T
toknormal
Guest
Folks, it won’t have passed most people by, the fact that many (otherwise neutral) industry commentators are growing increasingly irritated by what they see as ‘bitcoin bashing’ and casual dismissal of Bitcoin's longer term viability coming from some of the Dash community.
Despite the fact that I understand the ‘useability’ concerns over bitcoin, they have good reason IMO which goes way beyond usability issues and I’d like to give my opinion as to why. (There is a good outcome for both sides so hang in there till the end if you can !
).
***************** TL;DR VERSION *****************
Do not wish for Bitcoin’s demise. Doing so is a death wish for all of crypto, including Dash.
Bitcoin is currently going through a rights of passage phase as a “monetary stock” (see below for distinction monetary/tech stock) which means it must prove itself as a store of value independently of its blockchain features (other than supportive maintenance).
If it fails that test, it will set a precedent that cryptocurrencies are not investable long term and are only as good as their technical features, that ‘authenticity’ counts for nothing and that they’re dead in the water as the safe haven alternative to precious metals. If that happens, Dash will be placed somewhere on the Tech-Stock section along with it on the graphic below. Not on the monetary section. There will be no amount of 'useability' problems that can be solved to avoid that fate.
***************** DETAIL VERSION *****************
Background. The Rise of the Altcoin Market
I don’t know how long most of you have been observing crypto markets, but I’m a kind of ‘medium termer’. Got involved in early 2013 so 4 years. Back then things were quite different. Alt coins had just started arriving on the scene and the first hint that Bitcoin might give way to ‘better tech’ was Litcoin’s huge revaluation in November 2013.
At that point, all bets were off. Everyone saw something wrong with Bitcoin and started crafting ‘solutions’ to bitcoin’s inadequacies. People started hedging all over the place - Peercoin, Litecoin, Primecoin, Quark, NxT. They all had good reason to think they were the next Bitcoin. Even Bill Stills - a long time and widely respected monetary analyst was totally convinced what the next Bitcoin was going to be.
NxT solved bitcoin’s blocktime and energy consumption problems, Peercoin solved its capacity problems by a high-fee trunk transaction network, Quark solved the mining centralisation problem and Darkcoin solved its privacy problem. Dogue and Blackcoin built the 'strongest' communities in crypto and that would carry them through apparently.
Of those, the only one to have grown and not declined is Dash and even that is still only at 3% BTC’s marketcap. I've always argued that the single biggest reason for Dash's bucking the trend is that it consistently targeted monetary properties over technology properties (see more on the specifics below). This post is a renewed appeal to not fall off that path which we will (IMO) be doing if we're short sighted enough to toxify the fertile ground in which our green shoots are rooted.
Bitcoin's Role
Taking stock of what’s sustaining BTC’s value and longevity, it clearly isn’t ‘useability features’ or it would have been dead long ago. The current confirmation backlog is nothing. If you’ve watched Bitcoin long term it’s just another river to cross. Early forking, MT Gox collapse, the malliability double-spend crisis and general mainstream press-bashing were all potentially a lot worse.
The bottom line is that Bitcoin has survived these crises by doing “little”, not “a lot”. By being passive, not active and by staying authentic. In my opinion it’s not likely to loose that appeal anytime soon and we must see Dash’s market in that context.
Monetary vs Tech Stock - What's the Difference ?
The way to look at this is to observe the growth patterns of distinctive investment vehicles over the course of the twentieth century - possibly the most rapidly evolving epoch mankind has ever known. The difference between a monetary and a tech stock is that while the latter can potentially net you faster gains, it has limited longevity. On the other hand, monetary stocks go on forever.
The problems with a tech stock are many, and represent a kind of “live by the sword, die by the sword” situation:
• they are only as good as their current feature set and therefore subject to competitive threats
• they are subject to continual divesting and re-investing for investors to make long term returns
• they can never be identified as ‘safe haven assets’
• they are subject to ‘blind spots’ (value shortfalls that competitors can take advantage of)
From a monetary analysis perspective, what’s happening right now in the bitcoin debate is nothing less than a huge stand-off between bitcoin’s identity as a monetary stock vs its demise to ‘tech stock’ status and Dash has a substantial interest in seeing the former path prevail because if Bitcoin looses - even to Dash, it seals Dash’s fate too.
What then is Dash's Role in the Market ?
This is the background (IMO) against which we should evaluate Dash’s trajectory. Primarily as a monetary stock, a long term store of value and a ‘safe haven asset’ but one which captures the market that is currently leaving bitcoin out of genuinely held frustration based on usability and other concerns.
How can Dash do that without falling into the ‘tech-stock’ trap ?
Go back to first principles. The centuries old and well understood properties of money give guidance. (This is my monetary bible-bashing moment ). They indicate that there is room for manoeuvre since “mobility” and “fungibility” are two recognised properties. We can therefore enhance these as long as it isn’t at the expense of authenticity (e.g. deploying an off-chain solution in the case of mobility and encrypting the blockchain in the case of fungibility).
The practical gains to be had are an authentic, native, highly mobile single monetary tier which also serves as a long term store of value and that people enjoy using. That is the challenge. Bitcoin does not pose any threat in this respect or even limit to Dash's market cap. Dash could for that matter exceed Bitcoin's market cap without Bitcoin having to relinquish it's "crown" as the primary crypto reserve and original monetary base. In fiat, the credit markets (commercially driven appealing directly to users) dwarf the central bank monetary base in most countries.
But make no mistake. An essential component of meeting that challenge is that Bitcoin meets its challenge, otherwise we’re all screwed and will end up in one of those isolated chart boxes on the low road to oblivion indicated in the graphic above.
Thank you for listening. Pleased I got that off my chest
Despite the fact that I understand the ‘useability’ concerns over bitcoin, they have good reason IMO which goes way beyond usability issues and I’d like to give my opinion as to why. (There is a good outcome for both sides so hang in there till the end if you can !
).***************** TL;DR VERSION *****************
Do not wish for Bitcoin’s demise. Doing so is a death wish for all of crypto, including Dash.
Bitcoin is currently going through a rights of passage phase as a “monetary stock” (see below for distinction monetary/tech stock) which means it must prove itself as a store of value independently of its blockchain features (other than supportive maintenance).
If it fails that test, it will set a precedent that cryptocurrencies are not investable long term and are only as good as their technical features, that ‘authenticity’ counts for nothing and that they’re dead in the water as the safe haven alternative to precious metals. If that happens, Dash will be placed somewhere on the Tech-Stock section along with it on the graphic below. Not on the monetary section. There will be no amount of 'useability' problems that can be solved to avoid that fate.
***************** DETAIL VERSION *****************
Background. The Rise of the Altcoin Market
I don’t know how long most of you have been observing crypto markets, but I’m a kind of ‘medium termer’. Got involved in early 2013 so 4 years. Back then things were quite different. Alt coins had just started arriving on the scene and the first hint that Bitcoin might give way to ‘better tech’ was Litcoin’s huge revaluation in November 2013.
At that point, all bets were off. Everyone saw something wrong with Bitcoin and started crafting ‘solutions’ to bitcoin’s inadequacies. People started hedging all over the place - Peercoin, Litecoin, Primecoin, Quark, NxT. They all had good reason to think they were the next Bitcoin. Even Bill Stills - a long time and widely respected monetary analyst was totally convinced what the next Bitcoin was going to be.
NxT solved bitcoin’s blocktime and energy consumption problems, Peercoin solved its capacity problems by a high-fee trunk transaction network, Quark solved the mining centralisation problem and Darkcoin solved its privacy problem. Dogue and Blackcoin built the 'strongest' communities in crypto and that would carry them through apparently.
Of those, the only one to have grown and not declined is Dash and even that is still only at 3% BTC’s marketcap. I've always argued that the single biggest reason for Dash's bucking the trend is that it consistently targeted monetary properties over technology properties (see more on the specifics below). This post is a renewed appeal to not fall off that path which we will (IMO) be doing if we're short sighted enough to toxify the fertile ground in which our green shoots are rooted.
Bitcoin's Role
Taking stock of what’s sustaining BTC’s value and longevity, it clearly isn’t ‘useability features’ or it would have been dead long ago. The current confirmation backlog is nothing. If you’ve watched Bitcoin long term it’s just another river to cross. Early forking, MT Gox collapse, the malliability double-spend crisis and general mainstream press-bashing were all potentially a lot worse.
The bottom line is that Bitcoin has survived these crises by doing “little”, not “a lot”. By being passive, not active and by staying authentic. In my opinion it’s not likely to loose that appeal anytime soon and we must see Dash’s market in that context.
Monetary vs Tech Stock - What's the Difference ?
The way to look at this is to observe the growth patterns of distinctive investment vehicles over the course of the twentieth century - possibly the most rapidly evolving epoch mankind has ever known. The difference between a monetary and a tech stock is that while the latter can potentially net you faster gains, it has limited longevity. On the other hand, monetary stocks go on forever.
The problems with a tech stock are many, and represent a kind of “live by the sword, die by the sword” situation:
• they are only as good as their current feature set and therefore subject to competitive threats
• they are subject to continual divesting and re-investing for investors to make long term returns
• they can never be identified as ‘safe haven assets’
• they are subject to ‘blind spots’ (value shortfalls that competitors can take advantage of)
From a monetary analysis perspective, what’s happening right now in the bitcoin debate is nothing less than a huge stand-off between bitcoin’s identity as a monetary stock vs its demise to ‘tech stock’ status and Dash has a substantial interest in seeing the former path prevail because if Bitcoin looses - even to Dash, it seals Dash’s fate too.
What then is Dash's Role in the Market ?
This is the background (IMO) against which we should evaluate Dash’s trajectory. Primarily as a monetary stock, a long term store of value and a ‘safe haven asset’ but one which captures the market that is currently leaving bitcoin out of genuinely held frustration based on usability and other concerns.
How can Dash do that without falling into the ‘tech-stock’ trap ?
Go back to first principles. The centuries old and well understood properties of money give guidance. (This is my monetary bible-bashing moment
). They indicate that there is room for manoeuvre since “mobility” and “fungibility” are two recognised properties. We can therefore enhance these as long as it isn’t at the expense of authenticity (e.g. deploying an off-chain solution in the case of mobility and encrypting the blockchain in the case of fungibility).The practical gains to be had are an authentic, native, highly mobile single monetary tier which also serves as a long term store of value and that people enjoy using. That is the challenge. Bitcoin does not pose any threat in this respect or even limit to Dash's market cap. Dash could for that matter exceed Bitcoin's market cap without Bitcoin having to relinquish it's "crown" as the primary crypto reserve and original monetary base. In fiat, the credit markets (commercially driven appealing directly to users) dwarf the central bank monetary base in most countries.
But make no mistake. An essential component of meeting that challenge is that Bitcoin meets its challenge, otherwise we’re all screwed and will end up in one of those isolated chart boxes on the low road to oblivion indicated in the graphic above.
Thank you for listening. Pleased I got that off my chest
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