Bitcoin's Last At Bat

"And Sugar, we're going down swinging"

- Fall Out Boy

It was Ted Williams goal in life to "walk down the street [and have] folks say 'there goes the greatest hitter who ever lived.'" Hitting his 521st home run in his very last at bat in his 21 year career, Ted rounded the bases and waved the crowd off. Leaving no doubt that, in his time, he was one of the greatest hitters who ever lived.

I can already hear the Boston accent "Are you seriously gonna fahkin relate Ted Williams to bitcoin?"

Yeah, I am.  

Bitcoin has changed the way the game is played. We're not bound to the whims of the banks anymore. More importantly, we're not bound to money that's not actually ours anymore. Sure, when you look at your bank account and see the number it's reassuring - but you don't own it. It's just a number on a scoreboard that your bank shows you so you don't run to the bank and take all your cash out at once.

We live on a system with near infinite leverage, debt, and credit. The wealthiest among us never have to use their own money to buy anything, while the poorest get hit with $35 fees for withdrawing $2 more than they have in their bank. All while the bank buys up Trillions (With a T) of dollars in mortgages, securities, treasuries, and assets. Making hundreds of Billions (with a B) of dollars in interest.

in 2009, immediately after the banks had effectively over leveraged our hard earned money on garbage mortgage securities and nuked the entire world economy, Bitcoin struck back. Reaching the furthest corners of the internet first, and slowly over the majority of a decade working it's way to becoming a household name.

If Bitcoin is a household name, why did you title this "Bitcoin's Last At Bat?"

To explain, I need you to pull out your LG enV2 (VX9100) out flip it open and navigate to "website"

Oh sorry, you don't have an enV2 phone anymore? That's because while Bitcoin was launched on January 3rd, 2009. This phone was released in May, 2009.

Even though the picture above makes me sad because I got too high with my friends when I was 17 and jumped in my buddy's pool with this phone in my pocket and ruined it; I feel my point is pretty clear here.

Bitcoin Dominance

To understand why I believe Bitcoin is a fading technology, you have to first understand the concept of Bitcoin Dominance. Binance Academy has a great explanation of it here. Essentially, of all the different tokens and coins that have been released in the last 14 years, Bitcoin has always had a massive share of the total market cap. In simplest terms, think of bitcoin dominance as market share of all cryptocurrencies.

Why is that important? Here's a chart of Bitcoin dominance starting from 2013.

As the technology gets faster, cheaper, and continues to transform into a true global economy Bitcoin continues to lose it's share of the market. Bitcoiners want you to believe that bitcoin is the 21st century's equivalent to digital gold, and you need to stake your claim on as many Sats (0.00000001 bitcoin) as possible.

As you can see from the above, Bitcoin is losing. Slowly, but surely.

Before diving into why let's dive into what makes a blockchain valuable.

Decentralization

Think of decentralization as a big excel spreadsheet with a ton of editors and every time the excel spreadsheet is added to, there is a new version of it saved forever. The more people who have access to the spreadsheet to double-check it, the less likely it is for someone to cheat the systems in place. In the case of Bitcoin, there are about 12,000 of these "double-checkers" also called validators. This makes Bitcoin, by far, the most decentralized blockchain.

Scalability

Referring to how many transactions per second a blockchain can handle (TPS) Bitcoin sits around 7. For reference, Ethereum sits at about 16, and Blockchains like Solana, Polygon, and Cosmos sit in the thousands. This is Bitcoin's biggest weakness right now. If we, as a collective, are going to think of Bitcoin as the "new money" there's no way the average person is going to wait 15-30 minutes for their transaction to go through.

In fairness, the Lightning Network built on top of bitcoin is capable of 1,000,000 TPS and would theoretically make bitcoin the fastest transaction processing network in the world, if it catches on.

Security

To secure a blockchain you need to have a mechanism to say "This specific transaction is true and valid" AND "The state of the blockchain is correct" I won't dive too deep into it because, if I haven't lost you already, I'll certainly lose you here.

The long and the short of it is that these mechanisms can include highly complex math problems that supercomputers solve that process & validate the state of the blockchain (also called Proof of Work) or creating your own validator by effectively locking up a large amount of cryptocurrency. (Proof of Stake)

There are more mechanisms to secure a blockchain with more innovative ones still being created, however, these are the two that are talked about the most.

The Blockchain Trilemma

Of the 3 components of a blockchain above, usually sacrifices need to be made from one to benefit the other two. For example, Solana can process 4000 TPS making it one of the most scalable blockchains, but, to do that they sacrificed decentralization. By largely centralizing the blockchain in the first couple of years, Solana was able to focus on their scalability and security.

As the technology gets better and better, we're seeing iterations of blockchains that are doing their best to account for this problem.

Okay, deep breath... and... exhale. Let's get back to game theory.  

The bear case for Bitcoin

To maintain dominance in the market, it's ultimately going to come down to use cases for Bitcoin. "What the hell do I even do with it" (emulating my dad's voice here)

As of right now, without looking at price, the entire cryptocurrency market is booming off of "unlocking opportunity." Whether its use case is primarily buying and selling NFTs, investing in real-world assets (RWAs), or trading options and using DeFi products, every blockchain is racing to empower builders to create enticing user-facing products.

Every blockchain that is, besides Bitcoin.

In fact, outside of the occasional cryptic Dan Held tweet there's not much overtly happening with Bitcoin. The government is still stonewalling Bitcoin from effectively being able to be traded on Wall Street, J.P Morgan flip flops on crypto every 3 months, and leaders of major institutions still think Bitcoin is used for buying drugs on the dark web.

Bitcoin is losing the battle of optics.

A week ago, I tapped the best writer I know to author an article from an outsider's perspective. Not even a day into writing this article, her Instagram with over 1k followers got hacked by a bitcoin mining scam.

You know the one that says that they made $25,000 in 3 days off a $500 investment in Bitcoin Mining. I only follow 600 people on Instagram - most don't even use their account anymore and still, I'm seeing 4-5 accounts get hacked by this same scam every month.  

Yet, I haven't seen one tweet from the bitcoin community trying to figure out how to stop this from happening.

herein lies the problem. Bitcoiners have become completely detached from outside perspectives.

While they're focused on trashing "normies" "stacking sats" and ripping on "shitcoins." (anything that's not bitcoin) The world is watching their friends, family, and people they inexplicably still follow from High School get their social media accounts stolen by bitcoin mining scammers. At the same time, the price dropped from $69k to $17k over 12 months.

How are people supposed to take it seriously?

This isn't a battle of insiders vs. outsiders. This is a battle between centralized banking and a global decentralized future. Yet, we can't even come together as a community. Much less, communicate effectively with those who are interested in what's happening in the space.

The Bull Case for Bitcoin

There is a path to Valhalla here for Bitcoin but there is a lot that needs to happen before the next hype cycle. The good (and bad) news is, if you've been paying attention to everything that's happening in the world - we might have a bit of time.

Bitcoin positions itself as the "adults in the room"

Bitcoiners become the thought leaders in the space. That means a full embrace of other blockchains and technologies. Encouraging self-custody, measured and responsible trading, and pushing for institutional adoption. (Yes, this means encouraging common-sense regulation)

As Bitcoiners continue to try to convince people that other blockchains are "shit" their antiquated technology continues to be surpassed. Some of the smartest people in the world are building products that solve problems that "new money" doesn't fix. Bitcoiners need to work with other blockchains, build partnerships, and open new communication channels, not silo themselves from an ecosystem of dreamers.

Bitcoiners re-focus on being the first touch point into cryptocurrency

Meme-coins like DOGE, SHIB, and BONK are fun and bring a ton of new people into the space - but the truth is they're bad investments long term. Does Bitcoin have a 5x opportunity? Sure. Is that enough risk vs. reward upside for someone who believes cryptocurrency is a scam to change their mind? I don't think so.

The way to win here is to completely rethink the way you talk to people outside of the space. No, they're not "normies" they're not "lost causes"

We can't be simultaneously early and consider people who haven't been "orange-pilled" a "lost cause"

We need educators, influencers, ambassadors, and diplomats. Not cryptic tweets and adversity.

Yes, Bitcoin staying "king" is good for the ecosystem as a whole

The entire community should be rallying behind Bitcoin as the market falls (and rises for that matter) Cryptocurrency has been labeled, some would argue correctly, as a degenerate casino for nerd-boys. If there's one thing Bitcoin itself has successfully kept itself from in 2022 is a perception of a gamble.

As a standard practice, we should all think of Bitcoin as our savings account and the rest of our crypto as our checking account/play money. We should all be holding bitcoin and not touching it. Like it or not, Bitcoin is our trojan horse, convincing the banks to adopt cryptocurrency, only to bring it to mainstream adoption and have us realize we never need the banks again if we don't want them.  

"This is how we win"

The last at-bat

I can't help but feel like this is Bitcoin's last super cycle to secure its spot on the throne. Don't get me wrong, Bitcoin will be around as long as cryptocurrency is around. That being said to what extent it's influential (or people care) is really up for debate here.

We are in a position where we could realistically see Bitcoin's technology surpassed and more heavily adopted in the next hype cycle. Something new comes along, just like the iPhone vs. the enV2 which renders it nothing but an artifact. A cool piece of web3 history. The Model T that kicked off the whole industry.

Technology may still render Bitcoin obsolete someday but at least in its last at-bat it can swing hard, one last push towards a decentralized world that unlocks equity and access for all. A future where we're all on an equal footing.

That's the kind of home run that would cement Bitcoin as the greatest invention of our generation.

Tyler has spent his career in sales and marketing. After building out the Cryptocurrency/NFT vertical for Twitter and spending a year building out Brand Partnerships with Blockworks, Tyler launched Influx. By focusing on B2B sales enablement and storytelling marketing in the Web3 space, Tyler believes he can bridge the gap between Web2 and Web3.

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