The rise of cryptocurrency into a popular culture phenomenon has changed the overall blockchain ecosystem for the better; More than ever he is actively involved and aware of technology, institutions that have rejected cryptocurrency are investing millions of dollars in it and even “old money” bastions such as JP Morgan and Goldman Sachs are publishing reports on the performance of various digital assets.
However, the prevailing acceptance of blockchain technology has brought with it some drawbacks. While the initial growth of the space in 2017 was centered around bitcoin (this was the first time many people, including myself, were learning about bitcoin), recent growth has been more centered around alternative platforms. Although the value of Bitcoin has certainly skyrocketed over the past couple of years, it has almost become a given within the broader cryptocurrency community.
Crypto-influencers, and the media in general, seem to be more focused on the next dog-themed coin or the next offering of non-fungible tokens (NFTs) based on monkeys. Crypto-focused social groups, such as community subreddits, often focus on subassets and decentralized applications (DApps) built on other platforms. For them, bitcoin is boring; A great proof of concept for blockchain technology, but nothing more than that. This is further demonstrated by the tendency of most people to compare bitcoin to gold; While it’s a reasonable, and sometimes even accurate, comparison, it paints bitcoin as a simple financial asset, something to keep and forget.
This is in contrast to platforms like Ethereum and its sub-chains, which are seen as a creative marvel much like the “tech” stocks on the New York Stock Exchange. Thus, for those of us who are looking to expand Bitcoin ideas by educating others about it, the question we often have to answer is: Why Bitcoin?
There are certainly two camps in the pro-bitcoin community: those who believe that Bitcoin’s best way to compete with other networks is to expand its smart contract and decentralized finance (DeFi) capabilities, and those who believe that Bitcoin’s purpose goes beyond that. from other cryptocurrencies. In fact, Guillaume Girard recently wrote a piece in Bitcoin Magazine Addressing this split, he painted the former as “progressive” bitcoin and the latter as “conservative” bitcoin. While I am definitely against political labels for anything Bitcoin related, I think this is an apt description. Much like the traditional political divide, members of both parties believe that their philosophies and ideas will ultimately be best for Bitcoin’s evolution, helping it fend off other platforms. But, like most political discussions, one line of reasoning is certainly more beneficial to Bitcoin’s growth than the other, at least in the short term.
The truth is: Bitcoin was not meant to be a smart contract or DeFi platform.
While the innovation being done on the Lightning Network is certainly amazing, and has enabled developers to build more on the Bitcoin blockchain, Bitcoin should not compete with other chains. Having previously built on alternative chains, I believe I can share a unique perspective regarding Bitcoin’s current market position, and why Bitcoin is, and will continue to be, the digital asset that underpins our financial revolution. Alternate chains are very similar to application layers: they are designed not to run financial assets, but to run applications on the chain. This is especially true of modern blockchain networks that often compete with each other to attract developers, have the largest number of DApps on-chain and have the highest transactions per second (TPS).
These networks thrive by creating DeFi and NFT platforms: more money is locked into an on-chain smart contract that promises high annual returns (APY), is spent on the next on-chain Shiba or is spent buying on-chain NFTs market, the traffic and the overall value of the network increases. Smart contracts certainly have a place in our future: they help (although not as much as many might think) to decentralize and create an open source Internet. In fact, the Lightning Network is helping drive the creation of smart contract DApps on the Bitcoin blockchain, and more and more developers are slowly flocking to Bitcoin to build on Lightning.
The purpose of this article is not to make fun of smart contracts or even discourage the adoption of smart contracts by the Bitcoin ecosystem. (I actually believe that DApps, although currently in their infancy, will one day form an important part of internet-based applications.) Instead, they provide an alternative view of thinking about Bitcoin in relation to other blockchains. Bitcoin, at its core, is an alternative financial system powered in part by blockchain technology, but also by a community of people willing to fight for their financial independence, and who passionately believe in the vision created by Satoshi Nakamoto 13 years ago. In fact, the Bitcoin white paper makes no mention of on-chain applications or smart contracts; Bitcoin defines what it is: a decentralized payment system that allows users to send transactions anonymously over a peer-to-peer network without the need for intermediaries.
While the Bitcoin consensus mechanism may be slower and more energy-intensive than others, it is the most socially and economically sound. The value of Bitcoin derives in part from the commitment to a scarce resource (computing power), and is equitably distributed to those who spend that scarce resource on network maintenance (miners). Bitcoin’s scripting language is intentionally limited: its original creators did not complete the Turing script because it was intended to allow users to create more complex financial transactions, not build large-scale applications that could be exploited (and often on other platforms). Bitcoin is and always will be a peer-to-peer financial system. Her ideology and community will always be associated in part with the Cyphronics, who believe in a freer and more private society.
So, the next time you hear “Why Bitcoin?” Compared to other cryptocurrencies on social media, in the office or at the dinner table, encourage your colleagues to look beyond digital metrics like TPS, the number of dog coins generated on the platform, or the APY offered through the DeFi protocol on Favorite new alternate series. Ask them instead to think about the philosophy of Bitcoin, the motivation behind its creation, and its ultimate goal.
Shifting one’s perspective from viewing the cryptocurrency space as a tool for financial investment to seeing it as a movement for financial freedom is certainly difficult, but if they are willing to take that next step, then they will undergo the same transformation that the majority of the Bitcoin community has undergone, Including me, they should go through and become a real Bitcoin customer.
This is a guest post by Archie Choudary. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.