Bitcoin Only vs ETH/DeFi/Altcoins
with Ivan Brightly
Bitcoin has been on a record-shattering bull run since November last year. After smashing through its 2017 $20k all-time high, the cryptocurrency has been on an unstoppable rally - breaking past 40k in January before stagnating in the '30s and then making a strong comeback this February.
And it's been like a tide that raises all ships - because other cryptocurrencies like Ethereum are also hitting unprecedented highs. DeFi tokens like SushiSwap are witnessing wild price jumps. In short, the altcoin market is here, and it's commanding attention.
As such, many Bitcoin investors are wondering whether to jump onto the altcoin train. Or should they stick to the more 'surefire' Bitcoin? Surefire in the sense that it's not going to disappear next week or be toppled by a bug like most of the 'shitcoins' are prone to. It's a confusing question for any Bitcoin investor. So, what's the answer?
Brad and Ivan explore this question in depth, along with several more issues:
Bitcoin's 'free riders'
Sybil and 51% attacks
Is DeFi really about decentralizing finance?
Satoshi
The Lightning Network
Decentralized autonomous organizations (DAOs)
These are the highlights of the conversation:
#1. Blockchain-inspired Tech and Their Altcoins
Bitcoin brought forth a horde of activity. Blockchain is no longer about just internet money now. Instead, we have all nature of cool applications utilizing the technology. However, the baffling thing is that nearly all these applications come with some manner of token (which is exciting or problematic depending on your beliefs). The result? Stacking onto an already overflooded altcoin market.
Look, no one's shooting down ingenious ideas that could deploy blockchain's brilliance to help people. But all these tokens are kind of diluting the space. "Ponzis, food coins, and whales" are the kind of stuff we have to deal with in the name of altcoins, as Brad observes. At some point, something might have to give.
#2. The Lightning Network and how Private it Really is
The Lightning Network is a Bitcoin scaling solution by Joseph Poon and Thaddeus Dryja. It's a second layer for Bitcoin that allows users to transact off the blockchain with minuscule fees and without knowing/trusting each other. This saves enormously on waiting time and fees.
However, the project is still in development, and you can expect some teething problems. One of the concerns is privacy. Just how private is it right now? Brad thinks it's "ready for some money," but Ivan "would not recommend it" to his friends because he thinks it's "too early." So what's a humble investor to do? Like a lot of things in Bitcoin, researching the latest developments is always crucial.
#3. Bitcoin Freeriding
Brad and Ivan wade into the issue of Bitcoin freeriding. Per Ivan, free riders are people who invest in Bitcoin, and that's their only contribution to the space. This is totally fine, but they need to acknowledge people who have contributed to Bitcoin's infrastructure, such as exchanges. Others have educated regulators that Bitcoin is not some darknet currency that's all about breaking the law. People like these have "bootstrapped the space", according to him. And that's true.
Brad would push back against this idea, however. He thinks it's a fallacy and that people who hold the "free riders" mentality think of the currency as equity instead of an asset or a currency - and "it's actually good to have all these free riders."
It's true that the space is awash with all these free riders. But not everyone had the wherewithal to contribute to Bitcoin like the people mentioned by Ivan. What free riders from every corner of the globe have done is they have contributed enormously to Bitcoin's acceptance. Remember, a currency's value is only as much worth as people ascribe to it. If that's the case, then, by all means, can we please have more Bitcoin free riders?
Timestamps
00:00:00 - Intro by Brad
00:03:31 - Delving into the 'Bitcoin free rider' debate, the recent spate of 51% attacks and the Bitcoin and Bitcoin Cash war
00:22:50 - All these blockchain applications are cool, but are the accompanying tokens really necessary?
00:25:50 - Is DeFi really about helping people? The case of Uniswap
00:34:41 - Spirited discussion on the privacy of the Lightning Network
00:46:44 - Delving into 'DAO's
00:52:51 - Are tokens going to replace equity?
00:57:00 - Brad's strong case for Bitcoin-only investing
1:24:55 - Ivan and Brad's closing arguments on whether to go Bitcoin-only
1:29:35 - Why you should start paying attention to the Lightning Network
Podcast Mentions
Ivan Brightly and Brad Mill's first episode
Satoshi's disapproval of WikiLeaks' use of Bitcoin
Monero Sybil attack Bitcoin Gold and Firo's 51% attacks
Uniswap and Sushi Swap DeFi protocols