrencies (altcoins) has come a growing question surrounding the grandfather of them all: Why still Bitcoin? Why choose it today over seemingly more exciting projects and initial coin offerings (ICOs)? This very question has been on my mind since getting into cryptocurrencies – and even led me to push Bitcoin to a minority position in my portfolio – with no good answer.
That is, until Nick Tomaino answered in unequivocal terms over at The Control:
Meanwhile, newer and shinier cryptocurrencies like Ethereum and Zcash emerged. These cryptocurrencies seemingly offer everything that Bitcoin offers plus more (a Turing-complete scripting language for ETH and an encrypted blockchain for ZEC). They also seem to be supported by more cohesive communities led by benevolent dictators (Vitalik for ETH and Zooko for ZEC). Given all of these factors, one might assume that Bitcoin may be on the decline.
That assumption would be dead wrong though. Bitcoin has a few things that no other cryptocurrency has and the past few years have proven the genius of Satoshi’s design:
1.) No one central party controls Bitcoin
2.) The lack of a founder and undisputed leader means that the protocol is extremely difficult to change (even seemingly obvious changes like the block size take years to change) 3.) People around the world can use the protocol with a high degree of confidence that its core features (total coin supply of 21 million, a block reward that decreases by half every 4 years) won’t change
Bitcoin is the purest cryptocurrency that uses cryptography and incentives to achieve social scalability. That social scalability is achieved because you’re not putting any trust in any central party when you use Bitcoin and you can be fairly certain that the protocol will not change much over time. Bitcoin has no competition in that respect today and the strongest brand and network effect as a result of this social scalability.
Why still Bitcoin? Wonder no more.