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Why Bitcoin Only

Why Bitcoin 'ONLY' ?

Bitcoin can be confusing to a newcomer. It’s a radically new thing, a new way of doing money, it challenges many of our pre-conceptions and is surrounded by jargon. Alongside this there are many ‘other’ crypto-currencies, often called alt-coins or ‘crypto’ for short. To an outsider, they appear equivalent, but nothing could be further from the truth. 

Bitcoin and ‘crypto’ are very different things. 

It takes time and understanding to appreciate this – our key links page is a great start. But as a short cut, here are a number of reasons why Bitcoin is completely separate and different to ‘crypto’ . Many would go so far as to call everything that isn’t Bitcoin an affinity scam – as they prey on people’s ignorance of the difference.

Bitcoin was created to make money fair. No-one has the ability to ‘print’ or create new units of money. The only way to obtain Bitcoin is to exchange it for something or to provide ‘mining power’ in order to help secure the network. All are equal on the Bitcoin network. It has been so since it’s inception.

Contrast this to fiat money where central banks, at the stroke of a keyboard, can create billions of pounds, dollars, euros out of thin air.

And then we have ‘alt-coins’, invariably they have some form of ‘pre-mine’ where insiders and founders award themselves a portion of the money before the ‘alt-coin’ is even launched. These insiders have huge incentive to pump and inflate the price of their alt-coin in order to enrich themselves. Often they do so with slick marketing and strong narratives about how their coin is ‘better’.

Bitcoin has value because it is extremely decentralised. This means there is no person, foundation, company or venture capital firm with influence over it. 

Decentralisation is important as it protects against attack from any organisation or country. But more importantly, it prevents any entity from exerting influence over Bitcoin to their advantage. It prevents anyone from gaining control and ‘awarding themselves’ Bitcoin for free. The rules of Bitcoin cannot be changed other than by widespread consensus – and this also enforces the credible supply cap of Bitcoin at 21 million. There will never be more than 21 million. 

This decentralisation results from a period of years out of the spotlight, where enthusiasts and cypher-punks adopted and used Bitcoin before there was even a price at which is could be exchanged for pounds or dollars. The ownerhip, number of Bitcoin nodes and miners  grew organically. They were geographically dispersed and changes to the Bitcoin protocol perculate through an open source consensus method – again without central control or leadership.

‘Alt-coins’ without exception are more centralised in their nodes, miners (if applicable) and their locus of control . Even Bitcoin’s closest ‘competitors’ are vulnerable to state or organisational attacks as well as being influenced towards the best interests of those in control of the change process or those that hold large amounts of the alt-coin (a particular vulnerability with ‘Proof of stake’ coins where the largest holers get the largest vote over changes to the rules. It is unsurprising if they vote to their personal advantage over smaller holders.) 

Bitcoin uses something called Proof of Work (PoW) to secure it’s ledger of tranactions (the record of who owns what). Computer processing power and energy provided by miners works to secure the Bitcoin network and prevent tampering. This prevents bad actors from trying to re-write the ledger in their favour – ie to reverse a transaction or gift themselves Bitcoin. 

The amount of energy securing the Bitcoin network makes it nigh on impossible to alter or edit the ledger, whereas the required energy to do so on alt-coins is many multiples lower. Many less secure coins succumb to an attack where a large amount of computer processing power is temporarily diverted to ‘mining’ that coin – and re-writing the ledger to the benefit of the attackers. 

What this ultimately means is that when you receive Bitcoin, you can be certain you own it forever, until you decide otherwise.  When you send a Bitcoin transaction, you can be sure that it sends, and the receiver can be sure they have received it. This matters enormously for Bitcoin to become global money where  individual transactions worth $billions or even $trillions will regularly take place. You need to be confident in the money.

Bitcoin has a track record stretching back to 2009. The rules around scarcity, supply cap and issuance are all unchanged. Given that the value of Bitcoin is partially borne of it’s fixed supply and known monetary policy – it’s important that these do not change. The longer they exist and remain unchanged, the more credible it is that they will never change. 

Compare this to a coin created anytime since. Many have seen changes to their supply rules. All have a lesser track record. On it’s own, this could possibly be overlooked. But when combined with the fact that all other coins are more centralised – it makes it irrational to suppose any alt coin is less likely to ‘change the rules’. By change the rules – think ‘make a policy change that benefits some holders but disadvantages you’. 

Monetary Policy

Take a look at the money issuance of the current second largest cryptocurrency Ethereum. The squiggly line looks more like a childs drawing, or the interest rate policy by central banks – than something objective, pre-programmed and unchanging. The erratic nature demonstrates politics, human interference and ‘changing the rules’ of the game. 

Bitcoin does away with politics, priviledge, bail outs and cheating. Bitcoin is fair. Bitcoin is known. Bitcoin is dependable. We know exactly how much Bitcoin will exist from now until the distant future.

After so many years Bitcoin goes from strength to strength, while every new cycle of rising price brings a new set of ‘alt-coins’ with new stories and new promises. Every subsequent bear market sees most of these die and disappear into irrelvanace. See how they come and go into the Top 10 largest cryptocurrencies  since 2014…

source 

Deadcoins

See this documented list of deadcoins. Each of these coins was promoted as the next best thing or solving some problem. Many were ‘better’ than Bitcoin in some way.

Many that didn’t ‘die’ yet, have faded away into obscurity.

Price Performance

Finally, Sam Callahan shares some research into how alt coins perfom in price after listing onto Coinbase – one of the largest crypto exchanges. TLDR: they might give some excitement but they lose money compared to Bitcoin.

Don't just take our word for it...