Bitcoin is the strongest and most important digital asset. Anything else labeled “cryptocurrency” promotes a decentralized fallacy and should be considered a riskier asset.
Let me back up for a second. There’s no denying that the world of digital assets is expanding exponentially. Creatives receiving compensation for their work in the digital space should be applauded. Discovering more efficient ways for businesses to handle data is valid. But any new project based on digital scarcity and truth should be asked the following:
- Does the project really require a decentralized monetary token?
- If yes, then is the blockchain that the project is built on truly decentralized?
The truth is that the term “crypto” has become an unfortunate umbrella term that lumps Bitcoin into the same pile as speculative NFT images, the “Metaverse,” and even meme coins like Shiba Inu Coin.
Most of these speculative crypto assets have nowhere near the level of decentralized infrastructure, network effects, and long-term appreciation as Bitcoin.
Have people found immense profit and success from different crypto projects? Absolutely. But there are countless pump-and-dump schemes (usually by the founders) where the asset never recovers, and the risk is immense.
If adults want to play in this virtual casino, they should be able to. But it is dangerous to think that NFTs or meme coins share the same characteristics as Bitcoin.
Highly recommend reading this research article by Vijay Selvan, “Bitcoin, Not Crypto.” It definitively explains how Bitcoin is a “path-dependent one-time invention,” meaning that it is the only asset that can genuinely call itself immutable. And with its latest Taproot upgrade, the current benefits of innovative crypto assets like Ethereum will eventually be absorbed into Bitcoin:
“In November 2021, Bitcoin will adopt a substantial software upgrade known as Taproot, which will significantly improve the malleability and programmability of the protocol, unlocking the potential for cheaper and more complex smart contracts. Bitcoin will thus be able to offer a lot of the functionality and programmability of Ethereum, for example. The difference being that the former will be on a rock of decentralized immutability and the latter built largely on the sands of decentralization fallacies.”
Perhaps future DAE articles will explore how digital assets will be held in the world of AR, VR, and the coming metaverse (whatever that means). But make no mistake, Bitcoin will always be in a different category because of its absolute decentralization.
Web 3.0 has a significant promise; for individuals to own their digital property without the tyranny of a centralized entity. That promise can only be upheld on a sturdy foundation. And that foundation is only Bitcoin.
This article, along with all content and opinions from Digital Asset Examiner, is for educational purposes only and is not financial advice. Please reach out to your financial advisor before making any investment.