The rise of cryptocurrencies has been exponential, and there are new projects launching with their unique tokens every day. However, not all of these tokens are secure and adhere to the rule of cryptocurrencies. Currently, there are over 20,000 crypto tokens in the market, with several of them dead or scams. It is important to understand the difference between crypto tokens that follow the core concept of cryptocurrencies and those which don’t.
Today, we will be talking about how Bitcoin is different from other cryptocurrencies and still maintains the gold standards of the original idea behind the cryptocurrency ecosystem.
Bitcoin is leaderless
The entire concept of cryptocurrencies was designed on the concept of Bitcoin being decentralized. Being decentralized refers to the fact that it does not have any leaders to decide on the future of the currency or manipulate it according to their agendas. This leaderless quality is what separates BTC from fiat currencies and is one of the major attractions.
However, some cryptocurrencies, which claim to be decentralized, are centralized. Their token issuance is decided by a group of people which makes the token susceptible to greed and coercion. Moreover, unlike BTC, the issuance of these tokens is not necessarily based on a fixed schedule.
Bitcoin’s issuance schedule cannot be modified to personal greed. It is a system of rules and is not governed by rulers.
Bitcoin is decentralized
Decentralization is one of the core pillars supporting the entire crypto industry. Not being controlled by any centralized institution is one of the USPs of cryptocurrencies against fiat currencies and centralized financial institutions.
Moreover, being decentralized helps cryptocurrencies in various ways. Not being controlled by any authority keeps Bitcoin secured against attacks. According to some people, decentralization is the ability to stay active even if any authority tries to shut it down.
However, some blockchain networks are not decentralized as they can shut down or are affected deeply by the actions of third parties.
Bitcoin is censorship-resistant
Another important feature of BTC is freedom of speech. According to the Supreme Court in Citizens United, money is speech. Considering that money is speech under the law, it should not be stopped or frozen for any reason, and this is only possible if it’s decentralized. Being censorship-resistant and decentralized is mutually exclusive as one cannot exist without the other.
However, as not all cryptocurrencies are decentralized, they are not censorship-resistant either. Unlike Bitcoin, several major cryptocurrencies, including Ethereum, underwent exploits in their DAOs, resulting in stolen funds. This Ethereum hack also led to the birth of a hard-fork Ethereum Classic. As a result, Ethereum changed the code to pretend the hack never happened, raising questions if it is truly censorship-resistant.
Bitcoin was launched fairly
When BTC was officially launched in January 2009, Satoshi Nakamoto announced the launch on a public forum for everyone to see it. It was available for anyone to earn by using their power to mine the token. However, now a crypto launch is paired with whitelisting and crowdfunding processes.
Even the most popular cryptocurrencies have some tokens reserved for their team members and other processes, which might suggest it is important for sustainability. However, it does not change the fact that BTC is the only cryptocurrency with a truly fair launch.
Bitcoin is scarce
Bitcoin, unlike some assets, can be easily audited by users running the full node. By using a single command, the node can know the exact amount of BTC in circulation at present and other information such as block height, estimated size of the network, etc. However, this is not true with several cryptocurrencies as well.
Moreover, BTC has a hard cap of 21 million, meaning there will only be a particular amount of Bitcoin ever. This increases the utility of Bitcoin as it is deflationary in nature. However, certain cryptocurrencies do not have any fixed circulating supply, which gives the project developers ability to control the supply and demand of the tokens.
Apart from these advantages, there are certain myths assigned to Bitcoin that are untrue. Here are some of these myths that suggest it is not fair or the golden standard of cryptocurrencies.
- Bitcoin is like fiat currencies which is untrue, as discussed above.
- Bitcoin does not solve any problem that fiat or gold doesn’t solve.
- Miners can change Bitcoin’s properties which is also false as all transactions are irreversible and require an appropriate number of confirmations.
- As BTC isn’t pegged to anything, it is worthless. However, it is untrue, as is the case with any precious metal or stone.
- Bitcoin is illegal as it isn’t legal tender. Not only is BTC now legal tender in El Salvador, and many other countries, but it also isn’t illegal as it does not conform to fiat standards.
If you want to learn more about why Bitcoin is valuable, check this article.
Conclusion
Bitcoin is evidently different from the majority of cryptocurrencies and is the gold standard that every crypto project must try to adhere to truly be as important as the so-called King among all cryptos. However, with innovation and development, some of the new cryptocurrencies present exciting use cases as well, such as NFTs, Metaverse, P2E gaming, etc.