There are many arguments why Bitcoin will retain its value and why it will also maintain its leading position among cryptocurrencies. It is often talked about network security, at other times high participation, the number of transactions, or the technology itself. Today I would allow an argument that is more important in my eyes and probably more important than most.
Bitcoin started it
Bitcoin undoubtedly began the emergence of the entire technology industry. The first, functional version of digital money that has no center. The groundbreaking invention soon gained much attention. Soon after, the first forks and copies came. Of these, virtually only Litecoin and Dogecoin remained today. The others disappeared.
However, new players began to arrive. The most important is Ethereum, which brought advanced smart contracts and enabled massive development of decentralized applications. Unlike the initial BTC, the Ethereum holds its value because it has brought something new and it can be argued that the ETH network is more decentralized, used and more functional than the original cryptocurrency king – Bitcoin.
However, the BTC still categorically exceeds the ETH price. Many would argue that ETH is simply not as safe, but it is safe for ordinary users, and it will be difficult for them to understand why BTC safety is higher, or why it is needed at all if ETH has never been demonstrably attacked.
Trust, narratives and society
This brings us to a critical argument for Bitcoin. Here is why at least in the next bull run Bitcoin will still be king. Bitcoin is well known in society. It’s similar to gold. Gold is not so high because it would have to be used, for example, in industry. Gold has a consensus that it has value. People believe it has value because others believe it has value. Social consensus.
The comparison with gold is generally unfortunate also because the consensus on the value of gold has been built for thousands of years. We’ve known Bitcoin just for 11 years. However, there is a similar logic. It is the social fame of the BTC that will be critical to maintaining value, especially if it turns out that PoS coins are unattackable in the long run.
Bitcoin has a huge reputation. Everyone knows him. Everyone knows what it is. And this is the greatest strength of Bitcoin. Few really understand why it is worth, but it doesn’t matter.
How does it work?
One of the pillars of the company is the replication of narratives. This creates a kind of link between individuals. Such a narrative can be, for example, religion. We all share stories that affect us and the longer we tell them, the deeper they integrate into society.
Bitcoin is similar. People tell a story about money that has no borders. About the store of values that cannot fail. About decentralization and how Bitcoin will change the world. And that is also possible, but for the time being, these are often only stories. Decentralization at Bitcoin is in rapid decline and value storage can hardly be an entirely new kind of technology that has not even gone through a single crisis.
However, these stories have much more weight and their replication is on the rise with the number of people telling them. And lately, once again we can see a rise in interest in BTC in the media world, which is the key to the spread of narratives. If there are enough people on TV that say Bitcoin is worth it, it will be worth it, and you can’t stop it, so soon more and more will come to tell a similar story.
Bitcoin is a fascinating technology that has immense possibilities. This is illustrated by the emerging second and third generation blockchains. Will Bitcoin retain its value? No one can know that. We are in an unprecedented situation. However, it is likely that he will remain the cryptocurrency king at least in the coming years.