The Biggest Crypto Gains Won’t Come from Bitcoin (Anymore)
Bitcoin “maximalists,” or “maxis” are a small but extremely vocal subset of crypto fans (at this point, I can’t really call them “investors”) who think that Bitcoin is the only crypto worth owning. Some of them think Bitcoin is the only thing worth owning, period.
These folks make a seductive argument, particularly for crypto newcomers who might be daunted by the sheer diversity of cryptocurrencies: “A single Bitcoin is going to be worth X million dollars, and it’s going to replace pretty much everything, and it’ll usher in a new Golden Age of absolute freedom and universal prosperity.”
Sounds pretty sweet! Too bad it’s a load of you-know-what.
Sure, Bitcoin is important. It’s always going to be here, and it’s going to be the gateway to the asset class for most people. It’s foundational.
But you know what you don’t see much of these days? People living on bare concrete foundations instead of houses. Housing may be in short supply, but most people would agree that making do with just a foundation is unacceptable.
It’s the same way with crypto. If crypto was just Bitcoin, our 5Ts criteria and investing strategy wouldn’t work at all, because Bitcoin alone has no innovative leading edge. Even if it were just Bitcoin and Ethereum, that still wouldn’t be enough. We need a dynamic and competitive marketplace with powerful, promising new projects.
Bitcoin “maxis” are treating an entire asset class like it’s an overpriced lifestyle brand. The sole advantage in only owning Bitcoin is… it looks better on a t-shirt. It takes less time to say “hold Bitcoin forever” than it takes to say “Hold a balanced portfolio of cryptocurrencies with strong fundamental use cases, created and executed by good developers who use and understand innovative technologies, and hold them until you’ve recorded very large gains, often in the ballpark of 10x, but varying depending on the specifics.”
That’s good advice, but you can see it sure doesn’t fit on a t-shirt. I guess if I had to put one of my crypto philosophies on a t-shirt, it would go something like this…
Innovation Is Everything – Adapt or Die
What the maxis don’t get is, unlike Bitcoin, the cryptos with the biggest possible gains potential are constantly innovating, like so.
For instance, one of my favorite projects recently rolled out an upgrade to improve its efficiency. It’s an important Ethereum Layer-2 token – a crypto space I think is particularly promising and rife with potential.
Two main changes were made.
First, the system was altered to prevent “gas” prices from getting too big too fast, which is easier on users, and much better in the long run. If using your crypto is too expensive, no one will want to use it anymore. Second, validation blocks come in smaller sets for a smoother and more balanced validation process.
These are really important steps toward that all-important scalability. These changes aren’t going to turn the world upside down or cause an instant 10X price explosion, but they’re signs of a healthy crypto innovating to keep pace with the times. The modification was formally announced by the development team and then released on time just a few days later.
At the end of the day, these enhancements will mean the token is more affordable to use and much faster for users. That means a stronger use case, and that usually means bigger profit potential.
That’s worth comparing to Ethereum, which – as good as it is – took years of preparation and months of delays to finally implement the “merge” that transitioned it over to proof-of-stake (PoS). And it’s worth comparing to Bitcoin, too, which didn’t even do as much as Ethereum did!
The biggest crypto profits will go to the people who own the most innovative tokens; new technological breakthroughs and implementations are the force that will actually make us money in crypto.