Bitcoin, Cryptocurrency

Bitcoin Survived The ‘Perfect Storm’

  • Several folks “are often waiting for the ‘next big thing‘ to gain modest profits.
  • Two essential factors make assurance a good rather than a bad thing in crypto.
  • “Bitcoin is a world-class label like Disney or Nike now.”

Crypto is one of the most innovative and groundbreaking technological advancements to have happened in modern history. The mystery is: 

Is crypto still creative, and are new cryptoasset platforms increasingly expected to provide significant technical improvements over their predecessors?

As reported to Cryptonetwork News by the experts, some people are always on the lookout for the next ‘big thing‘ in crypto. Many of these people are motivated more by financial speculation than any specific desire for technological evolution.

However, an arguably more significant group of people within crypto appreciate the relative stability of platforms such as Bitcoin (BTC) and Ethereum (ETH). By updating themselves more gradually and securely, such platforms provide a solid foundation on which innovations can grow.

Cryptocurrency: New Smartphones?

Some folks view cryptoassets as a new kind of consumer tech product that has to be continuously updated, upgraded, and superseded. This kind of thinking is typified by a tweet this April from Huobi:

Looking at Twitter or searching the web for the “most innovative cryptocurrencies,” you’ll find no shortage of people championing any given new cryptoasset as the most significant token ever developed. You’ll also find something very similar to new platforms and services built on top of various blockchains, particularly those related to decentralized finance (DeFi).

Though, while there seems to be a noticeable tendency in crypto for some people to talk about which project is more ‘innovative’ than the other, industry figures don’t believe it’s a dominant tendency. What’s more, CoinRecoil, an India-based crypto exchange, Founder Kunal Barchha told Cryptonetwork News that a desire for ‘innovation’ is often driven by a passion for a new coin to pump.

“I would say a very few percentages of people view cryptos as consumer tech products. Most of the people are interested in riding the wave and making profits,” he said.

Barchha acknowledged that those most dedicated to and personally invested in a project might be focused more on its technological aspects than anything else.

Still, he argued that many people “are mostly waiting for the ‘next big thing’ to make decent profits. We have seen that during the [initial coin offering] boom, then [initial exchange offerings], and now DeFi.”

Tim Rainey, Chief Financial Officer at New York-based mining co-location provider Greenidge Generation, also suggested that the crypto community is usually split between two essential mindsets:

  • One sees cryptoassets as an uncertain hedge against the current financial system,
  • The other wants to get in on the next big thing on the ground floor.

The former value things like stability, network effects and branding, and generally gravitate towards BTC due to these qualities. They view its stability as a feature, not a bug as evidenced by Michael Saylor’s explanation for putting MicroStrategy’s reserve cash in BTC,” he said.

As for the last group, it’s “motivated by the possibility of being among the first to invest [in new crypto] before it can potentially reach the popularity and price appreciation equal to those of Bitcoin or other well-known cryptocurrencies.

Technological foundations and standards need stability.

Fundamental to this split are two key factors that make stability a good rather than a bad thing in crypto.

First, in Bitcoin, its growing status as a store of value arguably means that it doesn’t need to innovate continually.

Bitcoin is a world-class brand like Coca-Cola or Disney now. It’s known and trusted,” said Guardian Circle, a community emergency response network that uses the GUARD token, Founder Mark Jeffrey, who argued that Bitcoin’s cautious approach to change is one of its strengths.

“Yes, it’s slow. But as a store of value, it’s more than good enough,” he told CNWN.

Bitcoin’s purpose in life is to replace gold. It doesn’t NEED any more features. And for brand and trust purposes: older is better. I don’t think anything can or will supplant Bitcoin now as the primary digital store of value. That race is done.

Second, numerous blockchains essentially serve as infrastructure for the varied third-party projects built on top of them. According to Bitcoin SV (BSV) developer Brendan Lee, this means it would be unwise to update and change them frequently.

The whole idea is to create a system that can be used as a foundation layer for future technology. This means that it must be simple enough to build anything, but also that it must have a locked protocol,” he said.

Lee argued that few people would accept a system for storing value that might get an ‘upgrade,’ which renders their money unspendable or their financial application unusable. “It is not the protocol that must change to add new use cases, but the protocol which must be flexible enough to accommodate all use cases.”

Future Creation

Still, for cryptoassets that don’t aim to become infrastructure or a store of value, some regular innovation degree is necessary.

Blockchains whose main aim is not to be a store of value would be anticipated by their users to continue evolving to better meet their original vision. If such a blockchain stops innovating, other blockchains that aim to solve the same problems may take its place,” said Igor Runets, Founder and CEO of BitRiver, a Russia-based mining services provider.

In light of this, we can expect a regular flux of new projects, particularly when it comes to projects built on top of blockchains like Ethereum and Bitcoin. But as the above has shown, there’s no innovation without some degree of underlying stability.

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