Is Bitcoin the 'winning' digital currency?
Today's question was asked by Ans O'Connor who writes "Has Bitcoin truly gotten past the point of no return, i.e. are its network effects now so strong that it will ...
What's up, party people? Chris Derose here, Community Director of the Counterparty Foundation, and today's question was asked by Ans O'Connor. Anse, you ask wonderful questions. I'd love to answer them. Anse's question was this. Is bitcoin gotten to be so popular, so large, have the networks effects grown so much that it is the guaranteed winner in the space? So, let's explore that issue. Anse, I've been doing this for a while and I've seen bitcoin since the early days, it's about five years.
Late 2010 is when I really started following this. In the early days, things were so uncertain. We weren't really making any money, in terms of VC funding. We weren't attracting any attention. It was just a bunch of weirdos on the forums, basically, and there was no fanfare whatsoever for bitcoin. And, at some point thereafter, litecoin came out and people were like, well, maybe litecoin is better.
Then some point after that, another coin came out, another Coin came out, and we have thousands of these all coins now. And, in that time, I've seen one by one by one by one, every project in this space that isn't bitcoin fail, either spectacularly or just die and diminish into nothing. You look at the metrics by which we can gauge the health of the network. We see, certainly, transaction counts are just to the moon. We see hashing energy as high as it's ever been and we see the market cap of the coin. We see VC funding.
All of these measurements are just astronomically high, especially when compared to the allcoins. If there was any traction to be had in these allcoins, I think we would have seen some by now. To date, the best we have, maybe, I think at the time of this video is litecoin, which itself is like real rocky and the hashing strength has been going down and down and down all year. The statecoins are an innovation, maybe. The problem with those coins is that they are pre-mined. The sort of permissionless ledger thing doesn't even compete with bitcoin.
So, if you look at Ripple, for example, that's a digital currency that they have but it's not a blockchain technology and it's not a competitor to bitcoin in any way. We've had digital currencies online now for a while, so there's nothing new there but in terms of the blockchain space, it's increasingly obvious that bitcoin is the only one that matters by leaps and bounds. The degree and the magnitude of bitcoin's success has, at this point, I believe, certainly set bitcoin into the realm of absolute success coming at the consequence that no other work chain is going to be at all relevant at this point. Maybe there will be something down the line. Maybe. I'm a bit apprehensive to suggest that anybody should be planning on that.
You know, this gets into the nature of how blockchains work. Certainly, there's some people out there that like to say, well, a blockchain is like a car. We'll have a new model every year or something like that but the evidence has just not shown that. We've had thousands new models of the cars, if that's what they are, and they've all, again, achieved no market penetration whatsoever. The nature of blockchain is that the first mover advantage is what secures the blockchain. This notion that we can have additional miners that come to the network, well, they are going to be miners that aren't mining on bitcoin.
These chains fight each other and it seems very obvious that the only incentive to mining on an alternate chain is to sell those tokens for bitcoin. You see that all of the time. I think that it's absolutely, at this point, just a waste of time to be looking at elsewhere. Maybe something else will come up, like I said. But the chances are so low that I think it's an absolute success in the bitcoin world. You really can't ask for more clear and evident signs of that.
You just think, too, what do you see in the papers? What do you see on TV every day? How often do you see litecoin referenced? Litecoin has been around for five years now, four years, something like that and has nowhere near the coverage that you see with bitcoin and that's certainly true for everything. Dogecoin, obviously, namecoin, you name it, Monero. All these incidental coins, it's a very difficult proposition that you are going to find somebody that is going to invest the time and money into creating software that either attracts a community to create software or any of these things when there's already a clear indication that bitcoin's working. You know, and another part of this debate too is, what doesn't bitcoin do that you need? Because the answer is probably or certainly not much, and if there is something that one of these other coins do that we need, it'll be incorporated into bitcoin. That's how open source software works. That's how open platforms work.
So, if you think that bitcoin is lacking something and someone comes by and wants to sell it to you, you should say to yourself, well, if it's important then it will be added to bitcoin and I'll have it at that point because that's typically what's happening in this space. So, I think's it. That's all the big issues. You know, I know that it doesn't make me a popular person outside of the bitcoin space sometimes, but it's just that I've been here for a while. I've seen this. We've all seen this in the bitcoin space.
There's no project that's going to succeed at the rate we are going,m besides bitcoin. This is probably the one and only chance we have of having a blockchain work, which it's great because it's working well and when there's problems, we fix them. That's how it works. If you have some questions or you have some comments, leave them in the box below. I always like to see them from you and subscribe to the channel, if you like what you see. Later, party people.
Oh man, I could go for some lunch.