Bitcoin, the first and most well-known cryptocurrency, was created with the goal of becoming a decentralized, peer-to-peer electronic cash system.
While Bitcoin has made strides toward this goal, there is still a long way to go in terms of widespread adoption and acceptance as a currency.
Bitcoin’s Intended Purpose and Shortcomings
Bitcoin (BTC) was initially created to function as a decentralized peer-to-peer electronic cash system that would allow for secure, fast, and low-cost transactions without intermediaries like banks or other financial institutions.
However, despite some early adoption and merchant acceptance, BTC has yet to achieve widespread adoption as a currency. Many still view BTC as a speculative investment rather than a means of exchange, and its price volatility makes it difficult to use for day-to-day transactions.
Bitcoin maximalists argue that it is a store of value and a hedge against inflation, but its volatility leads to wild price swings, making it unreliable as a store of value.
BTC is down over 70% from its all-time high of $69,000 in November 2021. This kind of drop does not inspire confidence that it can be a store of value or a hedge against inflation.
Is it time for Bitcoin to do more? Can Bitcoin evolve into something greater than an electronic cash system that lacks adoption?
The answer may be in collaboration rather than maximalism.
Benefits of Integrating Bitcoin with Other Blockchain Technologies
By collaborating with each other, various players in the cryptocurrency industry can share knowledge and resources, leading to greater innovation and a more robust ecosystem. Integrating BTC with other blockchain technologies could allow Bitcoin to benefit from the features and capabilities of other cryptocurrencies, leading to a more versatile and usable currency.
For example, the Lightning Network is a layer-two scaling solution that allows for faster, cheaper, and more private transactions. Additionally, integrating Bitcoin with Ethereum’s smart contract capabilities could allow for even more sophisticated applications and use cases.
Another example of integration is what the folks at Stacks are building on top of Bitcoin.
Muneeb Ali, the founder of Stacks sees BTC as a building block for a decentralized internet, offering greater privacy, security, and control to users. Stacks allows developers to build decentralized apps on top of the Bitcoin blockchain using PoX to inherit the network’s security and stability.
In essence, PoX works by allowing users to lock up BTC in exchange for a native Stacks token (STX). By doing so, users can participate in the Stacks blockchain and earn rewards for helping to secure the network.
This approach not only enhances the security and decentralization of the Stacks network. But also helps to align the incentives of BTC holders with the success of the Stacks ecosystem.
The Stacks approach seems to make sense. Why not unleash the full potential of the most dominant cryptocurrency in the world?
Others disagree and we spoke with someone that holds the view that Bitcoin is fine just the way it is.
Carl Runefelt: “I Don’t Think Bitcoin Needs to Improve”
“I bought all my watches and all my cars with crypto.” This is a quote from Carl Runefelt, a former Swedish cashier turned BTC maximalist. Runefelt believes BTC is already a fully-realized blockchain that requires no improvement.
Mr Runefelt, who goes by “The Moon”, has found the best use case for Bitcoin, which is apparently getting in early, then cashing out to buy bespoke watches and fast cars.
When asked about the lack of utility with BTC he first attacked the premise of the question and then went on to not answer it.
“This question is clearly wrong. Bitcoin has multiple utilities. Bitcoin is the best form of money in the history of humans. It is the most secure form of storing wealth, it is the best way to move value across borders and across the internet.”
So, I think the features and utilities of BTC are massive and extremely important for the freedom of money and freedom in general.”
A Store of Value?
When asked how BTC could be considered a store of value when it is highly volatile, Mr. Runefelt responded.
“Of course it’s the nature of markets- but what I think is the most important thing is to invest in yourself and go full-time crypto, that’s why I have all of my business, this is in crypto.”
This is an interesting view but perhaps some who have gone “full time crypto” wouldn’t agree. For example, a small business owner who invested $10,000 in bitcoin in November 2021 would be down over 70% to date on that investment. It’s hard to buy watches and cars with those kinds of losses.
Along with pumping his lavish lifestyle in Dubai on social media, “The Moon” also runs a crypto jobs board. Which he promoted almost as much as his maximalist views on bitcoin.
We tried to pin Mr. Runefelt down on bitcoin’s volatility and he defaulted to the argument that bitcoin is “new”.
It’s actually been around for 14 years and still hasn’t fulfilled its original purpose.
Nonetheless, Mr. Runefelt continued:
“So honestly I don’t think Bitcoin has to prove itself any longer because Bitcoin has been around for 14 years and every single day that Bitcoin survives is another proof that Bitcoin is here to stay and increases the chance of success for the next 100 years.”
Give it Time
Runefelt expressed a fatalistic view that since BTC is “new” it needs to be given time to shed its volatility.
“It’s just an inevitability when you have a new asset class trying to find its price, discovery, supply, and demand is going to have to decide what should the value of one Bitcoin be, should it be $10 to $10 million $1 million?”
No one knows what the price will be in 20 years from now and that’s why the volatility is there.”
Yes, Bitcoin has “survived” but has done so as a speculative asset-not as a store of value.
The last point made by Runefelt seems to directly contradict his earlier advice for others. Encouraging people follow his lead and go “full time crypto”.
Here, we see “The Moon” has entered a new phase-about his earlier statement that Bitcoin was fine as it is.
“Bitcoin doesn’t have to change as a store of value, it’s already the best we’ve ever seen in human history. I believe that as the world changes, Bitcoin can change with it, you can upgrade. Bitcoin can adapt. It can have second layers on top of Bitcoin, so BTC will change over time but the fundamentals of Bitcoin will never change.”
Maximalists believe Bitcoin doesn’t need improvement. But others in the crypto community see the potential for collaboration.
Collaboration Between Crypto Communities and Companies
Collaboration between different crypto communities and companies could lead to a more cohesive and effective ecosystem. For example, the Enterprise Ethereum Alliance is working together to develop and implement blockchain-based solutions.
This type of collaboration could lead to greater standardization. As well as interoperability between different blockchain systems, leading to increased efficiency and adoption.
Efficient, Secure, Scalable
A more collaborative and integrated approach to Bitcoin may build a more efficient, secure, and scalable ecosystem. By working together, different players in the industry could share resources and expertise, leading to greater innovation and standardization.
Besides, integrating different blockchain systems could lead to increased adoption. And mainstream acceptance, as well as enhanced security through greater diversity and redundancy.
Bitcoin’s original purpose was to create a decentralized peer-to-peer electronic cash system. But it has yet to achieve widespread adoption as a currency. Integrating BTC with other blockchain technologies, and moving away from maximalism could unlock the full potential of Bitcoin. By working together, the industry can develop a more efficient, secure, and scalable ecosystem that benefits everyone.
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