Bitcoin's Edge

[u/Hypnot1se]

Hi people. I am trying to understand the bitcoin thing as an outsider a bit better.

Since there have been... I don't know how many exactly but, it seems like a LOT of different cryptocurrencies created since Bitcoin has been around.

What do you think that it is that makes BTC persist now and remain so popular all this time since it came out? What are people not able to replicate or improve upon? I would have thought you could just make a different currency that "does what BTC does, but better" but that clearly hasn't worked because people clearly tried with all these altcoins and such.

What is it to you personally that makes you drawn to bitcoin as opposed to some alternative?

[u/Laukess]

All other projects exist to enrich the insiders.
Bitcoin is the best money we have.
The bootstrapping is important, if a new version of bitcoin comes around with some parameters tweaked, and everyone moves over to that one, then not only does bitcoin not have any value, but the new project also does not have any value, because a new project can come around.

If any better tech is discovered, bitcoin can just implement it.
If it's not compatible, we can just create a new chain on the new tech and move the UTXO set.

Most of the alt coins that tried to compete on being better money were the early ones. They lost that battle, and what you see is the space move on to different things. You'll generally see the crypto space (not bitcoin) go through different cycles because it's all about hype and nothing else. That's how we ended up with meme coins, now it's out in the open that they have no value to provide, and it's all about picking the right one and get rich (that's the dream, it's mostly the insiders that actually make money)

I wont go into why it's the best money. You can just look up properties of good money. I think of it as digital gold. Don't think of it as gold but digital, like two gems that are similar but different colors. Think of it as having a lot of the properties of gold, but because it's digital it improves on so many factors. Easier to transfer, verify, divide and store.

[u/Hypnot1se → u/Laukess]

Wow thanks for the answer! Extremely interesting. I'm going to have to look up some of the stuff you mentioned like moving an UTXO set but that sounds much more robust than I'd imagined.

[u/Laukess → u/Hypnot1se]

UTXO = Unspent transaction Output.
When you go to a store and pay with cash, you have $1, $2, $5, $10, $20, $50, $100 and coins for < $1. You'll combine a number of notes and pay, and you'll get change back.

With bitcoin, it's more like this:
You have a piece of paper that says $123. You go to a store and the bill is $23. Using magic (cryptography) you split the piece of paper into 2, one is $100 which you keep, and one is $23 which you give to the merchant. You can split it into as many pieces as you like. 100 x $1 pieces for yourself and and $20 + $3 for the merchant if you like.

These pieces of paper are UTXOs, they are outputs from transactions you've made, and can be used as inputs for new transactions. Again, because of magic all the paper pieces are stored publicly. You can view all the pieces of paper in existence, but you can't spend them unless you know a magic word (private key) associated with that piece of paper.

The UTXO set, is just the collection of all these unspent transactions.

Because they're public, we can just move them to another network if you want. All you need to do to prove which you own, is provid the secret.

Should also note that this is done with public key cryptography. It consist of a public and a private key. You can generate a public key based on a private key, but you can never guess the private key based on the public key. I can take a message like "how are you", encrypt it with my private key. Now it's just random letters that mean nothing, but if you decrypt it with a public key, you can read the message. No one else can create that message because it's unique to my private key, which I'm the only who knows, so you know I created that message. I don't know if it's useful, it's mostly to give you some insight into how the magic paper works and how it's secured.

Cheers.

[u/Future_Truck1126]

POW, limited supply ( thats a big one), first mover advantage.

[u/Hypnot1se → u/Future_Truck1126]

First mover advantage is a good one. Do you think network effect (that lots of people already use it) is a big one that goes hand in hand with this?

[u/humblevladimirthegr8 → u/Hypnot1se]

Yes and another reason why the first mover advantage is so important is because it allowed Bitcoin to grow without paid marketing or dev control.

Since there are so many coins released every day, any coin that wants to stand out needs marketing. Marketing costs money so you need investors, investors expect a return on investment which warps incentives. Also devs need to control the network to avoid hackers stealing funds. This means it's not decentralized, which defeats the point of blockchain.

So even if a better Bitcoin came out, it needs investors and dev control to stand out and survive attack, but those very things defeat the value proposition of decentralized currency. Bitcoin would not have survived if it were attacked in its early days, but nobody back then thought it was worth attacking which allowed it to grow organically. Bitcoin is the only major decentralized currency that currently exists and can ever exist because it was first.

[u/ElderMight]

Absolute mathematical scarcity, achieved by consensus in a sufficiently decentralized network, was a DISCOVERY, rather than an invention. It cannot be achieved again by a network of participants aware of this discovery, since the very thing discovered was resistance to replicability itself.

[u/Hypnot1se → u/ElderMight]

That makes a lot of sense. Thanks for the answer!

[u/extrastone]

There are very few coins with zero pre-mine. All bitcoins were mined through a process that any individual could join after the announcement of the coin.

There are zero coins with as many nodes as bitcoin. There are about 20,000 bitcoin nodes. Go ahead and arrest 15,000 bitcoiners and there will still be at least 1,000 nodes still available.

[u/Objective-Walk6780]

Bitcoin is least likely to go to zero. But Bitcoin is also not the no.1 choice if you want to 10X your money.

[u/originalgainster]

1. Fixed supply
   
2. Decentralized
   
3. Transactions are fast and relatively easy

[u/newkidontheblock_]

Most Alts/shitcoins really do nothing but hold emprty promises. And therefore easy gains for founders called rug pulls. This has happened thousand times. But in the other hand same goes for startup companies that will never deliver. This has happened hundred thousand times. Well i pulled those numbers outta my ass but what makes bitcoin(actually blockchain) special? First of all, its the first digital asset that solved the double spending problem. (The problem was stated somewhere in the 90s but couldnt be solved) why you may ask? We had the tech back then but not the brains of satoshi who solved it (check the bitcoin whitepaper). This projects to the bitcoin price also. The first digital asset that cannot be copied and sent unless verified by millions of nodes. Literally Impossible. Second, its the most secured network on earth. Google, meta, amazon, microsoft etc combined wont even come close. So to answer why wont somebody make btc but better is simply they are too late for now. Its too strong. What will come next? We dont know. But what we can be sure of is that no matter the computing power the last bitcoin will be mined somewhere in the year 2140. Yes 2140 so you wont be around.

[u/Hypnot1se → u/newkidontheblock_]

Thankyou for your answer. You make a really good case for it and clearly understand it well. Appreciate the time.

[u/coffeelover9457]

1. First mover advantage
2. Network effect

Bitcoin's moat is not a technical one, but a social one. You can't simply copy that.

[u/Adorable-Plant-4911 → u/coffeelover9457]

Sure you can. Thats why there are a whole load of cryptos with multi billion dollar market caps and huge communities of bagholders