Considering all of the different cryptocurrencies on the market today, it’s worth asking ourselves what a cryptocurrency is actually supposed to be, and whether these new products actually serve these roles. Is Bitcoin the only real cryptocurrency?
After Bitcoin skyrocketed, coders around the world rushed to create their own ‘cryptocurrencies’ that would revolutionize the world. But how revolutionary are these new ‘cryptocurrencies’ really?
They say that Bitcoin was invented by someone using the alias ‘Satoshi Nakamoto’, but nobody knows whether that is his real name or not. The identity of Bitcoins creator remains a secret, and this speaks volumes about the value of Bitcoin compared to other cryptocurrencies.
Centralization
When Vitalik Buterin invented Ethereum, it sounded like a great idea. People could earn cryptocurrencies thru decentralized apps and quit their jobs, right? Wrong. It’s been about 10 years since Ethereums inception, and most people are still working jobs like they were before Ethereum was invented. The truth is that there is no value in a ‘cryptocurrency’ if someone we know can create it from thin air. Value comes from supply & demand.
In addition to the fact that we know who created Ethereum, we also know he can essentially print more Ethereum whenever he wants. This makes it very unlikely for Ethereum to revolutionize the financial system, as Vitalik Buterin is essentially no different than a central bank. Bitcoin does not operate this way. There is a limited supply of Bitcoin, and its structure is so secure that nobody knows who created it.
Network
Another very important difference between Bitcoin & Ethereum is the network. Bitcoin runs on a peer-to-peer (P2P) network with no centralized servers, whereas Ethereum almost totally runs on Amazon Web Servers. What this means is that if the government wanted to stop any Ethereum transaction, all they need to do is call Amazon. Recently the chair of the US Securities & Exchange commission stated that all Ethereum transactions fall under US jurisdiction. This should scare Ethereum users, as the SEC knows it has a grip on Ethereum. Ethereum is proving to be deeply centralized.
While it may seem like this article is comparing Bitcoin & Ethereum, we are really comparing Bitcoin with all the other ‘coins’. All the other altcoins use the same basic framework as Ethereum; they have a founder who is esentially a central banker, and a network that is not completely decentralized. These ‘coins’ are all worthless, since they can be subjected to inflation by the founder or totally cutoff by authorities.
Some people might point out that other projects have worked around some of these issues. We haven’t seen one new cryptocurrency that has an anonymous founder, or one that runs strictly P2P. Until then, Bitcoin is the only real ‘cryptocurrency’. Stay away from altcoins. Cancel your central bank.
Bitcoin-only software wallet: https://electrum.org/
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