I recently wrote a piece titled: “Why Bitcoin Will Fail” (source).
I republished that same story right here on Hacker Noon, edited the title, and added in “Devils Advocate” because I had a couple of people send me DM’s, or make public comments asking me some variation of ‘do you really think Bitcoin is going to fail? …but …but, I thought you were a crypto-bro..?’.
Holy moly, some people are truly interesting creatures! And by that, I mean that they are thick in the head.
I explained right at the very beginning of the article that it was a devil’s advocate type of post:
In this article, we'll look at some of the reasons why many financial analysts believe the demise of Bitcoin is imminent. And for clarity purposes, this is a bit of a devil's advocate piece. This is a crypto blog after all. And so naturally it will also touch on cryptocurrency enthusiasts' beliefs to give you insight into the actual fate of the BTC market.
Meaning, that I was purposely looking at Bitcoin from a critical point of view, or at the least, taking a neutral approach and considering reasons why Bitcoin might fail. I was trying to champion the lesser accepted idea for the sake of argument.
I think it is important to do this kind of work. This is what separates shillers and crypto-TikTok-bros from the rest of us. We have to look at things rationally, accept the good, the bad, and everything else in-between, and then come up with our own conclusions at the end of the day.
So with that said, let me clarify something else and be very specific. I am not a Bitcoin Maximalist, but, I am a Bitcoin supporter. I do not actually think and believe Bitcoin will fail. But I wouldn’t care if it did.
Frankly, unless it’s some WEF-globalist-backed project like XRP or LINK, generally I think it’s all OK. I support crypto as a whole, in general, and that includes Bitcoin, it must include Bitcoin.
Imagine saying you support crypto but not Bitcoin. That’s crazy. Yet that is what we see everywhere.
It’s like saying you dont support candles because LED lights exist. Insane.
Remember Bitcoin is technology first and a financial product or digital-asset second.
And this is the first part of my reasoning.
Bitcoin as in, Bitcoin the technology is never going anywhere. I’m not even bothered with trying to explain it here. It’s been done a thousand times before. Here is a great video by Andreas Antonopolous that explains why Bitcoin (the technology) will not fail.
But let’s talk about the financial side. Because this is what people mean when they ask that question and wonder whether or not there is a chance this thing can fail.
The only thing that matters in this argument in my opinion (and please tell me if I am wrong in the comments) is whether Bitcoin Maximalists exist and if they can bring in new maximalists. Here is my argument.
Bitcoin maximalists are evangelical. When I say evangelical, I mean it with the emphasis on converting outsiders, you know, screaming it from the rooftops of Twitter and the windows of Facebook.
And this is the point that I wanted to raise as my main argument for why I don’t believe Bitcoin will ever fail, even after looking at both sides of the argument, which is what that first post was intended to do in the first place, crypto-bros! To force both myself, and the reader to consider the alternatives.
Back to the maxis!
The maxis. They are evangelical Bitcoin crazies. And it’s not even a bad thing. Let me explain…
This is social, it’s psychological, it’s human.
Bitcoin has all of the things it needs to have to garner the fervent support that it needs to grow and age with humanity. And this goes all the way down to the emotional, and chemical reactions in the brain, pulling forward thousands of years of what it is to be human, all the way from the deep reptilian parts in the brain that push us to do and seek certain things.
Shelter, food, and sex.
Bitcoin has a brand. A well-known one. It’s very recognizable. The brand is high-value. High-value signals shelter, food, and sex.
This is why you see Bitcoin girls on Twitter with their bazookas out, it’s all psychological.
It has a social aspect to it too, very much so. In fact, it needs it. For Bitcoin to achieve the level of success it has had it needs for me to be able to introduce it to you, and so on. That is how network effects happen.
Bitcoin was first over the line in the case of crypto network effects, which usually means it wins the network effect war just by being first because it has the jump on everyone else.
This ensures its status as king from a social and network point of view.
If I want to send you Bitcoin you need a Bitcoin wallet, that is how it works at the most basic level, and at the larger level it means that anyone with Bitcoin can transact, swap, share, or trade value in Bitcoin with anyone else within the network on the global level.
Most important of all Bitcoin has value.
Argue it all you want until you are blue in the face, argue the level of value, I don’t care, It has value.
There’s value in sending someone money from computer to computer across the world without a bank, no matter what any boomer says, there just is, it’s there on paper backed by over a decade of results with hundreds of thousands of transactions per day and at last look almost 2 billion transactions since its inception.
So let’s take a look at all of that. We have a network of people, a social network of people actually, that all agree on something, that all recognize that this something as a specific type of technology, in this case, financial value-sending-technology, and they all agree that the technology itself has a value, a very specific value by the way, which for argument’s sake is what is called ‘the bottom’.
Now let’s throw something amazing into this mix, lets's throw a restriction into this mix.
Let’s restrict this technology and make it so there are only ever going to be 21 million of these valuable bits. And by the way, I know what you are thinking, ‘hang on we have seen stuff like this before’, sure, but not exactly like this, which is what makes it special.
We have seen Apple, Facebook, Google, and the Ford motor company before and you can argue those things match some of the criteria laid out here.
What we have not seen? A restriction in the supply of the thing.
You can argue that there was only a limited supply of the first Apple iPhone, the A1203, with 6.1 million sales, but this is very different (some new-unopened models sell for a very high price by the way). This thing is not a physical thing. It’s digital 1’s and 0’s. It doesn't need a box to uphold its value. And anyone, anywhere, removing age restrictions and countries where the Internet is hard to come by, anyone can speculate and bet on this value, shooting it up or making it plummet.
This creates the perfect set of properties for this thing to succeed. And meanwhile, its value shoots all over the place, but always steadily growing.
Bitcoin is not going anywhere.
Bitcoin has a level of spiritual, religious-like support and devotion from these groups of hardcore followers and financial speculators that will ensure it never fails.
These people will go to the grave never uttering a bad word about Bitcoin!
You have to understand these people are in a cult no different from the Apple cult, or the Ford cult, only they also have an added financial incentive!
Think about that for a second.
Apple fanboys argue with PC fanboys over minor technical specifications, Ford drivers argue with General Motors and Toyota drivers and eventually take it out onto the drag strip, but they can’t argue backed by incentivized value because that is not a factor. In Bitcoin (BTC) it very much is a factor and a very dominant and important one.
Bitcoin is a team that pays its members in a very big way if they hold on long enough.
You have to understand that Bitcoin has developed a cult following.
It’s not even ‘cult-like’, it is a cult. If you think I am being hyperbolic, go type #Bitcoin into Twitter and look at the results from the people that have the most followers. It’s insane.
You’ll notice that they all use the same language, they all look and behave the same way, and they are devout Bitcoiners, all praying and singing in the church of Twitter to their prophet Satoshi Nakamoto.
I sometimes think that if Satoshi Nakamoto was a real person, I have no doubt in my mind that he would be able to convince these zealots to all move into his caravans on his private rural land and then he’d shagging all the devotee’s wives, brainwashing the kids and making everyone drink his special Bit-Juice on Sunday while doing naked yoga and chanting crypto-bro memes.
All joking aside, this is what it is. It is so.
Bitcoin has religious fanatic supporters who are not only complete and utter fanboys and girls but these supporters have an additional incentive which is money. They all want to get rich. This is a recipe for success and funny enough, it’s also a recipe for the wild swings that you see Bitcoin go through but there is always a bottom, there is always a bottom and I believe the bottom is the true value.
Bitcoin the technology is very unlikely to fail.
BTC the currency and digital asset I have argued here is just as unlikely to fail. They are not the same but they are tied at the hip.
And by the way, even if it does fail, the shit coins, and altcoins will grab the torch and keep running. The value will be moved from BTC to whatever the next thing is.
Andrei R - cryptofireside.com