Bitcoin: Dinosaur of Crypto

5DKE...LHhF

16 Jan 2024

We could say that once hailed as the revolutionary digital currency; Bitcoin can now be labeled outdated technology in some circles. Could Bitcoin, the once-revolutionary cryptocurrency that promised to shake up the finance world, be on its path to extinction?

In the same vein, Exchange-Traded Funds (ETFs), while still popular among many investors, particularly the older generations, could not align well with the preferences of younger, digitally-native investors who are looking into the Future and not into the past of investments in prehistoric age.

But why? In this post, I share why Bitcoin could be considered a dinosaur in today's fast-moving crypto-verse 🪐.

The ₿ White Paper

The Bitcoin whitepaper was born between 2007 and 2008 as a groundbreaking document that introduced the concept of a decentralized digital currency to the world.

Authored by a figure known as Satoshi Nakamoto, the paper's title, "Bitcoin: A Peer-to-Peer Electronic Cash System," succinctly encapsulates its revolutionary intent. Click on the document below to read more 📄 👇😎

Bitcoin: A Peer-to-Peer Electronic Cash System By Satoshi Nakamoto

The whitepaper outlines a system allowing direct online payments from one party to another without going through a financial institution.

By solving the long-standing problem of double-spending in digital currency through a distributed ledger called the blockchain, Bitcoin enabled trustless transactions and created a future for digital money.

Bitcoin Early Years

Satoshi Nakamoto's groundbreaking whitepaper on Bitcoin, which I mentioned in the last section, catapulted the concept of cryptocurrency into the forefront of our collective consciousness.

While Satoshi wasn't the first to explore electronic exchange, his whitepaper sparked a transformative wave that continues to shape our Future.

The impact of Nakamoto's vision and subsequent advancements in this field cannot be overstated. We witness new possibilities emerging from this revolutionary technology each day, paving the way for a decentralized and inclusive financial ecosystem.

We live in a time of constant boundary-pushing, all thanks to that initial inspiration. Let me briefly take you back to the early years of Bitcoin, from Genesis to the first transaction and the establishment of blockchain technology.

1. Genesis of Bitcoin (2008 to 2009): The Bitcoin network officially came to life in January 2009 by mining the Genesis block. Satoshi Nakamoto mined the first block, starting a new era of digital currency.

What is Bitcoin? (v1) | 2011

The first real-world transaction occurred in May 2010, when 10,000 bitcoins were exchanged for two pizzas, highlighting the potential of decentralized digital currency.

May 2010, when 10,000 bitcoins were exchanged for two pizzas

This transaction served as a powerful reminder of the potential and possibilities that lie within the realm of decentralized digital currency.

It showcased the inherent flexibility and convenience that this form of currency offers and the growing acceptance of cryptocurrencies as a medium of exchange.

This groundbreaking event laid the foundation for the widespread adoption and use of cryptocurrencies today.

2. Early Adoption and Growth (2010 to 2012): Bitcoin began to gain traction among a small group of enthusiasts. Exchanges were established, allowing people to buy and sell bitcoin, and its value started to be recognized.

Introduction to Bitcoin | Jul 25, 2011 from Factrocks

Despite its relatively small and specialized status initially, the community surrounding Bitcoin experienced steady and impressive growth over time. This expansion was not only limited to the number of individuals involved, but it also extended to the value and potential use cases of Bitcoin itself.

But, as with any technology, Bitcoin's underlying infrastructure can start to reveal signs of aging compared to newer and more advanced blockchain technologies that have emerged in the market.

₿ 🦖 Bitcoin: A Crypto Dinosaur?

Like the mighty dinosaurs of a bygone era, Bitcoin now teeters, possibly on the brink of extinction. The attributes that once positioned it as the king of the crypto jungle—its pioneering technology and decentralization—have become its Achilles' heel.

The blockchain's sluggish transaction speeds and stupendous energy consumption can't compete with the nimble and eco-friendly altcoins evolving at a breakneck pace.

Is Bitcoin obsolete (and why)?

Just as an asteroid ushered in the end for the prehistoric titans, the meteoric rise of innovative and scalable cryptocurrencies threatens to render Bitcoin obsolete.

Its inability to adapt swiftly to the changing climate of regulatory scrutiny and consumer demand has seen its dominance dwindle, much like the dinosaurs that once roamed the Earth, facing a new era that favors the adaptable and the agile.

The issues facing Bitcoin's technology today that make it look like a Cryptosaur:

1. Scalability: Bitcoin's network can handle around a few transactions per second (tps), significantly less than what modern payment networks process.

2. Transaction Fees: With increased use, the cost to transact on the Bitcoin network has risen, sometimes making it impractical for small transactions.

3. Energy Consumption: The proof-of-work consensus mechanism secures the network consumes enormous energy, leading to environmental concerns.

4. Lack of Programmability: Bitcoin's scripting language is limited compared to newer cryptocurrencies like Ethereum. While Bitcoin enables simple transactions between parties, it cannot support complex smart contracts and decentralized applications.

5. Lack of Innovation: While Bitcoin remains a store of value and a means of exchange, it has seen relatively limited innovation compared to newer cryptocurrencies. Many new crypto projects have introduced novel features and use cases beyond what Bitcoin offers. This lack of innovation can potentially restrict Bitcoin's relevance in the long run.

7. New Cryptos in Town: The high volatility of Bitcoin's price further exacerbates this exchange limitation. As newer cryptocurrencies focus on usability and practicality, Bitcoin risks being overshadowed by more versatile alternatives and getting blasted with a meteor ☄️ like what brought the Dinosaur's extension.

The ⛰️ Bitcoin Land Rulers

One of the most significant drawbacks of Bitcoin could be its consolidated power and influence in the hands of a few dominant players. Often called whales, they hold massive amounts of Bitcoin and other cryptocurrencies, allowing them to own a big chunk of the Bitcoin Land market.

This concentration of power goes against the decentralized nature of cryptocurrencies, which was one of the foundational principles behind Satoshi's vision of their creation.

It creates a scenario where a small group of individuals or organizations have an outsized impact on the entire market, resembling a prehistoric era where only a few dominant species ruled the land ⛰️.

This lack of diversity and competition can hinder the overall growth and development of the industry.

For The Crypto 🏛️ Museum

Let's conclude this post by saying that we certainly can accept Bitcoin paved the way for cryptocurrencies, but it's clear that newer projects are outpacing it in terms of technology.

These projects offer more efficient transactions, better scalability, advanced intelligent contract capabilities, reduced energy consumption, and enhanced privacy features.

As the crypto ecosystem continues to develop, we must accept that Bitcoin is on the way to the Museum of Crypto History. Let's better keep an eye on these innovative platforms that could replace Bitcoin as the leader in the space.