First mover advantage

Written by knut.svanholm | Published 2017/06/05
Tech Story Tags: bitcoin | blockchain | collectables | investing | cryptocurrency

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What would you rather own — the first Donald Duck comic book ever published or the best Donald Duck comic book ever published? Which is the more valuable one, objectively? Subjectively, some might even think that the first one is the best one but there is no subjective opinion that will change the fact that the first one came first, nor will there ever be. History tells us that an untarnished first of anything culturally significant will always have value. The best Donald Duck comic book? What does that even mean? Whether or not something is good is entirely subjective! Everyone gets to decide which one they like best but no one gets to decide which one was published first.

There’s a lot of confusion regarding facts and opinions these days. Fake news, alternative facts and weighed opinions are terms we hear on a daily basis. Critical thinking is hard and staying unbiased seems a daunting task. But there are still facts that everyone agrees about. Two plus two equals four, the sun rises in the east, politicians are mostly hypocrites and Bitcoin was the first cryptocurrency.

Other cryptocurrencies might have properties that some consider better, faster or more attractive but these are all subjective views. Opinions. No opinion can change the fact that Bitcoin came first and first mover advantage matters a lot. Even in the unlikely event that another cryptocurrency should become the dominant one Bitcoin will always be the first. This means that as long as there’s an internet and as long as there’s a fraction of a Bitcoin with a usable private key, Bitcoin will always be valuable. Add to this the network effect, Metcalfe’s law, which states that “the value of a telecommunications network is proportional to the square of the number of connected users of the system” and that Bitcoin’s user base keeps growing and growing. When every person (or rather every intelligent entity) on the planet is a Bitcoiner it’s value will still rise as long as we continue to produce goods and services. The sky isn’t the limit, there is no limit! Ironically, all due to the limited supply of Bitcoins.

So, in the long term, what would you rather own — the first cryptocurrency ever issued or the whatever one?


Published by HackerNoon on 2017/06/05