Why Bitcoin Not Crypto
In Part 1 of this article, I recall my own early experiences with Bitcoin and cryptocurrencies.
I bought my first cryptocurrency in October 2020. Like many others who were working from home due to Covid restrictions, my monthly outgoings had dropped unexpectedly – no more commuting, no more socialising – and I was getting into investing for the first time. After a few months diligently buying index funds and watching countless investment videos on YouTube, I was ready to ‘step out on the risk curve’ and ‘diversify’ into cryptocurrencies. I signed up for an exchange and bought the following:
- £25 of Bitcoin (BTC) – the obvious choice for a beginner
- £25 of Ethereum (ETH) – I’d heard some good things
- £25 of Bitcoin Cash (BCH) – wait… there are two bitcoins?! Better get both!
Over the following months, I signed up for multiple exchanges and bought small amounts of around 50 (yes, 50!) different cryptocurrencies. I took advice from ‘crypto’ YouTubers who explained how each coin had its own specific use case: this one was for video-streaming; that one was a multichain protocol; the other one was an oracle; enabling faster payments; a DEX aggregator; an L2 scaling solution; a DeFi governance token; an NFT platform play… after all, you’re not really ‘into crypto’ until you’ve swapped, staked, and tried your hand at yield-farming!
As someone new to the space, the idea of a multi-blockchain world seemed entirely plausible. This was a rapidly developing new technology, bursting with innovation and experimentation. Sure, some projects would fail, but the stronger ones with genuine utility would prevail in the long run, with early token-holders ‘10x-ing’ their initial investment. And, yes, some projects are vapourware or outright scams (a.k.a. sh*tcoins), so make sure you do your due diligence to avoid these.
In those circles, Bitcoin was typically revered as the original cryptocurrency which had made this whole ecosystem possible. Most influencers advocated allocating a sizeable chunk of your crypto portfolio to BTC because of its longevity and relative stability. Bitcoin was a ‘blue-chip’ crypto, though, as a forward-looking investor, you should probably be ‘overweight ETH’. Some were less reverent and labelled Bitcoin as ‘boomer-coin’ or ‘old-tech’; it’s number 1 ranking vestigial, and ‘The Flippening’ (a hypothesised event, where the market capitalisation of ETH overtakes BTC) just a matter of time.
Everything changed once I signed up for Twitter. All I wanted to do was retweet a project to receive an ‘airdrop’ (or something like that), but instead – among all the noise, hype, and shameless promotion – I discovered a group of people who viewed things very differently. Gone were the open-mouthed thumbnails and sensationalist all-caps video titles, and in their place, an articulate, if strongly worded, defence of why only Bitcoin matters, and why everything else is a sh*tcoin. I had stumbled upon Bitcoin Maximalism.
If you’ve never encountered it before, the maximalist stance probably strikes you as absurd or outrageous. It certainly struck me as such. Surely this can be explained away by tribalism, akin to football fans doggedly insisting that their team is the best and that the success of other teams is due to foul play, dumb luck, or a rich owner?! After 1,000+ hours of investigation, I do not believe this to be the case. In fact, I think the Bitcoin maximalists are right.
In the second part of this article, I will explore the reasons why Bitcoin is unique and why it should be considered distinct from so-called crypto. For now, I hope that I’ve planted a seed of curiosity in your mind, whether you are an avid crypto enthusiast, whether you think it is all “rat-poison squared” (in the words of Warren Buffett), or whether you’re just plain baffled.
P.S. By March 2021, I had sold all my crypto holdings, but I continue to buy, hold, and spend Bitcoin (and I’ve recently joined the team at CoinCorner!)
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