Is Bitcoin Really ‘Crypto’?
In the world of crypto-skeptics, there is a new flavor emerging that seems to dissect Bitcoin from “crypto, which is morally reprehensible.”
Bitcoin, the maximalists say, is not crypto at all. Crypto bad — Bitcoin, very very good.
But is the argument true? Does Bitcoin stand in a realm completely unto itself, apart from the immoral, scam, Ponzi-scheme like nature of the ‘crypto’ ecosystem?
Arguments span the whole spectrum — from financial traditionalists keeping a skeptical eye on Bitcoin as much as other cryptocurrencies, to Bitcoiners’ determination to “ward off” newcomers from other cryptocurrencies.
I wouldn’t call the lump-sum view of cryptocurrencies as conflating Bitcoin with cryptocurrencies. To me, it’s the same as saying Apple isn’t a technology company and Amazon isn’t an e-commerce business because to associate them with other companies does Apple and Amazon, the number ones in those spaces, a disservice.
The answer is, yes they are. Apple is a technology company, Amazon is an e-commerce company, and Bitcoin is a cryptocurrency.
That being said, Bitcoin is the best. It not only set the precedent for what cryptocurrency, in its purest and most ideal form, should be, but has also upheld those values over time. As new cryptocurrencies developed, the more they tried to embody the values Satoshi set out, the farther away they truly were.
I understand the frustration of wanting to set Bitcoin apart from even the diction of cryptocurrency, given the connotation it has taken on in recent years. But I would argue that to separate Bitcoin from cryptocurrency is to leave all cryptocurrency in the dust behind. Including Bitcoin elevates what the crypto ecosystem is potentially capable of.
Bitcoin is the cryptocurrency of sovereignty-seekers: those looking to maintain autonomy of their money, mind, and body over an agenda perpetuated by globalization and centralization. Judged on these characters, Bitcoin is the only cryptocurrency that maintains these values.
Rules, not Rulers
When it comes to other cryptocurrencies, the issuance is decided by a group of people, who are public facing, and susceptible to coercion. The issuance schedule is likely not based on a fixed schedule either. Bitcoin’s issuance is predetermined and public. If someone running a Bitcoin node wanted to change that, he could on his node, but everyone else running a node would maintain their same software. Everyone who runs a node is an equal participant, and to make critical changes that will be adopted there has to be quorum from a significant group of node operators. No one node operator can change the whole protocol.
That is why one of the greatest things for Bitcoin was the anonymity of its founder. There was no one to take to court, no one to coerce, to physically come after. Bitcoin set rules, but didn’t create rulers.
Decentralized
Many cryptocurrencies claim to be decentralized, but few actually execute. Decentralization is important because, in an increasingly hostile and regulated world, decentralization makes a system antifragile.
A truly decentralized protocol can withstand attacks from hostile governments, military forces, sanctions, and so on. When China banned bitcoin, it continued to operate as intended. If a blockchain can be shut off for an upgrade, or can go offline for a significant portion of time, its not decentralized. Bitcoin’s hash power is distributed around the globe and copies of its ledger are equally spread with those who run full nodes.
A common criticism of Bitcoin has been that mining pools and concentrated token ownership makes the technology highly centralized. The truth? Mining pools are constantly in flux, with individual miners interchanging pools, and candidate blocks being written by individual miners (with Stratum V2). In short, pools are individuals acting in their own interests.
As for concentrated token ownership, traditional financiers see money as power — ying and yang — two forces that go hand in hand. Wealth influences the rules of the system, and are directly proportional. But in Bitcoin, as long as an individual runs a full Bitcoin node, he has the same amount of power as someone who owner 1% of all Bitcoins in circulation. In fact, if the token owner doesn’t run a node, then the individual is actually more powerful.
Censorship-Resistant
In Citizens United, the Supreme Court established that money is speech, and the freedom to spend money equates to the freedom of speech. By extension, Bitcoin is a shrine for freedom of expression and speech.
Bitcoin does not censor transactions. If an entity attempts to blacklist an address, the owner of that address can elect to pay a higher fee to get their transaction included. Only once has a mining pool elected to censor transactions. They reverted back to validation shortly after.
Most cryptocurrencies are not censorship-resistant. Famously, Ethereum hard-forked their code after a DAO exploit took $150M, restoring the stolen funds. If Ethereum can change their code to pretend a hack never happened, it can change to prevent a transaction. Other platforms such as OpenSea have complied with U.S. Sanctions. For Bitcoin, code is law. It is immutable, and doesn’t change to the whims of government.
Scarcity
Unlike any other asset on Earth, you cannot produce more Bitcoin once its supply is fully mined. That makes Bitcoin the hardest asset on Earth: more diamonds, gold, and gas will form, more fiat will be printed, more stock will be issued. You can’t create more Bitcoin with a few keystrokes.
It is also incredibly easy to audit. If you run a full node, the command “gettxoutsetinfo” will display all relevant information on the Bitcoin blockchain, including block height, blockchain size, and total circulation. This simple code means you don’t have to trust the calculations of anyone else. It is a fool-proof way of ensuring distributed parties have the same answers.
Conclusion
So is Bitcoin really ‘Crypto’? Well, yes and no. While Bitcoin is incredibly unique relative to the entire crypto space, it’s still a cryptocurrency. But most importantly, semantic distinction fixates on the wrong problems in the greater crypto ecosystem. It’s important to recognize the differences between Bitcoin and other cryptocurrencies, but there is a way to do this without dragging other projects down. Cryptocurrency is struggling enough without leaders and innovators in the cryptocurrency space turning on one another. Cryptocurrency is better off with Bitcoin as leader, and can continue to learn from its ethos.
About Centuries Analytics
Investing in cryptocurrency doesn’t have to be risky — not anymore. We let data speak; not investors, “experts”, pundits, or tv show commentators. Centuries uses social media, financial, and macro-economic data to determine and predict cryptocurrency markets.
