Just a few days ago, the Lightning network was deployed onto the Bitcoin main net after months of test net trials. This comes just two months after SegWit was introduced. Both software innovations have allowed Bitcoin to sustainably scale and compete with its competitors, coins like Litecoin and Nano. In November 2017, it cost $4 to complete a BTC transaction. In December it reached astronomically high costs of $40 per transaction! But now, it only costs $0,40 to have your transaction put on the next block. Not only this but because of SegWit, each block can now hold even more transactions than before, further reducing the delay of transactions. Just to clarify, as there's been some confusion, SegWit is not a hard fork. It is merely a protocol upgrade
Whilst this is great for the Bitcoin network, what about the alternative coins? What about Litecoin, what about Nano, what about Dogecoin, what about Dash and most importantly, what about BCash? These coins have raised billions of dollars worth of investments yet Bitcoin maximalists argue that their value is little to zero now. Billions of dollars within cryptocurrencies are being treated as securities rather than actual cryptocurrencies. 95% of buyers purchase cryptocurrencies with the sole intention of selling them at a higher price. For they are not using the cryptocurrency for its original purpose - to act as a means of trade and a store of value. Millions of people have hopped on to the bandwagon of desire that will take them to the new Bitcoin years before everyone else. It’s as though they’re trying to go back in time to buy Bitcoin before it exploded in price, but they aren’t, they’re buying Dogecoin, a shit coin. A coin that reached a total valuation of $2 billion at its peak due to heavily unsupported promises. We all know that alternative coins are far from unique. How many websites and white papers do you read promising “instant” and “virtually free transactions? Well now, Bitcoin can do both of these.
Thanks to Segwit and Lightning, these alternative coins have become somewhat obsolete. Has SegWit and the Lightning network potentially put billions of dollars worth of investment into jeopardy or will there always be a reason to use other cryptocurrencies? Or will they always be needed for innovation purposes? Only time will show but its something worth spending time thinking about when crafting your investment strategy.
Perhaps coins that specialise in certain aspects will see more promise in the coming months. Coins like Monero that promise privacy, we recently dedicated a whole blog post to Monero: https://crypto101.org.uk/2018/03/02/monero/, and other coins that offer unique technology have better hopes of surviving a potential Bitcoin domination. IOTA, for example, uses tangle technology as opposed to the blockchain network. If the tangle attracts as much attention as the blockchain has, IOTA's price may also appreciate in value.
If you look at how bad the problem of high Bitcoin transaction costs had got in December, it's quite incredible to think that this seemingly grave danger of BTC was handled with such ease and success. If BTC had not fixed its disastrous fee issue, then it ran the risk of its market dominance further being eaten by the alternative coins. The start of 2018 has been highly successful for Bitcoin. We applaud the developers who created and have been testing SegWit and Lightning over the course of the last 12 months.
Food For Thought:
Ever since Coinbase started using SegWit, BTC's dominance has not dipped beneath 37% and is now at 42.7%
Tip 1: Seriously consider whether SegWit and Lightning network have potentially put billions of dollars worth of investment into jeopardy.
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Disclaimer: This article expresses our personal opinions, predictions, and market speculations based on the way we interpret the information we have available to us. It is by no means to be considered expert advice. We take no responsibility/ liability for any actions taken by you based on anything we have mentioned.
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