Bitcoin Maximalism – Crypto Survivors and OG’s Could Make a Case to Differ
11 Novembre 2021 - 05:38PM
NEWSBTC
Bitcoin Maximalism is a controversial concept that lurks around the
crypto-verse and comes to the spotlight behind metrics like the
Bitcoin Dominance Index (BTCD), institutional involvement, and
various similar comparative narratives. It is undeniable that this
concept comes without its own merit as the perception of the rest
of the cryptocurrency markets behaving like a casino comes with
adequate historical proof of rugpulls, scams, hacks, and the list
goes on. It is the notion that only one crypto asset and network is
worthy of investment, Bitcoin (BTC), the others are merely
unreliable assets that have capitalized on the hype behind BTC and
can only serve as instruments for baseless speculation. However,
with the rising adoption across blockchain networks and emerging
cryptocurrency tokens being used as investment vehicles, it is
becoming increasingly evident that there is ample room for various
blockchain networks and crypto assets to coexist in the same
ecosystem leading to healthy growth across the industry globally.
At the same time, it is also true that many protocols, firms, and
assets gaining traction right now due to the high mainstream media
attention, hype, and fear of missing out (FOMO) that often
encapsulates the industry due to posting significant gains and
birthing several self-made millionaires and billionaires in just
over a decade of existence, will not end up making it in the long
term, either due to lack of a proper use case/user proposition or
irregular fundamentals that don’t add value thus have no takers
beyond the hype. Pros & Cons of BTC Maximalism Even though
Bitcoin maximalism might sound extreme to some, the narrative and
belief exist in the ecosystem for good reason as the network has
proved its worth and cemented its place in the history of the
financial markets as the first digital asset that has led the
markets for the longest time now. The network is historically the
least tampered with and has proven to be one of the most reliable
ones out there. Thus, it is essential to have a look at both sides
of the coin and gauge the pros and cons of bitcoin maximalism as
applicable today. Bitcoin Maximalism Pros Cons Supported by
Metcalfe’s law that states that the value of an investment is
proportionate to the square of the number of participants involved
The same law extends to various altcoins that have shown relative
price stability like Ethereum (ETH), Cardano (ADA), Tezos (XTZ),
etc. Bitcoin also has the functionality to utilize separate side
chains that don’t have a native token of its own to improve the
functionality of the network and step into the world of DeFi, these
chains are known as pegged sidechains. Smart contract networks have
the ability to support various financial features as is becoming
increasingly evident in the DeFi markets. There are nuances on the
existing Bitcoin sidechains that make it difficult for developers
and applications to build on. Bitcoin network and tech are obsolete
in comparison with smart contract networks that have the capability
to offer a higher value proposition to their users. It is the most
stable cryptocurrency in terms of price and serves as a leader for
price discovery for several tokens in the market. Altcoins often
have a potential for higher gains on investments as they have
higher price volatility. It is the most secure blockchain network
due to the high mining difficulty which entails a reduced
probability of attacks on the network. Various innovative
blockchain solutions that enter the market every day have no
deployability on the Bitcoin network. The asset has maintained its
place in the market through several unfavorable instances such as
the Mt. Gox hack which cost investors more than $460 million at the
time in 2014. However, it was recently announced that the defunct
exchange will pay $9 billion to its creditors to put an end to this
seven-year-old saga. Like Bitcoin and the prominent altcoins like
Ethereum, there are various blockchain networks, cryptocurrency
exchange, and other protocols that have stood the test of time even
through events like the crypto winter and several bear runs that
caused several big players to also become irrelevant in the
ecosystem. Here are examples of a few projects, networks, and
cryptocurrency exchanges that stood the test of time amidst various
unfavorable instances and FUD (Fear, Uncertainty, and Doubt) that
has engulfed the market countless times in its brief existence.
KuCoin KuCoin is a cryptocurrency exchange that has been around
since it was founded in September 2017. It had held its stead as
one of the prominent cryptocurrency exchanges that fought the
market tides and have cemented its place as one of the most
important exchanges in the crypto-verse. In 2020, a North Korean
hacker group called Lazarus Group executed a hack on Kucoin that
resulted in the loss of $275 million, which was half of all the
cryptocurrency stolen that year indicating the magnitude of the
hack and the amount of funds lost. However, even in the face of
adversity the exchange soldiered on and resumed trading soon after.
In February this year, it was announced by CEO and founder Johnny
Lyu that 84% of the funds, i.e. $239.45 million has been recovered
and the remaining funds is covered by the insurance fund, thus the
exchange ensured that no user was impacted due to this hack. KuCoin
has been impressive with its response to China’s absolute ban on
cryptocurrency transactions and associated businesses. Reportedly,
the exchange immediately conducted technical self-inspection to
ensure that the company’s operations complied with the regulatory
requirements of mainland China. Soon after, the exchange joined
Huobi and Gate.io and boot users from mainland China on its
platform. Tezos Tezos is amongst the first generation of blockchain
networks to enter the crypto-verse as an early adopter of the proof
of stake (PoS) consensus mechanism and has held its relevance since
its launch through the market cycles of the industry. The network
offers the smart contract utility at a fraction of the cost of
Ethereum and is way less energy-intensive in comparison due to its
highly decentralized nature. According to a recent report by the
Bank Of America (BofA), Tezos is the blockchain network with the
second-highest amount of developer interest indicating strong
fundamentals supporting the network as developers constitute the
core aspects of the network. The network has also been validated by
the European Central Bank (ECB) when the central bank picked it as
one of the blockchains that are fully compatible with the current
fiat-biased monetary system. Tezos was chosen by the Arab Bank
(Switzerland) Ltd. to offer the bank’s institutional clients a
platform that facilitates the staking, storing, and trading of XTZ
tokens, the native token of the ecosystem. The protocol has also
partnered with Societe General, the third-largest French bank to
issue the bank’s first structured product as a security token using
Tezos as the blockchain. Tezos is now improving its user
proposition and relevance in the market with a series of
partnerships with various high-profile players spanning various
markets and sub-ecosystems moving towards institutional markets as
well. Tether Tether is the most widely used stablecoin today with
CoinMarketCap ranking it 5th on its list of top 10 cryptocurrencies
with a market capitalization of nearly $70 billion. However, its
trading volumes surpass that of all the other cryptocurrencies,
including Bitcoin. In fact, its daily trading volume is more often
than not double that of the BTC as the stablecoin is often used as
a transitionary and transaction currency for various trading needs,
in DeFi protocols, and even in payrolls across various
cryptocurrency firms. However, since its inception, its journey
hasn’t been without hiccups. Tether and the cryptocurrency
exchange, Bitfinex was held up by the New York attorney general’s
(NYAG) office citing charges of manipulation and issuing
uncollateralized USDT tokens. The NYAG also stated that only 74% of
all the USDT is circulation is currently backed. In response,
Tether put out attestation of its reserves, assuring users that the
stablecoin is actually collateralized in the right manner as
originally stated. At the end of this investigation, there were no
criminal charges levied on Tether or Bitfinex either that could be
seen as a win for the stablecoin. Although, they did pay over $18.5
million in fines and have been asked by the court to provide its
quarterly reserve reports for the next two years. In another case
running with on a similar allegation by both parties filed in the
Southern District Court of New York under the Racketeer Influenced
and Corrupt Organizations Act, or RICO, which was dismissed by the
judge in a win for Tether. Since then, stablecoin has been gaining
even more traction and adoption as it is evident that there is no
proof of any manipulation of reserves, thus cementing its place as
one of the mainstays of the crypto-verse. Ripple Ripple has been
one of the most discussed cryptocurrency projects in the blockchain
ecosystem, especially due to its prolonged trysts with regulatory
bodies over nuances that could be considered to be a sign of
resilience and commitment of the team to its original vision. The
native token of the network, the XRP token, has held its in the top
10 cryptocurrency tokens by market capitalization for many years
now amongst the various legal issues the company has faced
indicating a strong continued belief and confidence of investors in
the network and its fundamentals. XRP has been one of the most
stable cryptocurrencies in terms of price volatility which is a
sign of the maturity of an asset. The United States Securities and
Exchange Commission (SEC) announced in Sep. 2020 that they have
filed an action against Ripple Labs and a couple of its executives,
stating that $1.3 billion had been raised through an unregistered
and ongoing digital asset securities offering. The crux of the case
is that the SEC classifies XRP as an “unregistered security,” a
classification that Ripple Labs has contented in court ever since.
The marketwide perception is that the SEC vs. Ripple case is going
better than expected and Ripple has a high chance of winning the
lawsuit that has been extended too long on irrelevant
technicalities. Even veteran investor Warren Buffet’s firm
Berkshire Hathaway has invested $500 million in Brazilian digital
bank Nubank, a member of RippleNet, the protocol’s global payments
network for financial institutions, which is a positive sign for
the payment processing network’s future. Qtum Qtum Chain Foundation
launched the Qtum Blockchain mainnet in September 2017. It was the
industry’s first smart contract platform based on the same unspent
transaction output (UTXO) model as Bitcoin. After three years of
technical iteration, Qtum has gradually developed a variety of
unique technical and ecosystem characteristics, which are very
suitable for building DeFi projects, called Qtum 2.0. Essentially,
the network combined the security of Bitcoin’s blockchain model and
the flexibility of smart contracts like Ethereum, Solana, and
Binance Smart Chain (BSC). It uses a decentralized governance
protocol (DGP) that allows changes in blockchain settings to be
modified via smart contracts. For instance, the block size can be
increased without the need for a hard fork. Qtum 2.0 has been
developed to be a blockchain that is ready for business. The
platform allows for business-friendly smart contract coding,
deployment, and execution. It is also compatible with existing
blockchain infrastructure that allows it to be integrated with
existing technologies of businesses, and it’s modularized so that
new technology can be added at any time. This foundation enables
them to provide customized solutions to enterprise clients. Qtum
uses an Account Abstraction Layer (AAL) that decouples applications
from the underlying protocol, thus maintaining the performance of
the blockchain and lending the ability to add more smart contract
utility in the near future. The platform has a very big proof of
stake (PoS) network with full nodes that are only exceeded by
Bitcoin and Ethereum networks. There are a total of 1,478 Qtum
nodes active globally. Conclusion As evident, it is sort of
short-sighted to make an argument for absolute Bitcoin maximalism
as it is evident that there are several other assets, networks, and
the surrounding ecosystem that thrives on the diversity that the
cryptocurrency markets in terms of investment vehicles, i.e.,
tokens. It is undeniable that BTC is the top digital asset as it
cements its place even in the traditional financial markets as the
digital gold with more institutional investors gaining exposure to
the asset’s volatility through the ETFs listed, but that doesn’t
take away from the potential of growth that various other players
in the crypto-verse currently possess.
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