Is Bitcoin the Modern-Day MySpace?

Over the past few years Bitcoin and other cryptocurrencies have experienced significant moves to the upside and downside. This volatility is likely to continue, but we are too early in the game to name an eventual winner.

There is no doubt Bitcoin is the clear favorite, although that is not universally shared. While many believe Bitcoin will increase in price significantly (perhaps to the moon), there are many who believe Bitcoin will become worthless. In the media we tend to hear polarizing and extreme views on the future of cryptos.

Stepping back and taking a thoughtful (non-emotional) view brings up one clear question: What if the success and interest in Bitcoin serve as an opening to using digital assets, but is not the eventual “winner?” MySpace was the clear winner in social media early on. Facebook is today. When the internet was in its infancy, search engine winners were Yahoo! and Alta Vista. Google has become such a winner today, that instead of saying, “search it” we often just say “Google it.” How you would respond if your friend said, “Oh, just Alta Vista it?” Being an early winner is no guarantee to becoming the eventual winner.

Overview of Digital Assets & Blockchain

I recently took a course offered by the Digital Assets Council of Financial Professionals (DACFP) and obtained a certificate in blockchain and digital assets. I did this because I wanted to learn more about them. Unlike many in the space that already have a strong opinion on the future of Bitcoin, I entered without any bias whatsoever. I can see Bitcoin increasing significantly in value and I can see it becoming worthless. I am not rooting for either one.

While I may have a certificate, my understanding is still in its infancy. Heck, the entire crypto space is still in its infancy. Making bold claims based on very little history and data is dangerous. I am trying to take a more thoughtful approach to this topic, understanding that my opinions on the topic may change as new information comes to light.

Benefits of Digital Assets & Blockchain

The course got me excited about the potential for digital assets and blockchain. I am particularly interested in the benefits of reduced transaction costs and micropayments. I think the possibilities are endless here. From allowing a YouTube content creator to charge one-half cent to watch a “how to” video – to paying for each sitcom or movie we watch rather than pay a cable or streaming company a subscription fee for stuff we will never watch.

Blockchain has a lot of potential uses. I think the ability to own and sell something digitally (using NFT) is increasingly important in our more digital society. Personally, I love the idea of Smart Contracts on blockchain. One benefit of Smart Contracts is that they act like an escrow account. The terms are listed by both parties and when one party fulfills their duties, the funds from the other party are released. It is automated and no more tracking people down. This can be used among companies, between companies and individuals and between individuals themselves. This would significantly reduce issues with payments and allow two parties to engage in an atmosphere of transparency and trust.

A Sea of Cryptocurrencies

Bitcoin is not the only game in town. There are many others, including joke cryptocurrencies that some are taking seriously. Based on the current offerings, Bitcoin seems to be the strongest and the most likely to survive. But that isn’t to say the eventual winner has not yet been developed. We are truly in the infancy of cryptocurrency.

While Bitcoin has many great attributes that are attractive, it has several drawbacks. I believe it is entirely possible that new cryptocurrencies will emerge that take from Bitcoin’s greatest qualities and seek to reduce the drawbacks. This could be a process that spans many years and several different promising cryptos until an eventual winner is found.

The bottom line, as we have seen from experience, is that just because something is the leader or apparent winner today, doesn’t mean it will be the eventual winner. Who knows, maybe in 10 years we will all think of Bitcoin as we do of MySpace or Alta Vista today. In my opinion, Bitcoin will serve as an important stepping stone to the development for the eventual winner. And just like we have many different global currencies, maybe we will have several viable cryptocurrencies with the ability to exchange among them. Who knows!

It will be fun to see how this plays out.

Related: Can Someone Dumb Down NFTs?