How Bitcoin Became the World’s Biggest ICO

I’ve been in the Bitcoin world for a long time. Heard about it around 2010. Bought my first around 2013. Wrote an introductory book about it back in 2014. I’ve been preaching about the merits of Bitcoin for years, and like many early adopters, I’ve had mixed feelings about Wall Street’s recent obsession with Bitcoin. On the one hand, the price appreciation has been great — and a long time coming! On the other hand, it’s comical how much money is being thrown at some terrible ideas. The ICO/token craze was a great example of it.

ICO’s are cool technology with a bright future, but they’ve been way overhyped. Abused, even, by intelligent scammers who knew that you could make millions of dollars simply by posting your “white paper” online. Didn’t matter if you could deliver on your promises; didn’t matter whether the claims in your paper were technically possible. Heck, it didn’t even matter if you wrote it. Some papers were straight copy-pasted from other places, just with different titles and author names. Still, they raised millions.

So, as somebody who deeply believes in the merits of cryptocurrency, much of the hype has been cringe-worthy. I know that hundreds of millions of dollars have been essentially thrown in the trash by excited investors who hadn’t a clue what they were throwing their money at.

But now, with the recent failure of the Segwit2x upgrade, I’m almost embarrassed to say it, but Bitcoin has also become an ICO. A huge, multi-billion-dollar ICO.

Of course, I don’t mean it’s technically an ICO. I mean it serves the exact same function as an ICO. Based on real-world usage, the non-technical definition of an “ICO” is this: a vehicle for speculation based on promises of future technology.

Bitcoin Legacy (BTC) is no longer based on the original Bitcoin technology. The Core developers have decided that the original technology is fundamentally broken. Therefore, BTC is now “potentially peer-to-peer cash in the future once a group of brilliant developers creates the revolutionary new technology called The Lightning Network!”

So according to this narrative, Bitcoin, the world-changing peer-to-peer electronic cash system that so many of us were excited about — that an entire industry was built around — is actually not yet invented. But a group of brilliant minds are working on it. So, invest all your money now, because once the developers create it, it will be amazing!

To me, that’s an ICO. It’s not based on existing technology in the real world. It’s based on promises and hype.

Not to mention, there are a million potential problems with the Lightning Network. Some known, and some unknown. The technology does not exist. According to the developers own numbers, it must still be coupled with significant blocksize increases, as it is impossible to scale globally with 1mb blocks. Not to mention, Blockstream themselves are now calling the Lightning Network “a Bitcoin micropayment system that supports high volumes of tiny payments .”

Hang on a sec. High volumes of tiny payments? So what about all the transactions that people want to make with Bitcoin that are somewhere from say, $5-$500? Is there any technology for that? Is Bitcoin now, “Digital cash for transactions of less than a dime or more than $500!” That’s a stupid technology. So count me out.

Thank goodness there is an alternative. Bitcoin Cash (BCH) is the version of Bitcoin that I’ve spent years promoting and writing about. Bitcoin Cash has little in common with the “settlement layer for huge payments + micropayments” envisioned by the Core developers of BTC.

Fortunately, BCH shares a common history with Bitcoin Legacy, so any balance you had in BTC on August 1st, 2017 is duplicated on the BCH network. If the community shifts towards using BCH in the long run, which I predict will happen, then nobody needs to lose out.

There’s no telling how long the Bitcoin Legacy system will last, nor how many billions will continue to be thrown at it by clueless Wall Street investors, but I am convinced it’s doomed. It will not stand up to its competition. So, I’ve sold about 90% of my BTC — and to be honest, I feel like I’m irresponsibly speculating on the remaining 10%, since I don’t believe the fundamentals are sound.

If Bitcoin cannot be used as a currency, or if it’s a burden to businesses that try to adopt it, it will spectacularly fail. I’ve been around long enough to remember the time before business adoption. The community enthusiastically told businesses about all the perks of adopting Bitcoin — low transaction fees, fast and secure confirmations. Because Bitcoin actually had these perks, it succeeded, and now it’s appreciated about 8,000-fold since I’ve been following.

But now, the new BTC community has abandoned the fundamental value proposition of Bitcoin — and in many cases, they are aggressively hostile to businesses and mock people for actually using Bitcoin for transactions. They’ve turned the early adopters, users, and evangelists into liars. Bitcoin Legacy (BTC) does not make any economic sense, other than using it to speculate. It doesn’t make any sense for business — unless, of course, you’re dealing with transactions costing thousands of dollars or less than a dime. And if you do accept it, prepare your support team for a swarm of angry emails from customers whose transactions weren’t confirmed in time.

I will continue to write and speak about the incredible peer-to-peer electronic cash system that was invented by Satoshi Nakamoto. For now, it’s just got a different ticker symbol and a slightly different name: Bitcoin Cash.