What is the probability that BTC will actually be overtaken by another crypto?

When the famous Satoshi Nakamoto first designed his masterpiece, few could imagine the nearly $ 63,500 high that sent investors frenzied. Even today, the price of the very first cryptocurrency is sometimes hard to believe and investors might pinch themselves every now and then. In addition to Bitcoin (BTC), altcoins such as Litecoin (LTC), Ether (ETH) and Bitcoin Cash (BCH) took their place on the roller coaster – and more recently the DeFi giants Polkadot and Cardano.

But in the long run it is difficult to see the future of a coin in uncertainty by looking into the crystal ball. Ray Dalio made valid points in his criticism of Bitcoin, arguing that uncertainties about how governments will react to digital assets that replace fiat currency in use are a potential concern. He further argued that the Bitcoin blockchain will soon be obsolete and without central governance to adapt it to the emerging blockchain technology, a superior coin could overtake it.

Related: DeFi won’t be long without unlocking Bitcoin’s $ 250 billion treasure chest

And that gets to the point: Bitcoin’s underlying blockchain protocols are very limiting in terms of enabling broader financial applications. Given Bitcoin’s proof-of-work transaction algorithm, running a massive DeFi ecosystem on the Bitcoin blockchain would be unthinkable.

Despite its limitations, it’s hard to predict whether innovative advances in the blockchains of competing coins will be enough to overtake Bitcoin’s success. It all depends on the utility factor: will crypto remain a store of value or will it be a viable alternative to exchanging values?

Related: Has Bitcoin Proven to be a Reliable Store of Value in 2020? Experts answer

Emerging Blockchain Technologies and the Success of DeFi

Since Bitcoin began a little over a decade ago, the blockchain industry has spawned hundreds of different projects, each one aiming to forge a new coin to fame. Many have made it in the long run. Ether, the second closest coin to Bitcoin in terms of value, continued to hit new all-time highs in April, confirming not only the potential of the coin as a store of value, but also the potential of Ethereum as a blockchain network.

Related: Where does DeFi’s future belong: Ethereum or Bitcoin? Experts answer

Similar to Ethereum, a number of projects aimed to mimic the titan that Vitalik Buterin and his staff built, such as Cardano, EOS, and most recently the hot and popular polkadot. Each project tries, with varying degrees of success, to expand the boundaries of the other. Hype has been the bulk of what has been delivered to users as only time will reveal the true validity of these projects.

Regardless of the blockchain projects and their creative names, they have advanced an ecosystem of collaborative development. Together they have developed decentralized apps or DApps that can free people without bank details from the doldrums of impoverishment, opportunities for the financially excluded and new investment opportunities for the already savvy.

Related: It’s time to put the dukes down and work together on the future of blockchain

The flourishing of coins and DApps gives many outsiders a lot of optimism and hope that there is real potential to fuel a booming decentralized financial ecosystem – or at least a mix of it combined with centralized markets. But all of this is thanks to the belief in the value of Bitcoin, which is the benchmark for many investors.

Related: Was 2020 a “DeFi year” and what is expected of the industry in 2021? Experts answer

Bitcoin’s store of value is what is really in your head

What drove the curiosity of investors, developers and crypto enthusiasts alike was the appeal of Bitcoin as a store of value. Bitcoin is deflationary against fiat currencies; So, in times like the COVID-19 pandemic, the appeal of Bitcoin got scorching hot.

Related: How has the COVID-19 pandemic affected the crypto space? Experts answer

While discussions about Ethereum, Polkadot, and other blockchain platforms caught the attention of the DeFi world, many outsiders remained deaf to them and fixated on coin prices. And that’s why Bitcoin’s appeal largely remains as a store of value.

Related: The Butterfly Effect: Why DeFi Will Force BTC To Break Its 21 Million Supply Cap

Many normal private and institutional investors do not have a sure understanding of the inner workings of crypto. According to a Cardify survey, only 16.9% of crypto investors “completely” understand it, while just over 33% of them have limited or “zero knowledge”. Over 40% of crypto investors are newbies riding the wave of hype. It is debatable that the barriers to entry into the DeFi world are quite high and literacy is rather difficult to achieve, but that’s a story for another time.

Related: Institutional investors aren’t going to mainstream Bitcoin – you will

Additionally, institutional investors continue to be wary of the volatility issues Bitcoin and other cryptocurrencies face, with ongoing predictions of an impending bubble – another signal that underlying blockchain technologies are less of a priority. And that’s exactly why other coins will not overtake Bitcoin. As long as the mainstream fixation remains tied to the coin value rather than the underlying blockchain value, Bitcoin will be high on the cryptocurrency podium. Whether investors can learn more about the inner workings of the DeFi world will determine how much value investors will find in the underlying technologies of new and emerging coins.

Right now, Bitcoin is and will likely be the king of the hill for a long time as the price continues to rise and mainstream investors jump on board.

This article does not provide investment advice or recommendations. Every step of investing and trading involves risk, and readers should do their own research when making a decision.

The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.

Ariel Shapira is a father, entrepreneur, speaker, cyclist and founder and CEO of Social-Wisdom, a consulting agency that works with Israeli startups and helps them build connections to international markets.

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