The rise of cryptocurrency as a mainstream pop culture phenomenon has certainly transformed the overall blockchain ecosystem for the better; more people than ever before are actively participating and aware of the technology, institutions that once rejected cryptocurrency are investing millions of dollars in it, and even “old-school” strongholds such as JP Morgan and Goldman Sachs are releasing reports on the performance of various digital assets.
Yet, the general acceptance of blockchain technology has also brought downsides. While the space’s initial growth in 2017 was centered around bitcoin (it was the first time many people, myself included, discovered bitcoin), recent growth has been more centered around alternative platforms. While bitcoin has certainly grown in value over the past couple of years, it has almost become a given within the broader cryptocurrency community.
Cryptocurrency influencers, and the media in general, seem to be more focused on the next dog-themed coin or the upcoming monkey-based non-fungible token (NFT) rollout. Cryptocurrency-focused social groups, such as community subreddits, often focus on sub-assets and decentralized applications (DApps) built on other platforms. For them, bitcoin is boring; a great proof of concept for blockchain technology, but nothing more. This is made all the more evident by the tendency of most to compare bitcoin to gold; while this is a plausible, and even sometimes accurate, comparison, it paints bitcoin as simply a financial asset, something to hold and forget.
This contrasts with platforms such as Ethereum and its subchains, which are considered innovative marvels, much like “tech” stock on the New York Stock Exchange. So, for those of us looking to expand the ideas of bitcoin by educating others about them, the question we often have to answer is, why bitcoin?
There are certainly two camps in the pro-Bitcoin community: those who believe that the best way for Bitcoin to compete with other networks is to expand its smart contract and decentralized finance (DeFi) capabilities, and those who believe that the purpose of Bitcoin goes beyond that. other cryptocurrencies. Indeed, Guillaume Girard recently wrote a piece in Bitcoin Magazine addressing this divide, portraying the former as Bitcoin “progressives” and the latter as Bitcoin “conservatives”. While I’m certainly against political labels for anything Bitcoin, I think that’s an apt description. Much like a traditional political split, members of both parties believe that their philosophies and ideas will ultimately be better for Bitcoin’s evolution, helping it steer clear of other platforms. But, like most political discussions, one way of thinking is certainly more useful for Bitcoin’s growth than the other, at least in the short term.
The truth is, Bitcoin was never meant to be a smart contract or a DeFi platform.
While the innovation on the Lightning Network is certainly amazing and has allowed developers to rely more on the Bitcoin blockchain, Bitcoin should not compete with other chains. Having already built on alternative chains, I believe I can share a unique perspective regarding Bitcoin’s current position in the market, and why Bitcoin is, and will remain, the digital asset that fuels our financial revolution. Alternative chains are very similar to application layers: they are not designed to power financial assets, but to power on-chain applications. This is especially true for modern blockchain networks which often compete for developers, have the most on-chain DApps, and have the highest transactions per second (TPS).
These networks thrive on the creation of DeFi and NFT platforms: as more money is locked into an on-chain yield smart contract promising high annual percentage returns (APY), spent on the next on-chain Shiba or spent to purchase NFTs in an on-chain market, traffic and overall network value increase. Smart contracts certainly have a place in our future: they help (though not as much as most might think) to decentralize and create an open-source Internet. In fact, the Lightning Network is helping fuel the creation of smart contract-powered DApps on the Bitcoin blockchain, and more and more developers are slowly moving back to Bitcoin to build on Lightning.
The purpose of this article is not to deride 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 be a major part of internet-based applications.) Rather, it is to provide an alternative view of Bitcoin thinking compared to other blockchains. . Bitcoin, at its core, is an alternative financial system supported 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 that Satoshi Nakamoto created 13 years ago. years. In fact, the Bitcoin white paper makes no mention of on-chain applications or smart contracts; it defines Bitcoin for 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.
Although Bitcoin’s consensus mechanism may be slower and more energy-intensive than others, it is the most socio-economically sound. Bitcoin’s value comes in part from the commitment of a scarce resource (computing power), and it is evenly distributed among those who spend said scarce resource on maintaining the network (miners). Bitcoin’s scripting language is intentionally limited: its original creator(s) did not make the Turing script complete because it was intended to allow users to create more complex financial transactions, not to create large-scale applications that could be exploited (and are often on other platforms). Bitcoin is, and always will be, a peer-to-peer financial system. Its ideology and community will always be partly tied to cypherpunks, who believed 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 table, encourage your peers to look beyond numerical metrics such as TPS, number of dog coins created on a platform or APY provided by a DeFi protocol on their new favorite alternative channel. Instead, ask them to think about the philosophy of Bitcoin, the motivation behind its creation, and its end goal.
Transforming their perspective from viewing the cryptocurrency space as a financial investment tool to viewing it as a movement for financial freedom is certainly difficult, but if they are willing to take that next step, they will experience the same transformation that a majority of members of the Bitcoin community, including myself, had to go through and become true Bitcoiners.
This is a guest post by Archie Chaudhury. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.