Is Bitcoin Dead?
Cryptocurrency

Is Bitcoin Dead?: Why is it tough to replace Bitcoin?

Ever since humanity began, multiple human needs took different shapes. One such need was of socializing. History suggests that there hasn’t been a single instance where homo-sapiens could thrive without a society. This is engraved in our DNA so deep that at times we push logical boundaries to conform with the norms set by these very societies. As society became more complex, these norms forked and we came up with subcommunities under the common umbrella of humanity. Today, we plan to address one such community of cryptocurrencies. Specifically: Bitcoin. The burning question of the hour: Is Bitcoin Dead?

Bitcoin has turned 12 this year. And as they say in the crypto space, every 3 crypto months are equal to 1 year of financial world. With that logic, your beloved BTC is about 48 years old. While this number is still young as compared to other asset classes, but given the heavy reliance on ever changing technology, BTC seems to be a thing of past for many. But I am a Bitcoin purist. I don’t think that anything is going to replace Bitcoin any time soon. So today, we understand the reasons why these conversations are coming up. Also, we’d understand why BTC is going to hold the crypto throne.

Why is Bitcoin Becoming Obsolete?

Crazy world right? Using words like obsolete for something that’s just a decade old is something unheard of. Let’s understand why!

Creators of Bitcoin very carefully evaluated and pin pointed the flaws in the current financial system. They used blockchain technology to come up with the world’s first peer to peer, public, decentralized transaction system.

Imagine you have to send me Rs. 1000 through UPI. You first reach out to Google Pay and ask Google to initiate the transaction on your behalf. Your Google in turn talks to your bank saying that you have to send Rs. 1000 to me. Your bank then talks to my bank. And when my bank receives money, it has to relay that information to Google so that I can be notified of the same. That’s a lot of friction and intermediaries who now have a lot of data about you and me both.

Bitcoin aimed to do away with all this through a system that is governing itself using technology.

But unfortunately, that is it for Bitcoin. That’s all it can do. A decentralized ledger. Nothing more, nothing less.

Birth of Ethereum:

A few years down the line after BTC was launched, a 19 year old boy named Vitalik Buterin had this crazy idea. He thought if money can be decentralized and maintained without any intermediary, why can’t everything else.

There is a legend that goes around that Vitalik had this idea while playing a game. In that game, he had a specific sword he used to play with. One fine day, creators of the game removed that sword. At that point he realized that we live on a mercy of set of central authorities.

At that point he borrowed the technology from Bitcoin and decided to come up with a platform that would enable people to create decentralized applications. Imagine a scenario where you are connecting with driver without Uber keeping the commission.

Is Bitcoin Dead?

It’s logical to think this way right? If you have replicated the technology that powers BTC and turbo charged it 100x, its likely to kill bitcoin. And that’s what the community is pondering over, for a while now. But I don’t think it’s going to be as easy as they might think. Here are a few reasons I think so:

A. Network Effect:

A few months ago, there was a lot of noise around Whatsapp’s privacy policy. Remember? All of us downloaded Signal and Telegram. We were ready to boycott Whatsapp for once and all. But what happened after that? Nothing right? Why do you think this happened?

When we flocked to the likes of Signal and Telegram, we found it really hard to find other people on the platform. No body wants to be on a social media platform all alone.

Enter: Network effect. A situation where the value of your product, service or platform depends on the number of buyers, sellers, users who leverage it. Typically more the number of people, greater is the network effect and greater is the value created by the offering.

Right now Bitcoin has the most number of transactions in the cryptoverse. Every new entrant in the crypto space starts their journey with Bitcoin (at least that’s what I would like to hope).

Apart from that, dominance of Bitcoin on the crypto market by market capitalization is nearly 60%. So, if someone were to topple BTC for the first place, it would take a significant effort and price surge. While that may be happening in tandem with the likes of ETH, but creating a community does take time.

B. Irrational Exuberance:

This always brings me back to the infamous quote by Steve Jobs:

“People who are crazy enough to think that they can change the world are actually the ones that do!”

You need a significant tinge of irrationality when you are driving the adoption of something that is challenging the status quo big time. And in case of BTC, you’d find multiple such examples where people have gone past the boundaries to prove their loyalty for BTC.

In one of the example, a man named Didi Taihuttu, his wife and three kids bet on Bitcoin like no one else could. In 2017, this Dutch family liquidated all they had and put it in Bitcoin. By all, I mean the business, house, belongings, other assets, everything!

I wonder if any other asset class has seen this level of craziness.

C. Big Money

No matter how much we hate it, but in order to drive an asset class, you need rich people’s money. They are the ones that bring in the sums that have the potential of taking the market to the next level. In case of Bitcoin, you would find plenty of such examples:

  • Elon Musk and his company Tesla
  • Marc Cuban
  • Kevin O’ Leary
  • Winklevoss Twins
  • Russel Okung

Of course there are many such investors in other projects too, but Bitcoin has always been the first preference of anyone planning to park in crypto space.

Conclusion:

Have you started your crypto journey? If yes, where did you start it from? Well, that might just prove my point. Do you think Ethereum will overtake BTC? Is Bitcoin dead?

Let me know in the comments section below. Hit me up on FacebookTwitter or Instagram. If you find this article interesting, please consider sharing it on social media using the links below:

Until Next Time. . .

For our beloved “non readers”, I also do quick carousels on these topics over Instagram. Come join the fun. Hit me up here.

Psst.. Struggling to save money?

I just managed to save Rs. 10,000 by investing my ‘Chillar (Change)’ in mutual funds. Investing amounts like Rs. 5, 8, 25, 45.. and 4 months later, Boom! I have 10 grand to spare. Interested in knowing how I did it? Read more here.

This blog post is part of the blog challenge ‘Blogaberry Dazzle’ hosted by Cindy D’Silva and Noor Anand Chawla and sponsored by Bakez by Daizy.

On a side note, I use CoinMarketCap for all my crypto related research. You can access it through multiple modes. Sharing the links below:

rgvdudeja
A techno manager by profession and a hardcore geek at heart. I love to poke my nose into tasks where other usually gave up on. My hobbies include, reading about latest trends in tech industry, playing guitar and yes, memes!
http://pandatechiein.wordpress.com

45 thoughts on “Is Bitcoin Dead?: Why is it tough to replace Bitcoin?

  1. Very well-written! Reads like a story someone would tell me to explain bitcoin.

    I don’t know enough to say if bitcoin is dead but I have been reading about more applications being built on ethereum.

    But Bitcoin has a lot of believers and isn’t about to vanish into thin air. If it’s been around for 12 years and people are still crazy about it, there must be some value to it.

      1. I’ve had to write a few articles for clients on blockchain. Hence, I’m reading through your articles trying to understand the concept. 🙂

        Why don’t you compile these posts into a book? I’m sure many people like me would be in need of a crypto and blockchain guide.

      2. I actually made a short course that I delivered in my office. It’s a 90 min beginner’s guide to the world of cryptocurrency. But I’m not sure where to put it for monetising etc. 😑

  2. Firstly, thank you so much for simplifying the understanding the strange world of Crypto Currency to a pleb like me. My Brother is a eager novice in this field and i will be sharing this post with him.

  3. I have been following all your posts on Bitcoin and you have simplified them for laypersons like me. I am now thinking of starting my Bitcoin journey. Thanks a million for writing this series. Keep writing!

    1. I learn about Bitcoin from your posts that are quite engaging. Bitcoin can’t be dead, can say it by the intensity with which people like you write about it. Thanks for another interesting chapter.

  4. Detailed post about Bitcoin , I was not having much knowledge about it , your post is quite informative.
    #Blogaberrydazzle

  5. Very insightful post on Bitcoin. Ever since I wanted to know more about bitcoins but never found any good article. This one helps me to understand more the bitcoins. Really helpful.

  6. You have simplified Crypto currency and Bitcoin in simple layman’s language. But I somehow have a mental block when it comes to finance and numbers. I wish I could understand.

  7. I had no idea on bitcoin but your blogs are being very helpful. The information that you share in your blogs are easy to understand. No idea whether bitcoin is dead or not. Haha…

  8. I really liked the way you have shared this article, I learnt few things from this. I am not much into cryptocurrency but whatever I gather I don’t think Bitcoin is dead.

  9. Your posts are always so informative, Raghav. I too don’t think Bitcoin is going down anytime soon. Like you said, it is to do with network effect. New ones need time to catch up to Bitcoin, and by then, the latter would be miles ahead.

  10. I don’t know much about cryptocurrency, I did get some idea from your post that Bitcoin is facing a crisis and will come back stronger. The article is very well structured. The flow of your writing can easily pull the reader in. Keep writing such informative posts!

  11. I never really understood the obsession with bitcoin and hence it does not really matter to me whether it is dead or not. Your article is really interesting the heading makes the reader feel like he is being questioned but at the same time you give the answer also.

  12. Your posts are always very informative. And you simply the terms that makes us easy to understand. I don’t know if Bitcoin will survive or not. Everything has a shelf life.

  13. Haven’t invested in crypto currency yet. Thank you so much for the detailed information which was easy to understand for people like us to start with. Might go for it soon.

  14. Many thoughts went through my head while reading this post – first I had no clue people were talking about Bitcoin being dead. Second I had never heard the word Ethereum. Third it’s not unreasonable for decade-old inventions to become obsolete – that’s the nature of technology, what is good survives, what isn’t dies a quick death! Fourth, since you clearly know what you’re talking about, I’d take your word for it that bitcoin is far from dead!

    1. This is an interesting post. I am not sure about bitcoin future but I can say that I have learned a lot of new things about crypto currency and bitcoin through your articles.

  15. This is an interesting post. I am not sure about bitcoin future but I can say that I have learned a lot of new things about crypto currency and bitcoin through your articles.

Leave a Reply