BTC Sessions - Bitcoin VS Altcoins: Why BTC Still DOMINATES ep131

Episode Date: December 28, 2020

Despite thousands of competitors that boast improvements in speed, cost and features, Bitcoin continues to dominate the cryptocurrency ecosystem. Why is this? Today we examine the answer. Crypto diversification numbers and consequences: https://www.youtube.com/watch?v=5LZS8lt_hNI Running a node: https://www.youtube.com/playlist?list=PLxdf8G0kzsUXSgv6TahOzg5mhNNprVKjM Using Lightning Network: https://www.youtube.com/playlist?list=PLxdf8G0kzsUWcgEJLH9AHTN3KQzoN2HTs More on why Bitcoin stands out: https://medium.com/bull-bitcoin/my-path-to-bitcoin-maximalism-c77c53466cb5 Bitcoin Can’t Be Copied by Parker Lewis https://unchained-capital.com/blog/bitcoin-cant-be-copied/ Great recession articles: https://www.britannica.com/topic/great-recession https://www.thestreet.com/politics/what-was-the-great-recession-14664025 SUPPORT THE SHOW: LEDN Bitcoin backed loans –  get $25 free https://bit.ly/397rlLN Get Wasabi wallet for Bitcoin privacy https://wasabiwallet.io/ Cobo Vault: secure your Bitcoin! https://bit.ly/2GgMFlH BillFodl: get your wallet backups in solid steel. https://privacypros.io/ Bitrefill: use Bitcoin to purchase gift cards https://www.bitrefill.com/buy/?code=O04UMic9 LIGHTNING tips: https://tippin.me/@BTCsessions Telegram channel: https://t.me/btc_sessions

Wasabi wallet and fairly private. Why is it that Bitcoin absolutely dominates the cryptocurrency ecosystem as a whole? One would think with so many alternative currencies and altcoins out there that one would improve upon Bitcoin enough to take that top spot. But that has not happened. Why is it that a currency that was created 12 years ago has remained on? top the entire time, despite being slower, despite being more expensive than a lot of the alternatives. Well, today, we're going to answer those questions. I am Ben with the BTC sessions, and this is your daily session. Before we dive in, of course, quick shout out to sponsors of the show,

leaden.com. This is where you can use your Bitcoin for a variety of different services. Of course, they have their Bitcoin-backed loans, where if you need to get your hands on dollars, but you don't want to sell your Bitcoin because that's a taxable event, and you may be worried about having a buyback in at a higher price, this could be for you. They also have their Bitcoin and USDC savings accounts with interest rates of up to 11.7% annually paid monthly, and they've got their B2X offering, which uses the same loan mechanism to instantly buy more Bitcoin, effectively doubling your Bitcoin on the spot. If you want to check them out, there's a link in the show notes down below. If you click that link and opt to get either of their loan products,

they will toss you $25 into your savings account for free. Up next, we have the Kobolvalt. This is one of my regularly used hardware wallets, and I love it because it is 100% air-gapped. This means you never plug it into an internet-connected device. Everything is done via QR code, meaning that the keys to your money are held safe and offline. Now, this thing has a secure element. It's open source firmware and it's usable with all of my favorite wallets like Bitcoin Core, Electrum, Wasabi on desktop, and Blue Wallet on mobile. And this thing is also super convenient to use for multi-sake solutions. So be sure to check it out.

For reference, I'm using the Kobo Vault Pro. It has the fingerprint scanner and the rechargeable battery links down below. Now, I live on Bitcoin. My income is Bitcoin and I pay my bills with Bitcoin. And one of the ways that I can do this is via bit refill. This place has pretty much gift cards for anything you could imagine. And it helps me do things like eat and get gas and go shopping if I need to. All of those things can be found on bit refill.

And the beautiful thing about it is when I'm shopping here and getting my gift cards, I'm earning some of that Bitcoin back. I'm earning Sats back as I shop. So I can't say enough good things about these guys. These are beautiful if you are living on Bitcoin. Or have you just seen the price gone up and maybe you need to treat yourself or you have some expenses that you need to cover? Head to bitrefill.com and they will get you covered. And finally, if you're backing up any wallet, maybe your cobo, maybe something else, maybe just a wallet on your phone,

you can do that by writing it down on paper, writing down your backup that way. But of course, that is not fireproof or waterproof or you proof. You might throw out a piece of paper. You might want to consider backing up your seed phrase in solid steel with. the bill foddle over at privacyprose.io. It's a solid piece of steel with little tiles that you slide in to keep your backup seed safe from fire, water, and you because you're not likely to throw it a solid piece of steel instead of a piece of paper. So head over, check them out. And with that, let's dive into the show. So Bitcoin has been around for quite a long time, since 2009, actually,

and it has always, always remained at the top spot in all of the cryptocurrency sector. Everything else has failed to catch up and surpass Bitcoin. Now, why is this? A lot of people, a lot of detractors of Bitcoin will say it's too slow and too expensive and it's old technology and we need to move fast and break things and all of these other coins are improving. So why are they not gaining on Bitcoin? Bitcoin is nearly 70% of the entire cryptocurrency market at the time of recording this video.

And that alone is impressive, let alone the fact that new cryptocurrencies are being created every single day. And just listed here on coinmarketcap.com, there's well over 4,000 of them. And Bitcoin still takes 70% of all of that. And that has only grown over time as far as the entire cryptocurrency sphere. is concerned. It hasn't shrunk. So Bitcoin's staying that high in dominance is insane. So in order to understand why Bitcoin retains its dominant position and so decidedly, we need to kind of go back and look at the time when Bitcoin first came to market when it was first available and created in the inception of Bitcoin. What was happening in the world then and what issues were actually

being addressed. Well, Bitcoin was actually dropped and created, incepted, and brought to the people in January 3rd of 2009. Actually, I should clarify, the white paper was written and released in October of 2008, and then the network itself launched in January 3rd of 2009. And this was in the midst of the Great Recession or the financial crisis. So what was going on at this time? Well, without getting too deep into it, it effectively amounted to people like you and I investing their money and handing it over to trusted third parties, bankers, so on and so forth,

and trusting them to do the right thing and invest and make good decisions with their money. That did not happen. A lot of people lost out on their investments, lost their money, and it was felt around the world. a lot of people lost their jobs. It was crazy. Effectively, banks were super irresponsible with people's money, made bad decisions, and a lot of people were hurt by it.

Now, if you want a little bit more insight into exactly what happened, I highly recommend watching The Big Short. This movie is very informative. It helps you get a handle on actually what happened with the subprime mortgage crisis and the fallout from that. And it kind of follows a number of people that had the foresight to see it coming, and capitalize on it. Excellent. Highly recommend check it out. But the fallout from what was happening with the financial crisis led into a movement called Occupy Wall Street. People were rightfully

angry that one that they had invested their money to save for retirement and that bankers had then acted so irresponsibly that it was effectively gone. People were wiped out. But they were also very angry to the response from governments of what to do about this. And what I'm talking about is the bailouts. So the banks were able to borrow people's money and invest it, charge fees for doing so, but in making a ton of irresponsible decisions to make more money, they lost everyone's money, but in doing so, there was no consequences for the banks themselves. The central banks and the governments decided to print more money and inject it back into the banks because they were deemed too big to fail. And so the banks were able to buy back their own stocks,

buy other stocks, and pump up their own wealth, becoming even more wealthy, more rich, more well off, and have a bigger piece of the pie than they previously had. So while Mainstrip got wiped out, the banks got bailed out. And they were doing quite well after this. And this headline here in particular, Chancellor on Brink of Second bailout for the banks, interestingly enough, was coded into the first block mind on the Bitcoin ledger that records every transaction that has ever taken place. And that is hard-coded in there now. It is irreversible and it will remain on the Bitcoin ledger forever.

So you can kind of get some hints as to the reasoning and the motivations behind the creation of Bitcoin. Now, let's talk a little bit about what led to a system where this could even happen in the first place. And I'm talking about the financial crisis and people relying on others. Well, when you think about it, why do people invest? Why don't people just save their money? Why don't you go to your job, work, get your money, get your dollars, or whatever your

local currency is, and just save it. You shove it under a mattress, put it in a safe. Why can't you do that? Well, most of us know that we can't do that because our money is worth less over time because they print more and things become more expensive known as inflation. So our value, the fruits of our labor, the hours that you put into saving that money are whittled away over time if you don't put that money somewhere else. So because of the money, you are forced to effectively gamble or hand over money to investors or advisors to put your money somewhere where it will gain a return and you can outpace inflation and have money for when you decide to retire.

So the money drives the behavior of forcing individuals to speculate on companies and other items. Of course, this doesn't always work. And like in the financial crisis, some people had saved their entire lives for retirement. And as they were ready to retire, were effectively wiped out, super sad. Now, this is one of my favorite quotes from an awesome bitcoinser and podcaster named Marty Bent. He hosts Tales from the Crypt. And his quote is, fix the money, fix the world. It's really that simple.

And it is. because if you think about it, if you could just save your money and it would retain its value or perhaps even grow a little bit over time, then you could just do what you're good at. You could do your job. You could save your money and eventually that money would either retain or increase in value and you could simply just retire and live on the money that you had saved. Not so right now. So we did. We did have a sound money before. We had a money that didn't inflate. We had a money that retained its value over time, and it was gold.

We had a gold standard. But gold had some shortfalls, some inherent qualities about it that caused it not to be ideal and caused it to eventually fail as a global reserve currency. And a lot of it had to do with its physicality. Yes, gold was actually limited in its supply, so it was much easier to retain value. but because it was physical and because it was a little bit more difficult to divide, it was less divisible. You couldn't really easily pay with gold,

especially as it increased in value in relation to dollars and products and things that you would purchase. You would have been transacting with very tiny pieces of gold. And if you had a lot of gold, it was more difficult to store and secure. So that led to centralization. So people would deposit their Bitcoin into banks. Banks would issue notes. that represented the gold in the vaults, and people instead would trade the notes.

The notes were more divisible. You could say you owned a fraction of a gram or a fraction of an ounce of gold and trade those papers between each other, much more convenient, much more divisible. But that led to a few different things. One, easy confiscation. This here is the executive order,

6102, happened in 1933, and the United States outlawed owning gold, confiscated it all from everyone, and a year later actually devalued the gold. So they handed over about $20 per ounce to individuals for their gold. They confiscated it all. If it was in a vault, then it was already done and over with. If you had it in your home, they could do searches. They could look for it.

And if you were caught, look at the penalties here. $10,000 fine or 10 years imprisonment or both, if you violated this order. So, most people, they handed over their gold, or it was just readily confiscated in those vaults if it was already in centralized hands. At that point, they were given about $20 a pop per ounce that they held. A year later, the treasurer in their Federal Reserve

stated that gold was now worth $35 an ounce. If you think about it, what they actually did is they devalued the dollars that they just gave to the people in exchange for their gold. They made their money worth less. Fast forward to 1971, the world was on a gold standard effectively. The United States dollar was backed by gold and the United States dollar was the World Reserve currency.

And many countries held gold with the U.S. Well, as the U.S. was fighting the war in Vietnam, it became clear that, you know, something fishy is going on because they shouldn't have enough money to continue financing this war. And people started realizing that they were indeed creating more dollars than gold that they held in their vaults effectively. And so countries began trying to repatriate their gold to exchange the U.S. dollars that they had for gold. And what was the response? Well, the U.S. effectively reneged on its promise and it refused to give back the gold and said we're temporarily suspending convertibility. of dollars to gold. Well, that temporary measure has never, never been reversed and we are on a fiat money standard, meaning that it's not backed by anything. It is by decree. The government declares

this is the currency, this is what we use. And so with this, you had a few things that prevented a sound money from proliferating, and a lot of them had to do with the physicality or, you Yeah, the physicality of the actual asset itself in that it was difficult to store and secure and it was difficult to divide. It led to centralization and people holding it. You couldn't audit it. And by the time you started to try and audit it, well, it was too late and it had already been debased and inflated. And so this brings me to the questions that need to be addressed with Bitcoin to improve upon gold

and actually successfully create a sound money for the world. And so the questions here is, is it sovereign sound money? So a money that is sound that is finite, that is outside the control of any one state. So is there a capped supply? Well, let's take a look at Bitcoin. Bitcoin will only ever have 21 million units. Now, each one of those units are divisible, kind of like you have dollars and cents. dollars and pennies, uh, Bitcoin has dollar, has Bitcoin and sats. The difference is there's a lot of

sats or Satoshi's in a Bitcoin. There are 100 million Satoshes in one Bitcoin, but there's still a cap supply. That's the max there will ever be 21 million Bitcoin. Now, when you start looking at some of the other cryptocurrencies out there, let's take the number two coin. Now this you think number two, it must be equally scarce or or close to. Not so because Ethereum actually has no cap. There is actually no limit. Now initially when it was launched, there was an assumption that there would only ever be around 100 million Ethereum created,

while it's 114 million in circulation right now, and we have no idea how high that will go. So there's really no promises there. When it comes to something like XRP, this little bit different of a story, but right out the gate, a hundred billion, a hundred billion units were created, but they were all held by one company and they were sold gradually onto the market. There's only 45 million or 45 billion of those currently on the market.

The other 55 billion are still held by Ripple Labs and you have no idea how quickly that will be issued or dumped onto the market. So it's kind of a mixed bag. Some do have limited supplies, things like light coin, but you never know. So that's the number one question here. Now, is there a cap supply? Bitcoin, we know yes. But what about these other questions here? Is it censorship resistant?

Can you audit it? And will the rules change? So what I'm alluding to here, censorship resistant, is somebody going to be able to stop you from receiving or sending Bitcoin like they were able to? to do with gold? Can you audit it? If there was an inflation happening in the background, could you easily tell if that was happening, or would it be like gold where it's kind of obfuscated and you can't tell? And will the rules change? Like when you handed over your gold and somebody gave you $20, is somebody a year later going to say, actually, for the amount of gold you gave me,

it's actually worth about half. Nowadays, if you gave me $20, you'd only get half. You'd only get half an ounce of gold, is somebody going to be able to change the underlying rules of the system as you understand them now? And in order to tell those things, we need to dive a little bit deeper into a second line of questioning. Is it decentralized? Remember, the main problem with the gold standard is it that it inherently centralized into the hands of trusted third parties. So let's look at the decentralization around Bitcoin. Is there a foul? or a foundation? Can or do the rules change regularly? Can I audit and enforce those rules? And is it easily attacked or co-opted so that they can be changed or reversed in some way, shape, or form?

Well, let's look at the first one. Is there a founder or foundation? Let's jump over here. So Bitcoin, of course, was created by an anonymous inventor, pseudonymously called Satoshi Nakamoto. Now, he was around for the first two years of Bitcoin. He was around for two of the 12 years it has existed. He disappeared in December of 2010. There's been no communication since. And for the past decade, Bitcoin as a network has been able to grow and evolve as kind of like a hive mind mentality, people contribute. and there's a bit of a meritocracy going there

where only the best ideas get implemented and there's a high level of scrutiny over everything. When you compare this to something that has a centralized figurehead or a foundation, oftentimes those central points of power, even if they don't have direct control, they get a large say. And it becomes kind of like they're elevated to this deity-like position

where if they say, jump, everybody holding and working on the protocol says how high. And a good example of this, yet again, is Ethereum. You have Vitalik Buterin, the creator. You have the Ethereum Foundation. And more or less, what they say is what's going to go forward. What they say is what's going to be implemented into the protocol. You have the same thing with XRP, even more so because it's basically created by Ripple Labs and the company just does whatever they see fit. That's just the way it goes. light coin maybe a little less so but it still has the founder charlie lee right there front and center and you know if he has a certain opinion about how things are going um you can be pretty damn sure that

it's going to have an impact on the way that the protocol moves forward over time and those centralized parties are attack factors people can coerce them can make them do certain things or make them try to push their influence on the people working on the protocol all in all not a great thing to have. Now, can and do the rules change regularly? Because if the underlying rules governing the network change regularly, then it may become trivial to change something very important like the capped number of coins, the supply. And so again, when we look here, Ethereum, perfect, perfect example, they go through what's known as regular hard forks. These are quote unquote upgrades or change to the protocol that are not backwards compatible.

This means that in order to still be using Ethereum, everybody running the protocol, running the software, has to upgrade or be left behind. Contrast this with Bitcoin. It has a very, very conservative approach. In fact, you'd be hard pressed to get changes through at all that were even somewhat controversial. And you definitely, at this point,

it's very unlikely we will ever ever see a non-compatible hard fork, a non-backwards compatible hard fork, ever rolled out because the amount of corraling and control that would be necessary to get everybody to upgrade at the same time is just not there. It's like, it's like saying, hey, I built an upgrade of the internet, but it's not compatible with the old internet. You can't find any of the internet. You can't find any of the old websites. You can't contact anybody via the old internet with the new internet, but I've improved it a little bit and I need you to jump over to this new internet. Try getting everybody to upgrade to internet 2.0. Odds are it's never going to happen. And so if you have a network that

regularly does these non-backwards compatible hard forks and changes to the underlying promises and rules of the system, can you be sure that any of those promises will be held sacred. I would argue no. Now, number three here, can I audit and enforce the rules? Now, this is known as running a node. Let me bring this up here. I have done a playlist of how to run a Bitcoin node. A Bitcoin node is effectively running a copy of every transaction that has ever happened, thus being able to see the total supply of coins, it also has you running a copy of all of the rules that govern the network. And so what this does is nobody can force you to change the software you are running.

So if somebody tries to break those rules or change those rules, if you're running a node, you will ignore what they are doing and they will have no effect on the coin, Bitcoin that you are using. And so running a node is, it's kind of like it's not, it goes beyond democracy. So it's not like you're voting for what the best coin is. It's you're saying, this is the coin and the rules I want to use. And if you don't like it, tough luck, that's what I'm doing. It would be like if you voted in an election and regardless of who won or lost, you got to go by the rules of the party that you voted for. So, is it? easy, the question that I'm addressing here, can I audit and enforce the rules by running a node?

Is that an easy action for me to do? Now, Bitcoin, the entire protocol is based on making this easy and accessible for anybody who chooses to do it. And again, I've done tutorials. I'll link to the playlist down below, but it's easy to set up and run a node. It takes a bit of time for it to sync up with the network initially, but you can do it very cheaply with little or minimal hardware at all. You could probably run it on your laptop right now just by downloading a program and running a whole Bitcoin node yourself. And so with this, you can then enforce the rules and audit it yourself to ensure the number of Bitcoin remain

within the parameter stated that there will only ever be 21 million. You can check if more has been issued than should be issued. And we saw an example of this. This past September, I partook, we saw a global synchronized audit of the Bitcoin blockchain. And anybody who wanted to, who was running a node, could have at that moment in time, typed in a simple command and gotten back an answer of how many Bitcoin existed and were circulating at that current time. We did it. Everybody was on Twitter and tweeting their answer that they got. And across the board, it was unanimous. We all got the same number. People tried to do this. on Ethereum. And unfortunately, it was not so simple. Now, Ethereum has gone the route of allowing

a ton of information to be put onto the Ethereum blockchain, which means it can be prohibitively expensive to run a node, and you have to have a very, very good internet connection, a lot of great hardware in order to do this and be able to keep up with the network and get the right answers. And when people started asking around saying, hey, can you actually audit this thing yourself? The answers that came back were all different. Everybody was getting different answers because the software was not syncing up well, was not actually able to keep up with the network itself. And to this date, I haven't really seen a concise audit of the Ethereum blockchain. And that over time will only get more difficult. And so with Bitcoin, the idea is,

let's try and limit the amount of data kept on the Bitcoin blockchain so that it remains accessible and decentralized for those audits and for people that want to enforce the rules themselves. Other coins have taken totally different approaches and even if you can easily run a node right now on some of them, if it comes to a point where any of those networks get meaningful usage and more transactions, then that function can effectively become, again, and prohibitively expensive and onerous for people to do. And that's why I like the approach of Bitcoin itself. Now, let's keep going here.

The other thing I wanted to touch on is let's say you did have a coin that ticked all the boxes so far that I've mentioned. It's decentralized. There's a good cap on the number of coins. You can run a note. Everything seems all good. There's not going to be too much data on the blockchain in the future. Is it easily attacked or co-opted?

Because even if you have all of those things, if your network is not robust and secure enough, transactions can still be reversed and it can still be co-opted. And so let's take a look at a couple examples of this. Now, the first one is when some people tried to do this to Bitcoin in 2017. It was known as Segwit 2X. 50 of the largest Bitcoin companies in existence, which was most of the industry at that point, and 80% of the miners, the people that actually do secure the network,

attempted to push through a change that was not backwards compatible, that would adjust the amount of data that would go through on the blockchain, which we've discussed that could, if that was a precedent set, it could become onerous for people to run their own notes. And they also, in the midst of this change, we're trying to push through a power play so that they could install their own developers that would allow them to more easily make changes to the Bitcoin Protocol in the future. Huge red flag. Well, what happened was astounding and totally unprecedented. Individuals running their own nodes opted out. They looked at these changes

and said, listen, this is no good for the long term. And they stood up in the face of basically the entire industry and said, we're not going to run this software. We're just not. And furthermore, there were some futures markets where people could speculate on the price of what would result from these two differing networks. And the one that was going to be the change with all of these companies and all these miners ended up having a projected value of about a quarter of a Bitcoin. So investors that were holding onto that coin would have effectively had they converted over lost 75% of, of their value at that point. And so, last minute, basically the entire industry backed down and knelt to the will of

individuals standing up for what they believed in for Bitcoin, which is amazing. Now, this is important to note that the miners are the ones, miners are people that volunteer their computing power to check, or rather to put together transatlantic. and present them to people who run nodes and say, hey, I put together these transactions and I'm securing the network and I believe all of these sit within the rules and take a look and confirm this. And miners who do that, they get rewarded with transaction fees on the Bitcoin network and newly created Bitcoin, although that dwindles over time to keep within the limit. the miners protect the network and prevent it from being co-opted and prevent people from mucking around and trying to reverse transactions.

And with a large decentralized network, that becomes prohibitively expensive to try and block transactions, to try and censor them, to try and reverse them, to do anything that would undo a transaction that somebody wanted to have happen. Now, if you notice, this is a chart of the Bitcoin hash rate, the measure of the computing power securing the network, and it has been steadily going up. In fact, you can't even see it in the early years because it has grown exponentially. It is massive. The amount of competing power is astounding here. If you notice down below, there is actually another hash rate here. I believe it's Bitcoin Cash. And the rest are negligible if you bring in things like Ethereum.

and light coin and Ethereum Classic, some of these other coins, their hash rates, they don't even measure. They don't even register on this chart. So they're not even close to in the same realm. And what can happen if you don't have a robust network with the largest amount of computational power backing it up? Well, you can get a 51% attack.

And this means that somebody that is able to gain 51% of the computing power securing the network can start to tinker around a little bit. And if they get more than 51%, then they can start to reverse transactions or double spend and strategically try to steal money. And this has happened many times in the past. Coins like Verge and Ethereum Classic and Bitcoin Gold and Feathercoin and Vertcoin have all been 51% attacked. And a lot of these attacks typically look like somebody gains a large percentage of the mining power

on the network, and they'll send a large transaction of whatever the coin is to an exchange. They'll trade it for something that is less reversible or irreversible like Bitcoin and then take that money off the exchange. So they've deposited, say, vertcoin, they traded it for Bitcoin and withdrew it. They can then execute a 51% attack on Vertcoin and make it as if they had never sent that coin to the exchange. So the exchange is potentially out millions of dollars. And that's what we saw over and over again. It's like they never received the money at all, but they've given away the Bitcoin at that point. So what do you do? You're kind of screwed. There's not a lot you can do if you're dealing with a lot of these coins. And this is a big problem that presents itself with

insecure coins that don't have the hash rate to support the amount. This is a website called crypto51.app. And it actually shows. shows how much mining power you could rent of a total network. Some of these are well over 100%, thousands, so you could rent multiple times the amount of computing power securing the network. And it says how much it would cost you. This coin here, it would cost you $25 an hour to fully co-opped the network, and that is all rentable computing power.

So you could effectively reverse and do whatever the hell you want to the chain. And you can see a lot of these coins have a basically could be attacked for next to nothing. So yes, it is a huge red flag. It's very scary and it is very possible and it does happen. And so I wanted to address a couple other things here just to round it out. Now, again, I go back to the idea of what if you could perfectly replicate everything with Bitcoin that we've discussed so far. What if you could copy it? Well, there's a great article by Parker Lewis on the Unchain Capital blog called Bitcoin Can't Be Copied. And I want to refer to something

called the intransigent minority or the minority rule. And this refers to some work by an author named Nassim Taleb. I'm just going to read a little bit from the end of this article. The minority rule. Nassim Taleb writes about how a very small intransigent minority can force its preference on the majority, referring to it as the minority rule and explaining why the most intolerant wins. Bitcoin, a monetary system and monetary systems, are a perfect example of this phenomenon. If a very small minority converges on the belief that Bitcoin has superior monetary properties and will not accept your form of digital or traditional currency as money, while less convicted market participants accept both Bitcoin and other currencies,

the intolerant minority wins. This is exactly what is happening in the global competition for digital currency supremacy. A small minority of market participants has determined that only Bitcoin is viable, rejecting the monetary properties of all other digital currencies while the majority is willing to accept Bitcoin along with the field. Because of intransigence, the minority is slowly forcing its preference on the majority. In the world of digital currencies, diversifying by picking the field is the equivalent of letting the crowd or the intolerant minority,

choose what your future money will be while resigning yourself to only a fraction, of what you otherwise would have saved. Evaluate the trade-offs and consider the minority rule before trading your hardened value for a flyer. Money doesn't grow on trees. And so, again, what Parker is getting at here is if you look at exchanges, digital currency exchanges, have you seen many that don't accept Bitcoin? Odzo, you probably haven't seen any. Have you seen many that won't accept certain altcoins? What about merchants that do actually accept digital currency as payment?

Have you seen any that refuse to accept Bitcoin? Have you seen any that refuse to accept anything but Bitcoin? Probably. And so what it gets at is as this network grows, you have these network effects where everybody will accept one thing and some people will accept other things. And so when you're thinking about what you want to hold on to and what's going to be the most saleable good, what is going to be the most useful across the board where you know you're not going to have as much of an issue, which one are you going to want to get paid in?

Are you going to take the one that is accepted by a small percentage of people? Or are you going to take the one that's basically across the board? What are you going to put your savings into? What are you going to hold on to for the long term? odds are you'll pick the one that is prolific across the entire industry. Now, what I wanted to touch on here is a lot of people, to round this out, a lot of people refer to Bitcoin as being too slow and too expensive. And on the main chain, using regular Bitcoin transactions,

is it more expensive and is it slower than some other cryptocurrencies? Yeah, of course. that is the cost of keeping it accessible to be able to audit and run the entire chain yourself to ensure that no centralization occurs. However, you can build networks on top of Bitcoin that allow for instant and nearly free transactions. And one such network is the Lightning Network, which anybody can use right now. I have done videos on how to use the Lightning Network in a non-custodial way,

so you're still holding your Bitcoin, but you're not. you're taking advantage of those quick, cheap transactions. So if you're curious about that and you still have that use case of needing those quick and cheap transactions, I highly recommend you check out my Lightning Network playlist because if you need that functionality, it is there for you if you require it. And then finally, I wanted to let you guys know about another video about kind of the consequences of diversifying into altcoins. So we've kind of established why Bitcoin tends to stay on top and what that value is.

And right now it's showing that a lot of people are valuing Bitcoin as a way to store wealth for the future. They're trying to get out of the rat race of having to invest their money for retirement and holding onto a sound money instead. We're trying to recreate. a new renaissance towards a new sound money age like we had with the gold standard, but this time without the flaws of the gold standard. Some people dive into the realm of still speculating on altcoins.

And I made a video and wrote a blog about this, about over the long term, what are the consequences of those network effects of Bitcoin and the consequences of holding onto some of these altcoins? And I actually break it down with spreadsheets and real numbers based on. on had you got in when there was some excitement in 2017, not at the top, but rather kind of the middle of the year when things are, you know, when most people would have been noticing things when your average individual was starting to notice Bitcoin and some of the other alternatives out there and had that same thought process of, well, isn't there going to be

something better that replaces it? And that's what we've tried to establish today. Well, I encourage you to check out this video and see monetarily the consequences of what would have happened to you, had you diversified as our good friend at CNBC, Brian Kelly, encouraged in his segment, his now famous or infamous segment. Highly recommend you check that out. So guys, in closing, I guess what I'm saying here is when people lean towards Bitcoin only, there's a misconception that it is close-mindedness, that they just don't want to look at anything new. But in my experience, it's actually been a carefully thought-out position. I know why it was created.

I know the problems that it was solving. I know what's required to continue solving those problems. And I know that even the minor problems like quick and cheap transactions can be addressed without sacrificing those other things with enough patience. And so it's not that I refuse to acknowledge altcoins or that people refuse to acknowledge or use altcoins. It's that they are looking for a specific set of boxes to be ticked and inevitably the only one that ticks all of them is Bitcoin.

Thank you guys so much for watching and or listening. If you're here on YouTube, please do hit like, subscribe. and share all of those things really, really do help in getting content like this in front of more eyeballs. Now, if you want to help out the show in another way, you can hit up the sponsors I previously mentioned down below that was Ledin, Cobo, Bit Refill, and Privacy Pros, aka the Bill Fottle. And if you really liked what you saw, you can test out what I was just talking about, the Lightning Network.

You can drop me a Lightning Network tip at my Tipin.me page that is t-I-P-P-I-N dot me slash at BTC Sessions. With that, I am out. Have yourselves a wonderful day, wonderful evening, wherever you may be, and I will see you next time for your daily session.