Bitcoin No Longer the Ultimate Hedge King
Three months ago, in the post Bitcoin Will Eventually Become Obsolete I noted:
As the market cap increases we will witness a steady drop of BTC dominance and a rather crazy investment into altcoins that will overshadow May of 2016. It will be slow bleeding that will last over a year. I don't believe Bitcoin will serve any purpose in the future other than an antique for Bitcoin evangelists. Holding Bitcoin will be similar to keeping your wealth in a precious rare rock that weighs a ton. It will be cool to look at but hard to secure or transact with.
I am not a fun of speculation but I am an avid student of anthropology and human nature. Here is why this Bitcoin Reality unfolds.
Ask any Bitcoin oldtimer and they will assure you that the reason alt coins exist is to accumulate more Bitcoins. Thing is, this rhyme of thought implies that Bitcoin is the only legit game in town. The overall blockchain development through other projects is an elaborate scam that aims to fool new investors into funding the ones that got earlier.
The irony lies in the fact that opposers of Bitcoin think exactly the same as the maximalists do. The truth is much grayer and it implies economic realities neither side is ready to accept. Bitcoin is a novel, digital medium of exchange that offers more freedom and decentralisation when compared to traditional Fiat forms. It is not, not it can be the ultimate store of value.
The other hard truth is that the Blockchain and Blockchain-like technologies are here to stay. If you are a Bitcoin maximalist then you are betting against the inevitable future of internet 2.0. It is like being a fax-machine maximalist in the 1990's. It is the old story of "us" vs "them" that gets short sighted time after time.
A human being first and foremost seeks a medium of exchange that is fast, secure and private. Bitcoin used to be the case but this is no more true. Projects like Zcash and the upcoming BTCP do this much better than Bitcoin. What Bitcoin came to be is a store of value that it can now be manipulated through the FIAT market of Futures. Other coins will soon follow. Big hedge funds short a given coin, buy cheaper in exchanges, sell the custom top, short again, rinse, repeat. Child's game.
We are nearing 1 trillion market cap and things seem to be taking their own way. Centralised projects like Ripple are killing it since Banks have the ultimate hedge in this market while the masses buy the "cheap" coin (or whatever the big boys tell them). They can realistically bring the whole thing down if they wanted. With alts being so low in the market cap they can dethrone Bitcoin overnight. All they have to do, is use manipulation through the futures market and hedge like crazy into alternative currencies — which is exactly what is happening right now with institutional money.
Projects like X8 Currency can do hedging much better than anything else we have seen before. Backed by Gold, Fiat and the ingenuity of an A.I, one can use the token to be completely hedged against any market volatility. Think of it like DAI.
Bitcoin cannot be used as Hedge or store of value in a market where Fiat and Crypto come together in such an explosive way. Being deflationary and having a network effect becomes an old tale for newcomers. Most people want a cheap, fast way to transact that can have a potential uptrend. This is why we hear most newcomers hoping for a $3 ripple to be worth 3000 one day. Most people people have no idea what market cap is yet, since they are economically illiterate, they will still choose a coin with high velocity.
In the coming months we will see the market shake like never before. Bitcoin will most likely slow bleed while those penny coins that went parabolic over the last month will crash hard. I believe we will not see a total market collapse for at least another 6 months. What will most likely experience crash from these new rallying coins while value will continue to accumulate to the legit projects. Bitcoin will continue to be manipulated up until institutional money fill their bags. Then the real game begins.
This is mainly due to very high cost of BTC mining. Which cannot be sustain.
I'm still only dipping my toe into this crypto/blockchain stuff, but it seems fairly obvious that Bitcoin isn't going to play a very big role in the future. Not in its current form. Pioneering technology doesn't usually hang around long, and in "Internet years," Bitcoin is ancient.
It's already had its flaws pointed out, and other coins were built off of Bitcoin to address that. From that standpoint, it was obsolete as soon as the first altcoin came out. It's true that Bitcoin has been tremendously successful, but in a way, that blessing is also its biggest curse.
It's the first, it's the biggest, it's the most recognizable. That makes it a sacrificial footsoldier on the front lines. It's clearing a space for blockchain technology and a culture of decentralization, but it's doing it by stepping on all the landmines that were blocking the way.
Indeed. Couldn't agree more. The first one is usually the beta project. The pilot. Soon alternatives come to fill in the gap
I believe that there will be numerous niche that a certain coin will rule... as a currency, it cannot be Bitcoin, one crypto with better features will eventually topple it.
With smart contracts it will be a tough battle between Etherium and EOS, I will place my money on EOS though. With machine communications, IOTA is a clear winner nowadays...
Steemit is the one for sharing media platforms, but a lot will surely challenge it.
Many new technologies are still going to emerge from this. Many will offer promises, few are going to be able to deliver.
Yes most new coins and ICO's are just like high school projects with no substance to back it up. You have to separate the grain from the chaff. If we find one, then it is a treasure that we can build on for life..
Minds Tokens are comming to compete with Stemmit. I wrote about the fact 8 days ago here https://steemit.com/cryptocurrency/@greenmask9/minds-launches-crypto-tokens-in-1q2018-making-major-competitor-to-stemmit
Until they reveal the details of their crypto token and how it will be earned you can't really say it's competion. Other than steem clones (golos, yoyow) the only other aproach that has been attempted to merge social media and blockchain are just tipping platforms with a centralized solution for content storage (Yours network...for example).
Of course you are right. They may not succeed. But as an author for this site, I trust admins will do things as they should to form a competitor.
What's happening right now in crypto is a truly, once in a lifetime experience.
I believe we haven't seen the last of what Bitcoin has in store yet.
Wait, watch, hodl, and profit.
-The Beached Whale-
Editor in Chief - The Anderson Report
Just to give you a heads up :)
Used your gif in this post and part of the payout is going to you for letting me use it!
https://steemit.com/steem/@ashleykalila/the-steem-blockchain-is-more-amazing-than-i-ever-even-realized
Bitcoin promises to come. there are some rumors right now. bitcoin will lose value, ethera will gain value. but I believe BitCoin will be much more valuable. @kyriacos
Perhaps but why do you think so?
80% of bitcoin miners are in China. But about 70% of the bitcoin's wealth is in the Americas. The shan market is under Chinese rule. Without the miner, the bitcoin is already over. But if America is investing in mines and taking control, Bitcoin can be valued. and ı upvoted to you :)
Alt coin is taking possesion ,thats good news for crypto market & bitcoin is the part of cryptocurrency,any how bitcoin is the king of cryptocurrencies
not for long
Bitcoin is banned in China and South Korea, which, in my opinion, supports the fact it will not dominate the cryptomarket. I dislike the fact graphic cards are more expensive because of miners, so I bet on Bitshares for now. IOTA and Etherum are also strong right now.
It all depends on supply and demand. Mining will be a thing of the past. I am not sure if Proof of Stake is sustainable either.
If Proof-of-Work and Proof-of-Stake are not sustainable, then what consensus algorithm type do we have left? Will it be game over for the blockchain then?
What coins do you think will be the first to overtake bitcoin then? Will it be ripple or etherium bitcoin cash or something that has yet to really explode?
I wonder why dash doesn’t do much better in the markets with such a low fee and good reputation. Ive started to keep a lot of my funds in it because it’s cheaper to move around. I don’t have thousands to play with so a bitcoin fee isn’t really reasonable to make transactions with. If they manage to fix the crazy fees it can stay on top, otherwise, I give it a few months.
I think Ethereum will dominate once Cosmos comes out. I am talking in the 5K range
Dash is a scam.
Why is it a scam?
Dash isn't scum, it redirects through the Tor browser making it one of the most secure and likely to do well coins.. It's huge on the deep web, and the deep webs much bigger that the clear-net.. You guys are to opinionated to make any real money.
good post. I agree.