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Market Lab Report - A New Take on Bitcoin Maximalists; Blockchain the Antidote to Authoritarianism; Biggest Threat to Bitcoin

Market Lab Report / Dr. K's Crypto-Corner

by Dr. Chris Kacher

The Metaversal Evolution Will Not Be Centralized™

Note, Bitcoin is capitalized when discussing it as a protocol, lower case when discussed as a medium of exchange. 

A New Take on Bitcoin Maximalists

Some have suggested all altcoins will be overtaken by Bitcoin. Accomplished, renowned individuals such as Robert Breedlove and Alex Goldstein are bearish on all altcoins including Ethereum because they claim they are not truly decentralized. You could call them Bitcoin maximalists. They say everything except Bitcoin is vulnerable to politics and regulations. For this reason, both Breedlove and Goldstein think the market value of altcoins will not keep pace with Bitcoin.

While they say PoS is less decentralized than PoW, I would argue that ETH 2.0 which becomes fully PoS has numerous validators which will make it even more decentralized than before. As for other altcoins, we can have partial centralization and even decentralization via NFTs. While anything other than decentralized NFTs will not be fully private nor uncensorable, DeFi, DEXs, and those NFTs deemed securities can still can provide immense utility and improvement over current non-blockchain centralized systems.

Goldstein admits a few altcoins may succeed and achieve product market fit and eventual decentralization but he doesn't have a clear line of sight on this yet. He believes all Bitcoin needs to do is continue to exist as it rises in price against falling fiat. That said, the massive utility created by at least a few altcoins suggest a co-existence between Bitcoin and the best altcoins.

Blockchain the Antidote to Authoritarianism
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."- Thomas Jefferson

North Korea and Eritrea among other regions show how human beings are capable of destroying themselves. If we dont decentralize, and power is under one person, life could be destroyed. A totalitarian dystopia is the major existential risk.

While Bitcoin delivers NGU (number-go-up) and FGU (freedom-go-up) as the world's greatest Trojan horse to governments, and while most all of the 12,000 altcoins will die much as most of the dot.coms died after the year 2000, the best ones will survive and thrive as there will continue to be huge innovation. The pace of change is high order exponential. Smart contract platforms are being built at a furious pace. They are becoming faster and more decentralized. The 50% split between Bitcoin and altcoins is possible since the total addressable market is over $400 trillion which includes DeFi, asset management, insurance, banking, and  exchanges, all of which can be disrupted. The counterargument is a 100% Bitcoin which could potentially absorb this market should liquid, lightning, taproot, and its other evolutions launch successfully. Any altcoin technology would likely port over to Bitcoin via higher order protocols such as RSK. Censorship resistance is key so these technologies would want to build on the most decentralized protocol. No technology provides this better than Bitcoin due to its towering network effect.

Singularly, if Bitcoin did become the backbone of blockchain much as TCP/IP became the backbone of the internet despite superior technologies that tried to outcompete it in the 1990s, the idea of a One Coin should only be about Bitcoin becoming the most secure, private, uncensorable platform on which other companies build. In such a case, Ethereum and other layer 1 coins would likely vanish. As Bitcoin evolves, it is working on addressing the demand for DEXs and DeFi. But the leading alts that encompass gaming (Axie Infinity, UFO, Iluvium, etc) as well as NFTs should continue to co-exist, building atop the Bitcoin blockchain should such a scenario play out.

Biggest Threat to Bitcoin

Existential threats to Bitcoin carry very low probability such as:

=An unforeseen fatal protocol issue within Bitcoin though it is designed so that it can be evolved and corrected without affecting its structure.

=Some natural disaster which wipes out electronics, but there are plan Bs in place such as mesh networks, and in the worst case, rebuilding the evolutionary technology would take place, superseding all that came before it, thus most legacy systems would remain dead and buried.

But ultimately, the biggest threat to Bitcoin's rise is the state's response. The bigger Bitcoin becomes, the bigger an enemy it is to the state. At some point, it becomes an existential threat to the state due to its separation of money and state. But sovereign wealth funds and institutions are buying Bitcoin, and any state that oppresses Bitcoin will encourage other states to embrace it since the economic gains are immense. The bitcoinization of most forms of fiat is increasingly an inevitability in the coming years #ElSalvador #Argentina #Paraguay #Brazil #Panama. Perhaps in the final analysis, the U.S. dollar and Bitcoin co-exist while weaker fiat is dollarized or bitcoinized. But if the USD is the last domino to fall, the world of value would be priced in bitcoin along with a smaller share for altcoins that build on Bitcoin's blockchain that provide utility above and beyond that of Bitcoin.

Bitcoin as SOV in the Borderless Metaverse 

In the borderless Metaverse, bitcoin is already the base unit of value against all altcoins. Over the next generation, the majority of people will be spending the majority of their time in the Metaverse. Already, GenZers reflect this behavior. As Bitcoin continues to eat fiat as digital continues to eat the world, the centralized power of respective nation-state governments will diminish and eventually founder. Smaller city-states and communal-states will emerge as power is decentralized via crypto technology. As Michael Saylor has said, #Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.
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