Everything depends on the price of Bitcoin, but is that good for us?
If the Bitcoin price goes up, the price of every cryptocurrency goes up. Thus, everything depends on Bitcoin, and that means that today the most important role of cryptocurrency is speculation. It must be changed! I do not want to say that trading is useless, of course, it is necessary. The question is, what will be the future of cryptocurrency?
I will try to approach the question from a perspective that supports my previous thoughts and beliefs regarding the subject. Bitcoin is the gold of the crypto-market, and its value cannot get compared to anything else. Ethereum and EOS are not even close as Bitcoin’s market capitalization is outperforming the whole market. The reason behind people’s faith and trust in Bitcoin is not part of this writing, since, regarding the consequences, it is irrelevant.
The reason behind the price increase in 2017 was the expansion of the ICO bubble because the crypto-community, in its naive and idealistic state, believed everything in spite of no real evidence. Consequently, people lost billions due to their negligent behavior. Who is responsible? Who is to blame for these events? We could start to elaborate on these questions, but we should not disregard the fact that tokenization — in its form — has greatly contributed to this defeat.
Did people that bought Bitcoin at a higher price sell it when the price was dropping? Or, did the people that had previously bought Bitcoin at a lower price got panicked and got rid of it in fear of not being able to make a profit from it? We do not have answers to these questions since we do not possess any information regarding these possible situations. However, concerning the future, it could be significant since the fact that the Bitcoin community has strong faith and hope is indisputable. Perhaps, deep down, we all know that the price drop of 2018 was not brought about by Bitcoin. It was the conditions of the crypto-market that, with all the disappointments and failures, generated Bitcoin’s fall in prices. It clearly could not have happened any other way.
However, in this writing, I am not investigating this field, but the fact why Bitcoin’s rise does not contribute to the strengthening of other cryptocurrencies. In my perspective, Bitcoin, being the digital gold, is different from all the other cryptocurrencies. It is undeniable that we need to separate Ethereum from the rest, too. However, they are currently facing problems that provoke contradictory judgments in most users. Ethereum has not been capable of rejuvenation and could not prove to its users. Ethereum is not Bitcoin, and Bitcoin is not Ethereum. Calling them cryptocurrencies is only a matter of terminology and conceptual categorization. Or, you may call it simplification; which could also be true on given bases and from an aspect of attribution.
Bitcoin is in the process of regaining its trust. I would refrain from getting into naive speculations since the market is unpredictable; especially when it comes to cryptocurrencies. However, I do believe that people want to rebuild their faith in Bitcoin and show the same confidence that they did back in 2017. At the time, beliefs and thoughts circulated that one BTC could cost USD 100,000 by the end of 2018. There were some even more reckless statements, too. If someone is aware of the financial logic behind the BTC PoW maximum supply, they know that these numbers, regarding the future value of BTC, are not that unimaginable and unrealistic. In the case of a product’s price increase where the maximum number is predetermined, it might bring about huge price increases in the whole market as well if there is excess demand. Even diamond or gold could not perform anything similar as the number of the maximum amount that can be mined and the number of stock management is of less consequence than in the case of BTC. Therefore, in the current economic environment, nothing compares to BTC or to its counterparts that functions on similar levels. Cryptocurrency provides an opportunity to reevaluate goods.
Let’s move on to the actual question. In my opinion, the reason why other cryptocurrencies are not getting stronger without Bitcoin is that, regarding their market needs and usability, they are mostly considered worthless items. Who would need a Bitcoin 2.0? Why would you buy another cryptocurrency if its functionality is the same? It only has significance due to the marketing approach, since its practical value does not change, meaning the similarity of the cryptocurrencies remains unchanged and there is no great diversification between them. As I have mentioned before, the reason for this is the lack of technological promises. There is such a low level of discrepancy between technologies that they do not create value to the users, hence no demand.
Like I have written it before, there is a need for a shift in perspective so that cryptocurrencies’ technology becomes the measurement of their price/value. However, this is being formed and the project that brings actual break-through to the market will be able to accomplish this shift. It should be a break-through that differentiates the project from the rest and does not become a Bitcoin 2.0. Instead, it becomes referred to as new Bitcoin in the blockchain history.
ILCoin is very close to an accomplishment such as this even though, as of now, it is listed amongst the top 100 coins and is not part of the top 10. As I approach this, it is irrelevant whether ILCoin is in the top 10 or not. The reason is, if my thoughts and beliefs become confirmed, there will be a completely new list; ILCoin will be the leader, ILCoin will be the example, ILCoin will be the cryptocurrency 2.0: ILCoin will be the new Bitcoin.