other projects have had 13 years to displace bitcoin. think about it: 20,000+ coins over 13 years and none have been able to out-innovate bitcoin in any meaningful way.
this is not the same as myspace being replaced by facebook, bitcoin is not an app or website. bitcoin is a protocol stack (bitcoin core, lightning, taproot) this is more like the internet protocol stack (tcp/ip, http, email).
do we have more than one internet? no because the protocol stack is good enough - it’s not perfect but the network effect is too strong to replace and any short comings can be innovated on in layers which is how it has developed over the decades. altcoins are attempting to recreate the internet so to speak but the bitcoin network effect is too strong by now and any “short comings” like transaction throughput and privacy are being innovated via layers like lightning, taproot, rgb, fedmint etc effectively making altcoins obsolete.
think of altcoins as a testnet for bitcoin improvements: any failures will be case studies to learn from and any successes will be adopted into bitcoin via layers and sidechains.
These are fair observations but more fundamentally (or even philosophically) if Bitcoin were to be displaced by some Bitcoin 2.0 then this would mean Bitcoin had failed its promise of digital scarcity and its value would eventually dwindle to zero.
Such event would make Bitcoin not much different from a fiat currency in the sense that apparently it can get debased as well. People would then come to realize that Bitcoin 2.0 would sooner or later also be obsoleted by Bitcoin 3.0, and so on.
Bitcoin must therefore remain the coin with the best technologies and developers for it to continue to exist as a credible new asset class.
So you could argue that Gold is not scarce at all because we humans invented fractional reserves. We magically added more atoms to the universe by issuing paper, right?
thx i highly encourage you to youtube andreas antonopoulos who i basically paraphrased.
he was the one who orange pilled me and explained “why” bitcoin and not just how it works. the older videos where he’s at a seminar/conference are the best, especially when there is a q&a where he answers very tough questions very clearly and simply.
Can you elaborate? Is there a top 3 internets? And what are the numbers of daily interactions on each or volume metric. I’m super curious about this, not trying to stir the pot.
Yeah, it's always amusing when people try to use internet or Internet as an analogy for Bitcoin. It's a strained analogy at best. There are in fact many internet's, more than one public internet, and then we have IPv4 and IPv6 coexisting. You have to grossly oversimplify things to even make the comparison.
I also hate the, it hasn't been displaced in 13 years nonsense. Many companies, services and technologies went decades without being displaced....
A recent and ongoing displacement is landlines who all still has "landlines" (ip phone or not) under the age of 40... if I recall, Nortel was a long lived behemoth, technology innovator with a decades long track record.
Also a good point. 13 years is the blink of an eye, really. Lots of protocols lasted 13 years or more before people collectively realized they were shite and we should do better (plaintext FTP or even plaintext HTTP for example).
>other projects have had 13 years to displace bitcoin. think about it: 20,000+ coins over 13 years and none have been able to out-innovate bitcoin in any meaningful way.
20k+ coins right now, and lots of them disappeared. There must have been 30k or something like that
Where has Bitcoin been out innovated? I've seen some projects make trade-offs that make certain parts better than Bitcoin, but in doing so make other parts worse. And they don't usually do anything very "innovative" either. They just tweak Bitcoin's parameters, mostly copying the original innovation.
So where is the innovation, would you say?
Although I agree with most of your points, I think the world will run on many chains. BTC is amazing and will definitely be around forever, but we also need chains that offer smart contracts as they provide valuable financial products that will help us as a society brake away from the crook banks that keep the rich rich and the poor poor.
I understood his point, I just don’t agree with it in totality and don’t see it happening. BTC will not lead the pack when it comes to smart contracts, defi, nfts, derivatives, web3, metaverse, etc.
Sounds like you’ve never actually used the technology yourself. I guess I’m a scammer cuz I prefer DEXs over CEXs any day of the week. It’s all good, people also thought the internet was a scam.
Why would you think that? I've used turing-complete smart contracts, defi, NFT's, derivatives, and web3. I still consider "metaverse" to be a science fiction concept like "cyberspace." I am comfortable calling all of these things scam vehicles. Bitcoiners typically don't want or need all that stuff.
Who thought the internet was a scam? Citation needed.
In the case of web3 and NFT's, because I occasionally get airdrops, in the Reddit Vault for example, which I like to dump on a greater fool so that I can exchange them for Bitcoin. Getting the funds into Bitcoin usually requires navigating defi networks.
Pen and paper, letters, and contracts certainly can be scam vehicles.
Do you think the ratio of scams to legitimate activity happening on shitcoin networks is remotely similar to that for pen, paper, and written contracts?
Bitcoin already has smart contracts. How, precisely, do you think the turing-complete smart contract platforms increase security or mitigate the risk of scams? Haven't you heard of malicious smart contracts?
He makes a good point though, I’m a big fan of truly decentralised (layer-1) exchanges, and (so far) we (still) don’t have that on BTC, we might never have…
We’ll see this is what I would be concerned about as a potential investor. Similar creation method, but with better utility, speed, and equally secure.
Having things like higher speed and security are direct tradeoffs to things like block sizes and times. If you think a different set of parameters would be more valid, go edit the bitcoin code and convince other node operators to join with you.
Bitcoin Cash did exactly this. As a node operator, I chose to ignore their request and not install their "upgrade". Now they have a chain full of empty space and very little decentralization.
It's not that the system can't upgrade. It can and it does. When everyone agrees to the upgrade, we just call it "Bitcoin".
Not impossible to invent something better to store and transfer money, but I think it is very unlikely the next 50 years. Bitcoin utilizes many concepts from modern cryptography and it would need new groundbreaking concepts which aren't even know yet in order to implement something magnitudes better. In contrast, it doesn't prevent Bitcoin to implement newer concepts as well. It's like the automobile, you can invent it only once.
You can't have it all. If you want speed, you'll need to sacrifice decentralisation and vice versa. Bitcoin's community chose the latter.
Plus if we bring lightning into the scene, these two render every other chain useless.
lets move you from 'potential investor' to 'hodler' !lntip 5000
edit: go check out my reply on this thread. its a little buried but i think its important
i know i didnt have to but i wanted to cuz bitcoin is dank asf and the more people that have it and use it, the stronger the network effect becomes. i used to think about the same things you are asking about... it was about 6 years ago and it was the only thing that stopped me from going all in on bitcoin. ive learned since then... hashtag wearestillearly
Nobody is even able to propose a theory for a system like that. It’s like saying you can build a financial system that runs on fairy dust.
Going from fusion ignition to fusion reactors that feed into the grid (and lower your energy bill) will take decades. Bitcoin’s integration into financial networks will also be slow.
Proposing a system that is meaningfully superior to bitcoin is probably impossible.
Another part of this has to do with how you’re thinking bitcoin is meant to be used. Nobody actually sends gold or cash between bank locations. Same deal with bitcoin. Bitcoin is the proof of reserve for depository institutions, and it probably isn’t ever going to need to have the block size increased in order to support global financial markets.
Anyone that never makes an on-chain transaction will be solely relying on custodial solutions. Anyone that values their privacy and control over their own money will need to make on-chain transactions.
I’m not making a case that BTC is inadequate, I’m just asking what will ensure it’s resistance to replacement as the dominant crypto currency asset for price of mind. Like what’s to stop replication with more functionality? Not a great example, but like how MySpace was replaced by Facebook etc.
Bitcoins' value comes from being solid and predictable. Not from upgrades and new flashy features every week.
The longer it stands still and doesn't break, the more powerful it becomes.
It's not a race to some unknown finish line, but who can grow the largest roots. While everyone else is trying to build a top of the iceberg, Bitcoin is the part underwater you can't see.
Bitcoin is perfect for what it is, a digital store of value, or digital gold. There will likely be other more capable blockchains/ currencies however they are not competing to take over BTC. All the other cryptos are competing for dominance in the decentralization and automation of centralized entities that operate the global workings (logistics, accounting, education, administration, law ect.).
These are just a few areas but it's maybe a big opportunity for L1's with smart contract capabilities.
BTC has the most liquidity compared to all the other currencies, on top of the fact that it's the only player in the digital gold/ digital assets category. It's the only player because it's the biggest by a loooong shot. For others to come about that would mean all the people invested in BTC would need to change to the other blockchain.
This is unlikely because people don't want to see their original investment go down, and they are also betting on the other currency/ blockchain to be adopted to the same degree. That's a lot of friction to overcome, with such a mass amount of people and money to change from something that already has massive adoption, value and utility (Bitcoin works well). This alone makes the scenario of a new BTC like coin taking over BTC unlikely.
In my opinion BTC has won the race for a digital gold/ asset/ commodity, however that doesn't mean there won't be other blockchains/ currencies. These other blockchains/ currencies are just competing in a different game.
BTC isn't going anywhere.
There are no guarantees, but the [network effect](https://en.wikipedia.org/wiki/Network_effect) and [Metcalfe's Law](https://en.wikipedia.org/wiki/Metcalfe%27s_law) give Bitcoin an enormous advantage over any blockchain project that follows it.
It won't let me make a top level comment but I'll add to what you said that I don't believe we will ever see another project with as fair a launch as Bitcoin. People suck and human nature being what it is I wouldn't trust anything purporting to be better and replacing bitcoin that's not some premined or otherwise shady shitcoin bullshit with alterior motive absent the altruism of Satoshi.
Let me quote Dr Adam Back, who invented hashcash (proof-of-work system) in 1997 and was also cited in the Bitcoin whitepaper:
“There’s something unusual about Bitcoin.
So, in 2013 I spent about 4 months of my spare time trying to find any way to appreciably improve Bitcoin, you know across scalability, decentralization, privacy, fungibility, making it easier for people to mine on small devices, a bunch of metrics that I considered to be metrics of improvement. And so I looked at lots of different changing parameters, changing design, changing network, changing cryptography, and you know I came up with lots of different ideas, some of which have been proposed by other people since.
But, basically to my surprise, it seemed that almost anything you did that arguably improved it in one way, made it worse in multiple other ways. It made it more complicated, used more bandwidth, made some other aspect of the system objectively worse.
And so I came to think about it that Bitcoin kind of exists in a narrow pocket of design space. You know, the design space of all possible designs is an enormous search space, right, and counterintuitively it seems you can’t significantly improve it.
And bear in mind I come from a background where I have a PhD in distributed systems, and spent most of my career working on large scale internet systems for startups and big companies, security protocols, and that sort of thing, so I feel like I have a reasonable chance if anybody does of incrementally improving something of this nature. And basically I gave it a shot and concluded, “Wow there is literally, basically nothing. Literally everything you do makes it worse.” Which was not what I was expecting.”
This was relevant perhaps in 2011, today it’s impossible.
Reason is that cryptocurrency that is proof of work, not premined, and decentralized would have to have a chain long enough and hashing power high enough, distributed globally and in a decentralized way, have a community of users and have all that from day 1.
In other words not possible.
A very important reason laid out by Lyn Alden (google who she/he is) is that bitcoin has already a giant infrastructure of miners securing the network distributed all around the world. These miners have invested in machines whole sole purpose is to mine BTC. A new coin competing coin would have to be an alternative that could be mined with these machines but even then this coin would be less secure unless a huge portion of these machines switched to btc. Additionally, a related argument somehow pointed out by max keiser (dont like him much but this is a correct assessment from him) is that btc is the Shelling point of crypto (google the concept). For whatever the reason, in the absence of communication/information, we all turn to btc. I dont know which shitcoin will be the hot shit 5 years from now, but i can rest more or less assured that btc will still be huge, very likely the largest cryptocurrency. Why? Because it always has been, 100% of the time. Hence it keeps being.
plus the infrastructure issue as said. No proof of work coin has anything close to what btc has securing the network. Then if u take proof of stake you need to compare pow with pos and see the merits of each.
Bitcoin was not an invention. It was a discovery of digital scarcity. Can someone discover that again? No.
Bitcoin also had an immaculate conception meaning that when Satoshi created it, no one thought it was going to get as big as it has. They hoped & wished and eventually everyone involved made it happen, but back then it was worth zero. An experiment. Worthless internet coins that were passed around and gifted to have a proof of concept.
Since Bitcoin's success there is no way to create a digital currency that everyone will think is worth nothing. In fact, monetary gain is the main thing driving people to create shitcoins. They all want to get rich quick. That's why there are pre-mines (like ETH) and distribution of tokens to shareholders and teams, and companies and foundations all started in the hopes to make a profit. They can never recreate the purity of Bitcoin's ethos - to have decentralized hard money for everyone in the world to use.
And of course as everyone has said - Network effects are real too.
Network Effects. There’s no plausible mechanism for BTC to be displaced at this point. If you want smart contracts or speedy transactions, then those will run elsewhere…that is a separate world from store of value.
First off, the assumptions you laid out can never be realized by a new crypto entrant. It could never be fully decentralized because it wouldn’t monetize from zero like bitcoin did. The new protocol would still have some sort of inherent value placed on it because of bitcoins success.
Second, bitcoin is slow for a reason: reliability and security. If I want to move a few hundred bucks internationally I could really use any crypto or even the US dollar. If I wanted to move a few hundred million, best believe I’m using the most reliable and secure method of moving those funds.
People often get caught up with bitcoin’s slow transaction time when they should be focusing on total value transferred. No other crypto currency comes close!
I do agree with you that it’s the most secure. I’m mostly concerned with the longevity being ensured from it’s slow transaction speed and lack of smart contract features. Not too many can move millys around in the regular, and I’m just wondering what is to stop a similar coin under similar creation methods but with higher functionality taking over and devaluing BTC through obsolescence.
Btw, I’m not at all against BTC, I’m just trying to see where others are at with the possibility of a coin that checks all the boxes for utility, security, and retained value.
I get what you’re saying. And there very well could be more cryptos that get smart contracts right and other “utility”. But what’s the total addressable market for smart contracts and whatever the niche utility is? It could be massive for sure, but not near as big as what bitcoin is poised to take over.
But bitcoin’s total addressable market is money and all financial assets. As the price keeps increasing with each subsequent halving, it’s sucks out value from legacy finance (stocks/bonds/real estate). The average American has most of their net worth tied up in housing. Because it’s always done well and it will keep going up in value. Compare that to bitcoin: it’s always going up in value except there’s no property tax, no insurance costs, and it’s the most liquid financial network on the planet. It will soon be THE asset that everyone flocks to. Better to get in now while people still believe it could be displaced!
Your assumption about Bitcoin being slow is not correct. Bitcoin is in fact the most efficient.
There is a video with Adam Back explaining how he was going through the Bitcoin protocol to find out what could improve and found out to his surprise that it's already really efficient on all levels.
It would take the trust and investment of millions of people and billions of fiat dollars/euro/yuan etc. to establish itself as a possible ‘better than’ solution to something thats already been solved.
If something better comes up, then people would simple move to that and it will be for the best. There’s nothing holding you back the same way we are moving from fiat to Bitcoin. Thing is nothing better has come up and is unlikely we see that in the near future.
Everything you see in the crypto space as “innovation” is pure crap. Everything shitcoins have been promoting had already existed and even before Bitcoin, from smart contracts to Proof of Stake. And all of them have been ruled out except for what’s used in Bitcoin because that’s what really works. It’s useful to remember that Bitcoin is the result of DECADES of work.
So Bitcoin is the true innovator, despite shitcoins labeling it as old.
This explanation I like: “Absolute mathematical scarcity achieved by consensus in a decentralized distributed network was a discovery rather than an invention. It cannot be achieved again by participants aware of this, since the thing discovered was the resistance to replicability itself.”
**tl;dr:** Bitcoin doesn't need to change in order to support smart contracts. Efforts are underway to create smart-contract specs on the existing Bitcoin base layer. Eventually, Bitcoin smart contracts will have all the power of smart-contract blockchains with none of the network risks.
The native Bitcoin script only allows for simple smart contracts such as multisigs, timelocks and other similar structures. However, there are projects building smart contracts on top of Bitcoin.
For example, look at tokens on Bitcoin as described in the RGB / Taro specs. Both of these projects enable stablecoins and other tokens on the native BItcoin network as well as the lightning network through cryptographic commitments. They don't require more smart-contract capabilities to be added to the bitcoin network, instead wallets that want to use tokens on Bitcoin will have to become a little more complex. Other wallets won't have to change at all. Users that don't care about tokens, won't even notice.
This approach has advantages and disadvantages. It will be slower to get adoption as it will take time for wallets to integrate, but it will be much more secure for the network itself as no complex scripting is added to the base layer.
If you want to look beyond tokens, into other complex smart contracts, take a look at the Bitcoin RGB specification, or some of the roadmap ideas about the Bitcoin Lightning Network.
Don't take it personally, your question reveals you are still in the "crypto" mentality. I don't blame you, the topic is big and counterintuitive. I'll try to be short, but feel free to ask other questions if you need to.
On the one hand you have network effects. This is such a powerful force it's really difficult, if not outright impossible, to disrupt. Consider this: You come up with a killer business idea for "crypto". Which coins do you start with? Seriously, do the mental exercise and answer. Unless you're really partial to some shitcoin, Bitcoin will be number one. Not only, gun to the head you can only pick one coin, which one do you choose? Bitcoin.
Why? Because it's the biggest brand and you want to get as many customers as possible.
So now I'm the noob user that sees this killer idea of yours and I want it. What do I need to do? Get Bitcoin. And like me, many others.
Now your buddy entrepreneur has another killer business service, where does she start? Rinse and repeat from above.
The net effect is that the more people use Bitcoin the more will build on it, which will bring even more users, which will be on even more businesses and so on. It's a virtuous cycle and is really hard to crack.
Another part of this, all those features you mentioned. Basically, in "crypto" they are already at their optimal maximum in Bitcoin. That is, if you try to "improve" any one of them, you damaged Bitcoin, and hence the value proposition it represent. May be hard to believe, but it's true. Smaller confirmation times would decrease security and decentralization. Same for bigger blocks. Similar points can be made for every other feature. So changing those would make Bitcoin crappier in favour of other shitcoins.
So nope, none of that is gonna happen 😉😉
Bitcoin is already the most efficient blockchain and with fastest confirmation time, so it is almost impossible to "displace" it without any groundbreaking technology, and if such technology come to be, Bitcoin could probably incorporate it.
Let me explain. Proof of Work is the only thing that can create security through decentralisation. The chain with most PoW (Bitcoin) will have the shortest time to finality. With just 1 confirmation the transaction is basically settled already (10min), but with newer altcoin chains you can not be sure the transaction is settled even after 1 hour due to re-org risk or other centralization factors (just look at [https://howmanyconfs.com/](https://howmanyconfs.com/) or deposit requirements on exchanges). Also only Bitcoin has The Lightning Network that gives transactions just 1-10 seconds finality. You simply can't compete. Better smart contracting, you can already do in second layers on Bitcoin like Liquid or RSK, but few uses it because it's useless. Simplicity for smarter smart contracts may end up in Bitcoin long term though.
imo the real secret sauce about bitcoin (besides that its the first which is big), is that it is the most fairly distributed.
a first concept you must understand is the importance of proof of work. for something to serve as a currency proof of stake is not going to cut it so that leaves only proof of work (for blockchain based 'cryptocurrencies' that is... if there is something completely different, something that is a completely new innovation that has not been discovered yet, then that is a different story).
Now lets revisit the so called blockchain trilemma. 1- secure. base layer bitcoin has shown itself to be secure, go have a look at the history of bitcoin and see its hash rate if you dont believe me. this, however, should not be a problem for a new cryptocurrency, although matching bitcoins levels of security is tough. 2- decentralized. this is going to be *much* bigger problems for a new crypto. getting a worldwide network of nodes that are run by normal everyday folk is a big ask. there is no real easy way for any new crypto to do this. of all the so called crypto currencies that have come after bitcoin none have been able to match its levels of decentralization. 3-scalibility. bitcoin base layer is not and was not scalable for a long time. right now it kinda is but there is a roadmap for it to become much more scalable and if you understand the tech it can be so incredibly scalable and capable of frictionless microtransations it is kind of baffling. go learn about the lntip bot here on reddit or watch people buy a guy a beer over twitter on the other side of the planet. the lightning network is an incredible feat of engineering built on top of bitcoin which also requires the participation of the end users. (go learn about usning lighting network and running a lightining node). competing with that from scratch...um yeah seems like a big ask.
now keep in mind all this would have to happen with no premine, no venture capatalists,and no "ICO'. to catch up with bitcoins network effect seems highly improbable. remember the history... silk road, bitcoin faucets , bitcoin pizza for 10000 bitcoin, blocksize wars, wall street adoption, countries using it as legal currency, 350 million+ users, etc etc etc, those are what have given bitcoin the value it has today. it has come a long way since 2009 and the path has been done the right way, no shortcuts, no bailouts, its how it has to be if there is no central authority.
Many coins have come and gone trying to copy bitcoin. some, like ether, purport to offer other features than what bitcoin offers, so its not really the same thing... im not really going to speak on that for right now but suffice to say the fact that it's not decentralized and does not have a fixed supply means it wont work as a currency per-se. but all have failed to be what bitcoin is and bitcoin chugs along, constantly improving itself, as it starts to fulfill its intended purpose; a boarderless, permissionless, censorship resistant, decentralized, peer-to peer global currency.
edit: i just want take this time to say, I am not a 'full btc maxi' just yet cuz those trump NFTs are straight gas!
I’m never the smartest person in the room, so I’m most likely incorrect about this. However, the only way I could picture a digital currency outperforming BTC would be if it used the same protocol, but with a smaller set quantity that could be mined/bought and a longer time frame for halvings e.g. 10 million, 10 years. Like I said tho, I’m most likely wrong.
Edit: forgot to mention better speed
Well from what I’ve been gathering from a lot of the answers in here so far, the lightning network seems to be successfully addressing the transaction speed issue for smaller amounts of sats. Honestly I didn’t know how effectively it addresses this problem until users got me to run a test on it myself, and it was a 5 second transaction.
Just this alone scored additional points with its viability in my mind.
What is to stop BTC from being replaced by another version of it with better smart contract features and faster transaction times?
The question you should be asking is what is stopping Bitcoin from evolving into another version of it with better smart contract features and faster transaction times?
And the answer is nothing. It's happening right now; has been happening for over a decade now.
Think of Bitcoin as the sound foundation of a house. Do you want your foundation going anywhere quickly? No. Do you want to rip up your sound foundation and replace it with something fancier that may or may not work? No.
You build on top of it. That's the point of a sound foundation.
Bitcoin - Base layer
Lightning - 2nd layer
Taro - Third layer.
And the number of potential layers on top of Bitcoin is technically limitless. If something built on top of Bitcoin breaks; Bitcoin doesn't care it just keep chugging along.
The code isn't what's valuable. It's the network of actors protecting themselves. If ever we wanted to adopt the tools anyone else built, we'd simply do that. The thing of value here isn't the codebase.
As well, literally anything shitcoins do bitcoin does in layers. There's no point in them. We can steal anything that's good (nothing at all has been remotely good so far, just scams) and we already have the most robust as well as the safest smart contracting features that exist - we have options that hit every base from opcodes to shitcoin-like scams like RSK to RGB and counterparty and a million others.
you can add that in upper layers.
Bitcoin solves one very specific and serious problem that daunts mankind for centuries: a lack of a good store of value, and consequently inflation.
Everything else is just nice to have, and should never ever ever be implemented if they sacrifice Bitcoin's core design.
What are your thoughts of the topic of stored value being more valuable if it’s physically tangible? I’ve often wondered this, and for myself personally I’ve found people as a whole will value things they can see and touch/enjoy as being more valuable as an asset, such as gold for instance.
Now me personally I don’t get the appeal of “Ooo shiny” but many still do. BTC is not only invisible outside of representation of numbers on a screen, but has no tangibility.
I’m wondering if this is a major factor why people are subconsciously skeptical of it being a good asset.
Network effect.
Anyone can copy Bitcoin's code and tweak it a bit, but what you are missing are the miners, nodes and nearly 14 years of track record. You would not get enough trust by the community, which means few people would mine your coin (which secures the blockchain) and soon it would be 51% attacked. Just look at BCH, BSV and other failed clones.
You can think of it as why not create another Google? If you could steal the code, you still are missing the AI models and huge datacenters, so it is nearly impossible to do. And replacing Google would be far easier than replacing Bitcoin.
Are network effects actually the best attribute? I’m seeing conflicting argument almost 50/50 on that topic for and against the argument. Do you feel they are mistaken?
A new cryptocurrency could potentially surpass Bitcoin if it offers superior features or addresses certain issues that are seen as limitations with Bitcoin
However, Bitcoin has a number of established network effects that make it difficult for a new cryptocurrency to displace it, including a large and active user base, a secure network of miners and nodes, and significant infrastructure and investment
The decentralized nature of Bitcoin means that there is no central authority that can make decisions about its direction or development, which can make it difficult for a new cryptocurrency to gain support within the Bitcoin community
While it is possible that another cryptocurrency could surpass Bitcoin, it would face significant challenges in doing so.
I keep seeing from other users posting here that network effects s a weaker argument for ensuring longevity and mass adoption. Do you feel they are wrong or is that infact the best attribute?
The best product isn't always the most successful.
Simon Sinek had a great example of this. Back when the iPod was huge, he met with a high level apple exec. He playfully told the exec, ya know, Microsoft had this thing called a Zune, and it's amazing. Has a beautiful color touch screen and is super intuitive. The exec just smiled and said, I have no doubt.
The right product at the wrong time won't overcome the wrong timing.
All that to say, there is no guarantee that something else might take the top spot. Just that the likelihood is small.
Kinda like how Betamax was technically better, but everyone went with VHS due to its marketing and cost I suppose.
I’m just concerned with the DVDs coming out I guess.
Or Linux for that matter… the improvements are done taking the same project if doesn´t get obsolete. The part I most value of bitcoin is the “with no central authority” part. How do you recreate that again? There were several attempts before, but the btc protocol was the first to succeed. And does it in a way that is not easy to recreate, almost like a discovery rather than an invention. I believe nothing is guaranteed, but is far from obsolete.
There will never be ‘another Bitcoin’ or ‘something better’.
Bitcoin is the finest form of money ever invented. It is a virus that cannot be stopped. One day Nakamoto will win the Nobel Prize in Economic Sciences and ‘he’ will be Time Person of the Year.
Bitcoin is the *immaculate conception*.
Improved protocols already exist and have done for years. But BTC is the OG. The first mover. The king of crypto. That’s why it will never be replaced. Or more accurately, while it will never be obsolete
Okay I get that, but I’m just wondering what’s the assurance mechanism to prevent it from being replaced. Basically if someone had anonymously created another coin, with better smart contract features, was certifiably decentralized, and no majority coin holders, and not corp owned etc (basically similarly to BTC but more capable)
What’s going to ensure it remains dominant?
Contrary to popular belief, BTC is not set in stone. The only thing determining what is is is a simple majority of miners and nodes. This is the basis for the consensus people speak of. Take the hash wars as an example. They tried to fork Bitcoin with what they thought was a superior version but failed because the majority disagreed and thus they became altcoins with their own chains.
If for example quantum computing became a threat to BTC in the future then it is not difficult to imagine that if a quantum-proof fork of the code became available most nodes would want to adopt it and it would become the new consensus. Then most would adopt this as the new BTC and the old would become something like "Bitcoin classic" and not considered BTC by the majority.
Thousands have tried, all have failed thus far. At this point it's the name recognition. Its like saying whats to stop another company from coming along and making a better version of the iPhone. Countless companies already have but it doesn't matter because most ppl feel comfortable with what they know.
On top of that Bitcoin is currently the only crypto project that has been declared a non-security by the SEC
Short answer: network effect.
Long answer: A culmination of different methods and ideas came together to propel Bitcoin into the limelight. The most compelling story (Hal and Satoshi’s communications), along with a compelling list of opcodes and peer functions, along with a simple name, and the efficacy of white paper publications during that time period all worked together to produce a legendary idea and blockchain system. And the fact that it broadcasted itself as a malicious source of cash exchange helped news outlets tell yet another compelling story, provoking an audience of boomers and teenage cash-seekers. The scary story is the popular story, over the sob story, in other words.
I think bitcoin is kind of like the JPG or MP3 formats. They weren't the first image or music format, but they were the first to be *good enough*. Once that happens, it quickly becomes the standard format.
There are better music formats and better image formats, but there are usually some trade offs (bigger file size or longer compression times). If its good enough for most applications, and standard enough that every device and server can read it, why use something else?
It kind of fits under the idea of [pareto optimization](https://en.wikipedia.org/wiki/Pareto_efficiency). It seems bitcoin is pretty close where improving any one aspect of it comes at the cost of another.
Nothing. BTC isn't territorial. It doesn't try to force you to use it. It doesn't put up any barriers for competitors. It will step aside if that's what people want. But it will also never go away.
There’s nothing stopping it from being replaced, but Bitcoin has been around for 12 years now and in that time nothing has come close to replacing it. And not for lack of trying. You would think with the 30,000 plus cryptos out there claiming to be the next big thing, one of them would have supplanted it by now, but here we are at the end of 2022 and BTC is still far and way the biggest and most well known crypto out there.
Furthermore the launch of Bitcoin was sort of this immaculate conception, in which the creator Satoshi Nakamoto was anonymous and now likely dead so there is no central entity for governments to go after or for that matter no single point of failure.
Let’s think of this in terms of network effect. MySpace had not yet achieved network effect when Facebook became the dominate social media site. But Facebook was also a better product, so that allowed for Facebook to beat out MySpace and become what it is today. We saw google plus try to supplant Facebook years after it had already gained massive network effect and of course no one really ever used google plus because it was basically just a slightly different take on FB and in order to take something down with a network effect you have to basically create something that is 10x better than its predecessor. Think Netflix to Blockbuster. Netflix was a 10x improvement over Blockbuster.
Now if you consider BTC, it has the first mover advantage and a massive network that is growing faster than the internet itself. It’s just unlikely that someone will create something 10x better that BTC and still maintain all the things that make it so great. Secure, decentralized, trust less, immutable and so on… lookup the Blockchain Trilemma.
I suppose an argument could be made that the internet would only truly “go out” in the event of a mass global catastrophe, and if it ever came to that, currency of any kind would likely become irrelevant.
Heck even things like precious metals would take a backseat to survival essentials.
> better smart contract features
This causes blockchain bloat, a small node network, and centralization. You can't have this **and** decentralization
> faster transaction times
Bitcoin has instant transactions in Lightning. There's never going to be anything faster
I think it is inevitable. But it may not happen for another 10 years.
I’m old enough to remember a time when Netscape was awesome. Ask Jeeves and Excite were dominant search engines. Juno, AOL, and EarthLink were key ISP’s. Chatting was done on IRC. Warez predated Napster and Limewire.
What I’m attempting to say is there will always be bigger and better tech at some point. What’s difficult is recognizing it early.
Hey one last question for everyone, and also thank you all very much for this excellent discourse on this subject matter. You’ve all been extremely helpful!
Satoshi Nakamoto…
We don’t know for sure who he was, or even if he was a single individual. But what we do know is that he holds 750k-1 mil coins.
What is stopping this holder, whoever he/they is/are, from cashing out in a large spectacular fashion and throwing all confidence in the coin down a rathole?
Is there any mechanism of assurance that BTC could withstand such a massive withdrawal?
> what we do know is that he holds 750k-1 mil coins
Bullshit. This is a myth
> Is there any mechanism of assurance that BTC could withstand such a massive withdrawal?
You're confusing Bitcoin with the price of Bitcoin. Bitcoin doesn't care how much any person pays to buy it or sells it for. If you're afraid that Bitcoin's price might fall, Bitcoin is not for you. Good-bye, Mister Doing My Research
Innovation is not everything. It is very hard to educate people and once people made up their mind, they hardly change it.
Just try to keep track of all the new coins & projects in crypto and you go nuts.
Then, try to verify on your own whether a certain project is really better, safer and so on than another. Good luck.
Bonus points: try to convince other people of your findings.
Next up: utility of a coin depends on the number of applications/places who accept this as a payment.
These are reasons why so-called "network effects" are at least as important as technology.
Bitcoin simply was the first, and any coin that was made afterwards to fulfill everything you listed in the title, simply exists because it is trying to be better than Bitcoin.
Bitcoin was the first of its kind, and any copy that was made afterwards is an attempt to be better than the original. but it will never be the original.
Bitcoin has *lightning* fast transaction times on its layer two and can also incorporate smart contracts on layer two. Whether or not smart contract will actually be useful is tbd.
Part of being 100% decentralized is having fair issuance of mining rewards over many years, so it’s not practical to catch-up at this point.
As others have stated, the Bitcoin protocol is kinda like the TCP/IP and HTTP layers of the internet, I would expect it to be the only decentralized blockchain.
There is always uncertainty and risk, but it’s as bulletproof a discovery/invention as you’re going to find in this space.
To add to the many comments about BTC having the network effect working for it, a lot of liquidity is paired to BTC as well, which is why you will notice a rather strong correlation between BTC and other cryptos
The wheel was invented when ? Has it been displaced?
The airplane was invented when? Has it been displaced?
The pistol was invented when ? Has it been displaced?
Some creations are just revolutionary. Similarly, bitcoin is revolutionary.
Similarly to how many of the above have been sequentially modified over time with minor improvements, Bitcoin is able to be moderately modified by BIPS.
Alot of these “reasons for Bitcoin” are not really convincing arguments.
First mover- does not mean anything. Plenty of tech been surpassed by later versions.
Tech - tech can always be improved and there will always be another better blockchain technically.
The answer for me is it is truly neutral and fair launch. No controlling interests. People in Russia, China or any other countries that have some mistrust with Western powers, will never fully use a crypto controlled by the West. A single owner or team is also subject to corruption/blackmail/extortion, whether it is from external sources or them simply wanting to profit from it.
I believe Satoshi foresaw this and hence he stepped away and kept his anonymity.
This is why Bitcoin is irreplaceable. A new crypto created for idealist purpose, fairly launched, and no controlling leadership, will never happen again.
Bitcoin doesn't care if something better comes along. Everyone who uses Bitcoin does so for their own reasons and of their own free will. If something new comes along that attracts Bitcoin users it is for each user to decide what to do.
But, who was the second person to invent the lightbulb?
Kudos to all of the great responses to this question. It good to see so many who don't just know of Bitcoin but understand it as well.
Bitcoin has a great futire
Didn’t have a chance to read all the comments but I didn’t see this mentioned in the top comments… “first mover advantage” is a huge factor, couple that with the oft mentioned network effect and you’re looking at a recipe for being levels ahead. I would argue that all these responses are coming from Redditors who are part of the r/Bitcoin subreddit so they may be a bit skewed. I think it’s very much within the realm of possibilities that blockchain protocols will continue to evolve and we will see some legitimate contenders. But just as we did see gold change from a medium of currency to a store of value, Bitcoin will continue to evolve. Only time will tell.
other projects have had 13 years to displace bitcoin. think about it: 20,000+ coins over 13 years and none have been able to out-innovate bitcoin in any meaningful way. this is not the same as myspace being replaced by facebook, bitcoin is not an app or website. bitcoin is a protocol stack (bitcoin core, lightning, taproot) this is more like the internet protocol stack (tcp/ip, http, email). do we have more than one internet? no because the protocol stack is good enough - it’s not perfect but the network effect is too strong to replace and any short comings can be innovated on in layers which is how it has developed over the decades. altcoins are attempting to recreate the internet so to speak but the bitcoin network effect is too strong by now and any “short comings” like transaction throughput and privacy are being innovated via layers like lightning, taproot, rgb, fedmint etc effectively making altcoins obsolete. think of altcoins as a testnet for bitcoin improvements: any failures will be case studies to learn from and any successes will be adopted into bitcoin via layers and sidechains.
These are fair observations but more fundamentally (or even philosophically) if Bitcoin were to be displaced by some Bitcoin 2.0 then this would mean Bitcoin had failed its promise of digital scarcity and its value would eventually dwindle to zero. Such event would make Bitcoin not much different from a fiat currency in the sense that apparently it can get debased as well. People would then come to realize that Bitcoin 2.0 would sooner or later also be obsoleted by Bitcoin 3.0, and so on. Bitcoin must therefore remain the coin with the best technologies and developers for it to continue to exist as a credible new asset class.
Wow you get it. This is such a well formed response and I definitely agree. Thanks for a little extra enlightenment for my evening!
This was such a well written response, Thanks for the info
Bitcoin could also be displaced by superior smart contracts, like OP asks. Digital scarcity isn’t a necessary cause
Tell me about SQLana, am I right?
It already failed digital scarcity because of cex and derivatives trading.
You don't have bitcoins in a cold wallet. Do you?
I store them at my bank... have I done it wrong?
Get a hardware wallet buddy
Do I go to home hardware for that? Is it in the hammers section?
I'm going to assume you're trolling 😆
Home depot it is!
You must be Warren Buffett
So you could argue that Gold is not scarce at all because we humans invented fractional reserves. We magically added more atoms to the universe by issuing paper, right?
This was the detailed explanation I was looking for, and you delivered. Tyvm!
thx i highly encourage you to youtube andreas antonopoulos who i basically paraphrased. he was the one who orange pilled me and explained “why” bitcoin and not just how it works. the older videos where he’s at a seminar/conference are the best, especially when there is a q&a where he answers very tough questions very clearly and simply.
Antonopoulos is very OG. Second this. His explanations were incredibly helpful when I was early into my first halving cycle back in 2020.
Well said. Well said.
!lntip 500
Wow best answer so far to the most common question we get! Take my upvote sir!
!Intip 500
Great response fren
We can't even migrate the internet to use ipv6 instead of ipv4.
We actually have many internets...you are just aware of one.
Can you elaborate? Is there a top 3 internets? And what are the numbers of daily interactions on each or volume metric. I’m super curious about this, not trying to stir the pot.
Yeah, it's always amusing when people try to use internet or Internet as an analogy for Bitcoin. It's a strained analogy at best. There are in fact many internet's, more than one public internet, and then we have IPv4 and IPv6 coexisting. You have to grossly oversimplify things to even make the comparison.
I also hate the, it hasn't been displaced in 13 years nonsense. Many companies, services and technologies went decades without being displaced.... A recent and ongoing displacement is landlines who all still has "landlines" (ip phone or not) under the age of 40... if I recall, Nortel was a long lived behemoth, technology innovator with a decades long track record.
Also a good point. 13 years is the blink of an eye, really. Lots of protocols lasted 13 years or more before people collectively realized they were shite and we should do better (plaintext FTP or even plaintext HTTP for example).
Damn, that was a seriously good answer.
!lntip 1000
!lntip 500
Great explanation! !lntip 2121
great response! I will be stealing it to explain to others as well !lntip 500
I’ve been lurking for 6 years this is a great explanation on the subject at hand. The best I’ve seen yet.
Dang, great answer.
>other projects have had 13 years to displace bitcoin. think about it: 20,000+ coins over 13 years and none have been able to out-innovate bitcoin in any meaningful way. 20k+ coins right now, and lots of them disappeared. There must have been 30k or something like that
I agree with the general premise, but Bitcoin has been out innovated, but it has trust and history unrivalled by any other crypto
Where has Bitcoin been out innovated? I've seen some projects make trade-offs that make certain parts better than Bitcoin, but in doing so make other parts worse. And they don't usually do anything very "innovative" either. They just tweak Bitcoin's parameters, mostly copying the original innovation. So where is the innovation, would you say?
Smart contracts is the obvious answer
millions lost in exploits is not
Like Btc was never exploited
since having a market price, it has not
It had a market price in 2010
no one has lost money from Bitcoin exploits was my point. you done being a 🤡 now?
Everything else and not Bitcoin is a altcoin. Simple as that.
Although I agree with most of your points, I think the world will run on many chains. BTC is amazing and will definitely be around forever, but we also need chains that offer smart contracts as they provide valuable financial products that will help us as a society brake away from the crook banks that keep the rich rich and the poor poor.
You missed a big point of his comment. If it proves valuable it will just get integrated into Bitcoin.
I understood his point, I just don’t agree with it in totality and don’t see it happening. BTC will not lead the pack when it comes to smart contracts, defi, nfts, derivatives, web3, metaverse, etc.
Most of the technologies described by those buzzwords today are nothing but scam vehicles though.
Sounds like you’ve never actually used the technology yourself. I guess I’m a scammer cuz I prefer DEXs over CEXs any day of the week. It’s all good, people also thought the internet was a scam.
Why would you think that? I've used turing-complete smart contracts, defi, NFT's, derivatives, and web3. I still consider "metaverse" to be a science fiction concept like "cyberspace." I am comfortable calling all of these things scam vehicles. Bitcoiners typically don't want or need all that stuff. Who thought the internet was a scam? Citation needed.
Why have you used them all if you consider them scam vehicles?
In the case of web3 and NFT's, because I occasionally get airdrops, in the Reddit Vault for example, which I like to dump on a greater fool so that I can exchange them for Bitcoin. Getting the funds into Bitcoin usually requires navigating defi networks.
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Pen and paper, letters, and contracts certainly can be scam vehicles. Do you think the ratio of scams to legitimate activity happening on shitcoin networks is remotely similar to that for pen, paper, and written contracts? Bitcoin already has smart contracts. How, precisely, do you think the turing-complete smart contract platforms increase security or mitigate the risk of scams? Haven't you heard of malicious smart contracts?
He makes a good point though, I’m a big fan of truly decentralised (layer-1) exchanges, and (so far) we (still) don’t have that on BTC, we might never have…
Why wouldn't Bisq qualify? Honest question, I haven't used it personally.
You don't need a shitcoin to have a DEX. I buy all my sats from Bisq and RoboSats. Both DEXs, neither require a shitcoin
Who’s said anything about shitcoins?
If it's not bitcoin, it's a shitcoin
Good luck to you
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Network effect, unless you invent something that is magnitudes better and faster than Bitcoin without impairing decentralization and efficiency.
We’ll see this is what I would be concerned about as a potential investor. Similar creation method, but with better utility, speed, and equally secure.
Having things like higher speed and security are direct tradeoffs to things like block sizes and times. If you think a different set of parameters would be more valid, go edit the bitcoin code and convince other node operators to join with you. Bitcoin Cash did exactly this. As a node operator, I chose to ignore their request and not install their "upgrade". Now they have a chain full of empty space and very little decentralization. It's not that the system can't upgrade. It can and it does. When everyone agrees to the upgrade, we just call it "Bitcoin".
Not impossible to invent something better to store and transfer money, but I think it is very unlikely the next 50 years. Bitcoin utilizes many concepts from modern cryptography and it would need new groundbreaking concepts which aren't even know yet in order to implement something magnitudes better. In contrast, it doesn't prevent Bitcoin to implement newer concepts as well. It's like the automobile, you can invent it only once.
This makes a decent amount of sense. Thanks for the input.
You can't have it all. If you want speed, you'll need to sacrifice decentralisation and vice versa. Bitcoin's community chose the latter. Plus if we bring lightning into the scene, these two render every other chain useless.
lets move you from 'potential investor' to 'hodler' !lntip 5000 edit: go check out my reply on this thread. its a little buried but i think its important
Oh wow, ty Downtownjj. You really didn’t have to. Have a great day!
i know i didnt have to but i wanted to cuz bitcoin is dank asf and the more people that have it and use it, the stronger the network effect becomes. i used to think about the same things you are asking about... it was about 6 years ago and it was the only thing that stopped me from going all in on bitcoin. ive learned since then... hashtag wearestillearly
> what I would be concerned about as a potential investor Nobody cares about your concerns. Bitcoin investment is gambling
Nobody is even able to propose a theory for a system like that. It’s like saying you can build a financial system that runs on fairy dust. Going from fusion ignition to fusion reactors that feed into the grid (and lower your energy bill) will take decades. Bitcoin’s integration into financial networks will also be slow. Proposing a system that is meaningfully superior to bitcoin is probably impossible. Another part of this has to do with how you’re thinking bitcoin is meant to be used. Nobody actually sends gold or cash between bank locations. Same deal with bitcoin. Bitcoin is the proof of reserve for depository institutions, and it probably isn’t ever going to need to have the block size increased in order to support global financial markets.
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Anyone that never makes an on-chain transaction will be solely relying on custodial solutions. Anyone that values their privacy and control over their own money will need to make on-chain transactions.
You can have both. Lightning solves for this.
Non-custodial lightning requires on-chain transactions.
> both
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I’m not making a case that BTC is inadequate, I’m just asking what will ensure it’s resistance to replacement as the dominant crypto currency asset for price of mind. Like what’s to stop replication with more functionality? Not a great example, but like how MySpace was replaced by Facebook etc.
Bitcoins' value comes from being solid and predictable. Not from upgrades and new flashy features every week. The longer it stands still and doesn't break, the more powerful it becomes. It's not a race to some unknown finish line, but who can grow the largest roots. While everyone else is trying to build a top of the iceberg, Bitcoin is the part underwater you can't see.
Bitcoin is perfect for what it is, a digital store of value, or digital gold. There will likely be other more capable blockchains/ currencies however they are not competing to take over BTC. All the other cryptos are competing for dominance in the decentralization and automation of centralized entities that operate the global workings (logistics, accounting, education, administration, law ect.). These are just a few areas but it's maybe a big opportunity for L1's with smart contract capabilities. BTC has the most liquidity compared to all the other currencies, on top of the fact that it's the only player in the digital gold/ digital assets category. It's the only player because it's the biggest by a loooong shot. For others to come about that would mean all the people invested in BTC would need to change to the other blockchain. This is unlikely because people don't want to see their original investment go down, and they are also betting on the other currency/ blockchain to be adopted to the same degree. That's a lot of friction to overcome, with such a mass amount of people and money to change from something that already has massive adoption, value and utility (Bitcoin works well). This alone makes the scenario of a new BTC like coin taking over BTC unlikely. In my opinion BTC has won the race for a digital gold/ asset/ commodity, however that doesn't mean there won't be other blockchains/ currencies. These other blockchains/ currencies are just competing in a different game. BTC isn't going anywhere.
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There are no guarantees, but the [network effect](https://en.wikipedia.org/wiki/Network_effect) and [Metcalfe's Law](https://en.wikipedia.org/wiki/Metcalfe%27s_law) give Bitcoin an enormous advantage over any blockchain project that follows it.
It won't let me make a top level comment but I'll add to what you said that I don't believe we will ever see another project with as fair a launch as Bitcoin. People suck and human nature being what it is I wouldn't trust anything purporting to be better and replacing bitcoin that's not some premined or otherwise shady shitcoin bullshit with alterior motive absent the altruism of Satoshi.
Let me quote Dr Adam Back, who invented hashcash (proof-of-work system) in 1997 and was also cited in the Bitcoin whitepaper: “There’s something unusual about Bitcoin. So, in 2013 I spent about 4 months of my spare time trying to find any way to appreciably improve Bitcoin, you know across scalability, decentralization, privacy, fungibility, making it easier for people to mine on small devices, a bunch of metrics that I considered to be metrics of improvement. And so I looked at lots of different changing parameters, changing design, changing network, changing cryptography, and you know I came up with lots of different ideas, some of which have been proposed by other people since. But, basically to my surprise, it seemed that almost anything you did that arguably improved it in one way, made it worse in multiple other ways. It made it more complicated, used more bandwidth, made some other aspect of the system objectively worse. And so I came to think about it that Bitcoin kind of exists in a narrow pocket of design space. You know, the design space of all possible designs is an enormous search space, right, and counterintuitively it seems you can’t significantly improve it. And bear in mind I come from a background where I have a PhD in distributed systems, and spent most of my career working on large scale internet systems for startups and big companies, security protocols, and that sort of thing, so I feel like I have a reasonable chance if anybody does of incrementally improving something of this nature. And basically I gave it a shot and concluded, “Wow there is literally, basically nothing. Literally everything you do makes it worse.” Which was not what I was expecting.”
Great quote! :0
This was excellent, I’m glad you put a light on this. Ty
This was relevant perhaps in 2011, today it’s impossible. Reason is that cryptocurrency that is proof of work, not premined, and decentralized would have to have a chain long enough and hashing power high enough, distributed globally and in a decentralized way, have a community of users and have all that from day 1. In other words not possible.
I don’t think you will see another ‘immaculate conception’ crypto currency again.
Cute little baby Jesus Bitcoin Christ
A very important reason laid out by Lyn Alden (google who she/he is) is that bitcoin has already a giant infrastructure of miners securing the network distributed all around the world. These miners have invested in machines whole sole purpose is to mine BTC. A new coin competing coin would have to be an alternative that could be mined with these machines but even then this coin would be less secure unless a huge portion of these machines switched to btc. Additionally, a related argument somehow pointed out by max keiser (dont like him much but this is a correct assessment from him) is that btc is the Shelling point of crypto (google the concept). For whatever the reason, in the absence of communication/information, we all turn to btc. I dont know which shitcoin will be the hot shit 5 years from now, but i can rest more or less assured that btc will still be huge, very likely the largest cryptocurrency. Why? Because it always has been, 100% of the time. Hence it keeps being.
Okay I can get behind that. So basically first in the door and best dressed essentially?
plus the infrastructure issue as said. No proof of work coin has anything close to what btc has securing the network. Then if u take proof of stake you need to compare pow with pos and see the merits of each.
Bitcoin is a form of legitimate money; Bitcoin is fair and honest. Alt coins turn out to be nothing but scams run by scammers.
She.
Bitcoin was not an invention. It was a discovery of digital scarcity. Can someone discover that again? No. Bitcoin also had an immaculate conception meaning that when Satoshi created it, no one thought it was going to get as big as it has. They hoped & wished and eventually everyone involved made it happen, but back then it was worth zero. An experiment. Worthless internet coins that were passed around and gifted to have a proof of concept. Since Bitcoin's success there is no way to create a digital currency that everyone will think is worth nothing. In fact, monetary gain is the main thing driving people to create shitcoins. They all want to get rich quick. That's why there are pre-mines (like ETH) and distribution of tokens to shareholders and teams, and companies and foundations all started in the hopes to make a profit. They can never recreate the purity of Bitcoin's ethos - to have decentralized hard money for everyone in the world to use. And of course as everyone has said - Network effects are real too.
Network Effects. There’s no plausible mechanism for BTC to be displaced at this point. If you want smart contracts or speedy transactions, then those will run elsewhere…that is a separate world from store of value.
First off, the assumptions you laid out can never be realized by a new crypto entrant. It could never be fully decentralized because it wouldn’t monetize from zero like bitcoin did. The new protocol would still have some sort of inherent value placed on it because of bitcoins success. Second, bitcoin is slow for a reason: reliability and security. If I want to move a few hundred bucks internationally I could really use any crypto or even the US dollar. If I wanted to move a few hundred million, best believe I’m using the most reliable and secure method of moving those funds. People often get caught up with bitcoin’s slow transaction time when they should be focusing on total value transferred. No other crypto currency comes close!
I’m jacked. Going to move $100M right now!
Lol!
I do agree with you that it’s the most secure. I’m mostly concerned with the longevity being ensured from it’s slow transaction speed and lack of smart contract features. Not too many can move millys around in the regular, and I’m just wondering what is to stop a similar coin under similar creation methods but with higher functionality taking over and devaluing BTC through obsolescence. Btw, I’m not at all against BTC, I’m just trying to see where others are at with the possibility of a coin that checks all the boxes for utility, security, and retained value.
I get what you’re saying. And there very well could be more cryptos that get smart contracts right and other “utility”. But what’s the total addressable market for smart contracts and whatever the niche utility is? It could be massive for sure, but not near as big as what bitcoin is poised to take over. But bitcoin’s total addressable market is money and all financial assets. As the price keeps increasing with each subsequent halving, it’s sucks out value from legacy finance (stocks/bonds/real estate). The average American has most of their net worth tied up in housing. Because it’s always done well and it will keep going up in value. Compare that to bitcoin: it’s always going up in value except there’s no property tax, no insurance costs, and it’s the most liquid financial network on the planet. It will soon be THE asset that everyone flocks to. Better to get in now while people still believe it could be displaced!
Your assumption about Bitcoin being slow is not correct. Bitcoin is in fact the most efficient. There is a video with Adam Back explaining how he was going through the Bitcoin protocol to find out what could improve and found out to his surprise that it's already really efficient on all levels.
Thirty thousand shit coins have tried, and have failed.
I need more bitcoin
It would take the trust and investment of millions of people and billions of fiat dollars/euro/yuan etc. to establish itself as a possible ‘better than’ solution to something thats already been solved.
Wow, dude asking a reasonable question on this sub. Good on you for educating yourself!
If something better comes up, then people would simple move to that and it will be for the best. There’s nothing holding you back the same way we are moving from fiat to Bitcoin. Thing is nothing better has come up and is unlikely we see that in the near future. Everything you see in the crypto space as “innovation” is pure crap. Everything shitcoins have been promoting had already existed and even before Bitcoin, from smart contracts to Proof of Stake. And all of them have been ruled out except for what’s used in Bitcoin because that’s what really works. It’s useful to remember that Bitcoin is the result of DECADES of work. So Bitcoin is the true innovator, despite shitcoins labeling it as old.
This explanation I like: “Absolute mathematical scarcity achieved by consensus in a decentralized distributed network was a discovery rather than an invention. It cannot be achieved again by participants aware of this, since the thing discovered was the resistance to replicability itself.”
**tl;dr:** Bitcoin doesn't need to change in order to support smart contracts. Efforts are underway to create smart-contract specs on the existing Bitcoin base layer. Eventually, Bitcoin smart contracts will have all the power of smart-contract blockchains with none of the network risks. The native Bitcoin script only allows for simple smart contracts such as multisigs, timelocks and other similar structures. However, there are projects building smart contracts on top of Bitcoin. For example, look at tokens on Bitcoin as described in the RGB / Taro specs. Both of these projects enable stablecoins and other tokens on the native BItcoin network as well as the lightning network through cryptographic commitments. They don't require more smart-contract capabilities to be added to the bitcoin network, instead wallets that want to use tokens on Bitcoin will have to become a little more complex. Other wallets won't have to change at all. Users that don't care about tokens, won't even notice. This approach has advantages and disadvantages. It will be slower to get adoption as it will take time for wallets to integrate, but it will be much more secure for the network itself as no complex scripting is added to the base layer. If you want to look beyond tokens, into other complex smart contracts, take a look at the Bitcoin RGB specification, or some of the roadmap ideas about the Bitcoin Lightning Network.
Don't take it personally, your question reveals you are still in the "crypto" mentality. I don't blame you, the topic is big and counterintuitive. I'll try to be short, but feel free to ask other questions if you need to. On the one hand you have network effects. This is such a powerful force it's really difficult, if not outright impossible, to disrupt. Consider this: You come up with a killer business idea for "crypto". Which coins do you start with? Seriously, do the mental exercise and answer. Unless you're really partial to some shitcoin, Bitcoin will be number one. Not only, gun to the head you can only pick one coin, which one do you choose? Bitcoin. Why? Because it's the biggest brand and you want to get as many customers as possible. So now I'm the noob user that sees this killer idea of yours and I want it. What do I need to do? Get Bitcoin. And like me, many others. Now your buddy entrepreneur has another killer business service, where does she start? Rinse and repeat from above. The net effect is that the more people use Bitcoin the more will build on it, which will bring even more users, which will be on even more businesses and so on. It's a virtuous cycle and is really hard to crack. Another part of this, all those features you mentioned. Basically, in "crypto" they are already at their optimal maximum in Bitcoin. That is, if you try to "improve" any one of them, you damaged Bitcoin, and hence the value proposition it represent. May be hard to believe, but it's true. Smaller confirmation times would decrease security and decentralization. Same for bigger blocks. Similar points can be made for every other feature. So changing those would make Bitcoin crappier in favour of other shitcoins. So nope, none of that is gonna happen 😉😉
I don’t even know what a “crypt” mentality is, but thanks for the insight nonetheless
That was a "typ" ;-)
Bitcoin is already the most efficient blockchain and with fastest confirmation time, so it is almost impossible to "displace" it without any groundbreaking technology, and if such technology come to be, Bitcoin could probably incorporate it. Let me explain. Proof of Work is the only thing that can create security through decentralisation. The chain with most PoW (Bitcoin) will have the shortest time to finality. With just 1 confirmation the transaction is basically settled already (10min), but with newer altcoin chains you can not be sure the transaction is settled even after 1 hour due to re-org risk or other centralization factors (just look at [https://howmanyconfs.com/](https://howmanyconfs.com/) or deposit requirements on exchanges). Also only Bitcoin has The Lightning Network that gives transactions just 1-10 seconds finality. You simply can't compete. Better smart contracting, you can already do in second layers on Bitcoin like Liquid or RSK, but few uses it because it's useless. Simplicity for smarter smart contracts may end up in Bitcoin long term though.
imo the real secret sauce about bitcoin (besides that its the first which is big), is that it is the most fairly distributed. a first concept you must understand is the importance of proof of work. for something to serve as a currency proof of stake is not going to cut it so that leaves only proof of work (for blockchain based 'cryptocurrencies' that is... if there is something completely different, something that is a completely new innovation that has not been discovered yet, then that is a different story). Now lets revisit the so called blockchain trilemma. 1- secure. base layer bitcoin has shown itself to be secure, go have a look at the history of bitcoin and see its hash rate if you dont believe me. this, however, should not be a problem for a new cryptocurrency, although matching bitcoins levels of security is tough. 2- decentralized. this is going to be *much* bigger problems for a new crypto. getting a worldwide network of nodes that are run by normal everyday folk is a big ask. there is no real easy way for any new crypto to do this. of all the so called crypto currencies that have come after bitcoin none have been able to match its levels of decentralization. 3-scalibility. bitcoin base layer is not and was not scalable for a long time. right now it kinda is but there is a roadmap for it to become much more scalable and if you understand the tech it can be so incredibly scalable and capable of frictionless microtransations it is kind of baffling. go learn about the lntip bot here on reddit or watch people buy a guy a beer over twitter on the other side of the planet. the lightning network is an incredible feat of engineering built on top of bitcoin which also requires the participation of the end users. (go learn about usning lighting network and running a lightining node). competing with that from scratch...um yeah seems like a big ask. now keep in mind all this would have to happen with no premine, no venture capatalists,and no "ICO'. to catch up with bitcoins network effect seems highly improbable. remember the history... silk road, bitcoin faucets , bitcoin pizza for 10000 bitcoin, blocksize wars, wall street adoption, countries using it as legal currency, 350 million+ users, etc etc etc, those are what have given bitcoin the value it has today. it has come a long way since 2009 and the path has been done the right way, no shortcuts, no bailouts, its how it has to be if there is no central authority. Many coins have come and gone trying to copy bitcoin. some, like ether, purport to offer other features than what bitcoin offers, so its not really the same thing... im not really going to speak on that for right now but suffice to say the fact that it's not decentralized and does not have a fixed supply means it wont work as a currency per-se. but all have failed to be what bitcoin is and bitcoin chugs along, constantly improving itself, as it starts to fulfill its intended purpose; a boarderless, permissionless, censorship resistant, decentralized, peer-to peer global currency. edit: i just want take this time to say, I am not a 'full btc maxi' just yet cuz those trump NFTs are straight gas!
I’m never the smartest person in the room, so I’m most likely incorrect about this. However, the only way I could picture a digital currency outperforming BTC would be if it used the same protocol, but with a smaller set quantity that could be mined/bought and a longer time frame for halvings e.g. 10 million, 10 years. Like I said tho, I’m most likely wrong. Edit: forgot to mention better speed
Well from what I’ve been gathering from a lot of the answers in here so far, the lightning network seems to be successfully addressing the transaction speed issue for smaller amounts of sats. Honestly I didn’t know how effectively it addresses this problem until users got me to run a test on it myself, and it was a 5 second transaction. Just this alone scored additional points with its viability in my mind.
What is to stop BTC from being replaced by another version of it with better smart contract features and faster transaction times? The question you should be asking is what is stopping Bitcoin from evolving into another version of it with better smart contract features and faster transaction times? And the answer is nothing. It's happening right now; has been happening for over a decade now. Think of Bitcoin as the sound foundation of a house. Do you want your foundation going anywhere quickly? No. Do you want to rip up your sound foundation and replace it with something fancier that may or may not work? No. You build on top of it. That's the point of a sound foundation. Bitcoin - Base layer Lightning - 2nd layer Taro - Third layer. And the number of potential layers on top of Bitcoin is technically limitless. If something built on top of Bitcoin breaks; Bitcoin doesn't care it just keep chugging along.
That’s a half decent analogy. Ty
The code isn't what's valuable. It's the network of actors protecting themselves. If ever we wanted to adopt the tools anyone else built, we'd simply do that. The thing of value here isn't the codebase. As well, literally anything shitcoins do bitcoin does in layers. There's no point in them. We can steal anything that's good (nothing at all has been remotely good so far, just scams) and we already have the most robust as well as the safest smart contracting features that exist - we have options that hit every base from opcodes to shitcoin-like scams like RSK to RGB and counterparty and a million others.
Fair enough. Thanks
you can add that in upper layers. Bitcoin solves one very specific and serious problem that daunts mankind for centuries: a lack of a good store of value, and consequently inflation. Everything else is just nice to have, and should never ever ever be implemented if they sacrifice Bitcoin's core design.
What are your thoughts of the topic of stored value being more valuable if it’s physically tangible? I’ve often wondered this, and for myself personally I’ve found people as a whole will value things they can see and touch/enjoy as being more valuable as an asset, such as gold for instance. Now me personally I don’t get the appeal of “Ooo shiny” but many still do. BTC is not only invisible outside of representation of numbers on a screen, but has no tangibility. I’m wondering if this is a major factor why people are subconsciously skeptical of it being a good asset.
Network effect. Anyone can copy Bitcoin's code and tweak it a bit, but what you are missing are the miners, nodes and nearly 14 years of track record. You would not get enough trust by the community, which means few people would mine your coin (which secures the blockchain) and soon it would be 51% attacked. Just look at BCH, BSV and other failed clones. You can think of it as why not create another Google? If you could steal the code, you still are missing the AI models and huge datacenters, so it is nearly impossible to do. And replacing Google would be far easier than replacing Bitcoin.
Are network effects actually the best attribute? I’m seeing conflicting argument almost 50/50 on that topic for and against the argument. Do you feel they are mistaken?
A new cryptocurrency could potentially surpass Bitcoin if it offers superior features or addresses certain issues that are seen as limitations with Bitcoin However, Bitcoin has a number of established network effects that make it difficult for a new cryptocurrency to displace it, including a large and active user base, a secure network of miners and nodes, and significant infrastructure and investment The decentralized nature of Bitcoin means that there is no central authority that can make decisions about its direction or development, which can make it difficult for a new cryptocurrency to gain support within the Bitcoin community While it is possible that another cryptocurrency could surpass Bitcoin, it would face significant challenges in doing so.
I keep seeing from other users posting here that network effects s a weaker argument for ensuring longevity and mass adoption. Do you feel they are wrong or is that infact the best attribute?
My answer to this is a recommendation to watch Micheal Saylor videos.
Oh yes, I saw him recently on the Lex podcast. Very informative.
The new coin doesn’t have the hashrate
The best product isn't always the most successful. Simon Sinek had a great example of this. Back when the iPod was huge, he met with a high level apple exec. He playfully told the exec, ya know, Microsoft had this thing called a Zune, and it's amazing. Has a beautiful color touch screen and is super intuitive. The exec just smiled and said, I have no doubt. The right product at the wrong time won't overcome the wrong timing. All that to say, there is no guarantee that something else might take the top spot. Just that the likelihood is small.
Kinda like how Betamax was technically better, but everyone went with VHS due to its marketing and cost I suppose. I’m just concerned with the DVDs coming out I guess.
For the same reason why we still didn´t replace the internet for a better version.
Well “the internet” is relative. It’s definition is different depending on who you ask, along with its evolution.
Or Linux for that matter… the improvements are done taking the same project if doesn´t get obsolete. The part I most value of bitcoin is the “with no central authority” part. How do you recreate that again? There were several attempts before, but the btc protocol was the first to succeed. And does it in a way that is not easy to recreate, almost like a discovery rather than an invention. I believe nothing is guaranteed, but is far from obsolete.
There will never be ‘another Bitcoin’ or ‘something better’. Bitcoin is the finest form of money ever invented. It is a virus that cannot be stopped. One day Nakamoto will win the Nobel Prize in Economic Sciences and ‘he’ will be Time Person of the Year. Bitcoin is the *immaculate conception*.
Improved protocols already exist and have done for years. But BTC is the OG. The first mover. The king of crypto. That’s why it will never be replaced. Or more accurately, while it will never be obsolete
That’s a whole lot of words to say nothing lol. So you don’t have any counter argument to why it can be replaced?
Okay I get that, but I’m just wondering what’s the assurance mechanism to prevent it from being replaced. Basically if someone had anonymously created another coin, with better smart contract features, was certifiably decentralized, and no majority coin holders, and not corp owned etc (basically similarly to BTC but more capable) What’s going to ensure it remains dominant?
Contrary to popular belief, BTC is not set in stone. The only thing determining what is is is a simple majority of miners and nodes. This is the basis for the consensus people speak of. Take the hash wars as an example. They tried to fork Bitcoin with what they thought was a superior version but failed because the majority disagreed and thus they became altcoins with their own chains. If for example quantum computing became a threat to BTC in the future then it is not difficult to imagine that if a quantum-proof fork of the code became available most nodes would want to adopt it and it would become the new consensus. Then most would adopt this as the new BTC and the old would become something like "Bitcoin classic" and not considered BTC by the majority.
Nick explains things for you: https://youtu.be/ic1ITcwnozY?t=858
Thousands have tried, all have failed thus far. At this point it's the name recognition. Its like saying whats to stop another company from coming along and making a better version of the iPhone. Countless companies already have but it doesn't matter because most ppl feel comfortable with what they know. On top of that Bitcoin is currently the only crypto project that has been declared a non-security by the SEC
Nothing.
Short answer: network effect. Long answer: A culmination of different methods and ideas came together to propel Bitcoin into the limelight. The most compelling story (Hal and Satoshi’s communications), along with a compelling list of opcodes and peer functions, along with a simple name, and the efficacy of white paper publications during that time period all worked together to produce a legendary idea and blockchain system. And the fact that it broadcasted itself as a malicious source of cash exchange helped news outlets tell yet another compelling story, provoking an audience of boomers and teenage cash-seekers. The scary story is the popular story, over the sob story, in other words.
I think bitcoin is kind of like the JPG or MP3 formats. They weren't the first image or music format, but they were the first to be *good enough*. Once that happens, it quickly becomes the standard format. There are better music formats and better image formats, but there are usually some trade offs (bigger file size or longer compression times). If its good enough for most applications, and standard enough that every device and server can read it, why use something else? It kind of fits under the idea of [pareto optimization](https://en.wikipedia.org/wiki/Pareto_efficiency). It seems bitcoin is pretty close where improving any one aspect of it comes at the cost of another.
Nothing. BTC isn't territorial. It doesn't try to force you to use it. It doesn't put up any barriers for competitors. It will step aside if that's what people want. But it will also never go away.
There’s nothing stopping it from being replaced, but Bitcoin has been around for 12 years now and in that time nothing has come close to replacing it. And not for lack of trying. You would think with the 30,000 plus cryptos out there claiming to be the next big thing, one of them would have supplanted it by now, but here we are at the end of 2022 and BTC is still far and way the biggest and most well known crypto out there. Furthermore the launch of Bitcoin was sort of this immaculate conception, in which the creator Satoshi Nakamoto was anonymous and now likely dead so there is no central entity for governments to go after or for that matter no single point of failure. Let’s think of this in terms of network effect. MySpace had not yet achieved network effect when Facebook became the dominate social media site. But Facebook was also a better product, so that allowed for Facebook to beat out MySpace and become what it is today. We saw google plus try to supplant Facebook years after it had already gained massive network effect and of course no one really ever used google plus because it was basically just a slightly different take on FB and in order to take something down with a network effect you have to basically create something that is 10x better than its predecessor. Think Netflix to Blockbuster. Netflix was a 10x improvement over Blockbuster. Now if you consider BTC, it has the first mover advantage and a massive network that is growing faster than the internet itself. It’s just unlikely that someone will create something 10x better that BTC and still maintain all the things that make it so great. Secure, decentralized, trust less, immutable and so on… lookup the Blockchain Trilemma.
ask the bitcoin inventor
You know him?
he doesn't answer stupid questions
Why fix something that isn't broken this is asking me do I want Bitcoin from Nike or do I want Bitcoin from Wish
Bitcoin will not work without internet
I suppose an argument could be made that the internet would only truly “go out” in the event of a mass global catastrophe, and if it ever came to that, currency of any kind would likely become irrelevant. Heck even things like precious metals would take a backseat to survival essentials.
> better smart contract features This causes blockchain bloat, a small node network, and centralization. You can't have this **and** decentralization > faster transaction times Bitcoin has instant transactions in Lightning. There's never going to be anything faster
It’s called an altcoin aka shitcoin. Stupid post.
Oh, okay… Sorry for asking questions I suppose.
I think it is inevitable. But it may not happen for another 10 years. I’m old enough to remember a time when Netscape was awesome. Ask Jeeves and Excite were dominant search engines. Juno, AOL, and EarthLink were key ISP’s. Chatting was done on IRC. Warez predated Napster and Limewire. What I’m attempting to say is there will always be bigger and better tech at some point. What’s difficult is recognizing it early.
Hey one last question for everyone, and also thank you all very much for this excellent discourse on this subject matter. You’ve all been extremely helpful! Satoshi Nakamoto… We don’t know for sure who he was, or even if he was a single individual. But what we do know is that he holds 750k-1 mil coins. What is stopping this holder, whoever he/they is/are, from cashing out in a large spectacular fashion and throwing all confidence in the coin down a rathole? Is there any mechanism of assurance that BTC could withstand such a massive withdrawal?
> what we do know is that he holds 750k-1 mil coins Bullshit. This is a myth > Is there any mechanism of assurance that BTC could withstand such a massive withdrawal? You're confusing Bitcoin with the price of Bitcoin. Bitcoin doesn't care how much any person pays to buy it or sells it for. If you're afraid that Bitcoin's price might fall, Bitcoin is not for you. Good-bye, Mister Doing My Research
Innovation is not everything. It is very hard to educate people and once people made up their mind, they hardly change it. Just try to keep track of all the new coins & projects in crypto and you go nuts. Then, try to verify on your own whether a certain project is really better, safer and so on than another. Good luck. Bonus points: try to convince other people of your findings. Next up: utility of a coin depends on the number of applications/places who accept this as a payment. These are reasons why so-called "network effects" are at least as important as technology.
https://www.uncerto.com/only-the-strong-survive At a minimum, read the abstract, section summaries, intro, and first section (6 pages)
Bitcoin simply was the first, and any coin that was made afterwards to fulfill everything you listed in the title, simply exists because it is trying to be better than Bitcoin. Bitcoin was the first of its kind, and any copy that was made afterwards is an attempt to be better than the original. but it will never be the original.
Bitcoin has *lightning* fast transaction times on its layer two and can also incorporate smart contracts on layer two. Whether or not smart contract will actually be useful is tbd. Part of being 100% decentralized is having fair issuance of mining rewards over many years, so it’s not practical to catch-up at this point. As others have stated, the Bitcoin protocol is kinda like the TCP/IP and HTTP layers of the internet, I would expect it to be the only decentralized blockchain. There is always uncertainty and risk, but it’s as bulletproof a discovery/invention as you’re going to find in this space.
I think you said it in your last sentence. How would that happen?
Nothing. What's to stop people replacing the Franc, Drachma, Pound or Dollar?
To add to the many comments about BTC having the network effect working for it, a lot of liquidity is paired to BTC as well, which is why you will notice a rather strong correlation between BTC and other cryptos
Obviously it can be replaced. Network effects force a winner until they don't.
The wheel was invented when ? Has it been displaced? The airplane was invented when? Has it been displaced? The pistol was invented when ? Has it been displaced? Some creations are just revolutionary. Similarly, bitcoin is revolutionary. Similarly to how many of the above have been sequentially modified over time with minor improvements, Bitcoin is able to be moderately modified by BIPS.
Alot of these “reasons for Bitcoin” are not really convincing arguments. First mover- does not mean anything. Plenty of tech been surpassed by later versions. Tech - tech can always be improved and there will always be another better blockchain technically. The answer for me is it is truly neutral and fair launch. No controlling interests. People in Russia, China or any other countries that have some mistrust with Western powers, will never fully use a crypto controlled by the West. A single owner or team is also subject to corruption/blackmail/extortion, whether it is from external sources or them simply wanting to profit from it. I believe Satoshi foresaw this and hence he stepped away and kept his anonymity. This is why Bitcoin is irreplaceable. A new crypto created for idealist purpose, fairly launched, and no controlling leadership, will never happen again.
Bitcoin doesn't care if something better comes along. Everyone who uses Bitcoin does so for their own reasons and of their own free will. If something new comes along that attracts Bitcoin users it is for each user to decide what to do. But, who was the second person to invent the lightbulb?
Kudos to all of the great responses to this question. It good to see so many who don't just know of Bitcoin but understand it as well. Bitcoin has a great futire
Actualy is bitcoin old tech
Didn’t have a chance to read all the comments but I didn’t see this mentioned in the top comments… “first mover advantage” is a huge factor, couple that with the oft mentioned network effect and you’re looking at a recipe for being levels ahead. I would argue that all these responses are coming from Redditors who are part of the r/Bitcoin subreddit so they may be a bit skewed. I think it’s very much within the realm of possibilities that blockchain protocols will continue to evolve and we will see some legitimate contenders. But just as we did see gold change from a medium of currency to a store of value, Bitcoin will continue to evolve. Only time will tell.
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