"But, but, but, Mr. Bitcoin Trader, how could you even pose such a question?"
Well, loyal and ever-bullish Bitcoin fan, I'm starting to see some cracks in the system, and I think it's my duty as a citizen of Bitcoin-land to let you know that something is going down, and it's not just the price of a Bitcoin.
You see, Bitcoins are still quite valuable, compared to just a few months ago when they were trading well below the all-time high of 2011. Anyone who bought Bitcoins before early 2013 is laughing all the way to the bank, I mean, they've been one of the best investments in recent memory.
I was continuously bullish from $32 all the way down to $2, and I bought, and I bought, and I bought. I did that because I knew that Bitcoin was one of the most important developments in the history of mankind, and I don't use those words lightly. It really was.
The difference between 2011 and now is that there are alternatives to Bitcoin. There's Litecoin, Feathercoin, Terracoin, Yo-Momma's-So-Fat Coin (okay I made that last one up), or any of the others that claim to be just that much better than Bitcoin.
For example, I received an email this week that asked me to look into Feathercoin:
"Feathercoin is seeing a lot of interest recently as a large community has rapidly sprung up around its adoption. This community is now positioning Feathercoin to be the next major success in crypto currencies."
I literally spent an hour reading through the various posts in the Feathercoin forums, looking for the reason why this alt-currency had garnered so much attention. In the end, the only logical conclusion I could come to was that people were interested in Feathercoin because they wanted it to succeed. There was no reason why it should succeed, just that they wanted it to.
"So why are these alternatives a threat to Bitcoin?"
Well, they're not.
"Please, Mr. Bitcoin Trader, my time is precious. Tell me why you think this is the end of Bitcoin?"
Alright, alright.
Bitcoin is, in fact, still an amazing innovation. Unfortunately, it's hit an adoption plateau. The problem is, Bitcoin's destiny is to remain limited to use within a very niche segment of society.
"You're wrong. People are sick of central banks and governments. They want monetary freedom and anonymity. They want to be able to send money to anyone, anywhere, cheaply and without a middleman. They don't want payment processors deciding who gets paid and who doesn't get paid. People want de-centralized, peer-to-peer systems that stick it to the man!"
You're right. Some people want exactly that, and they have it with Bitcoin (or Litecoin, or Terracoin, or whatever).
Unfortunately, hardcore, militant Bitcoin fans are failing to recognize the fact that the vast majority of people just want a cheap, hassle-free payment system. They want to spend their money anywhere and do it cheaply, quickly and securely. They don't want to go through the trouble of buying a volatile, intermediate digital currency just so they can buy the very same things they could with a credit card or PayPal. Yes there are Silk Road users and gamblers that may find it worthwhile to use Bitcoin for their own reasons, but it's a tiny group of people that will bother to do it; maybe hundreds of thousands at best.
The truth is, the Bitcoin economy is 98% speculators, and 2% economy, which means it's no better than the Feathercoin community that supports its currency simply for the sake of supporting it. In the grand scheme of things, about the same number of people use Feathercoin as Bitcoin: a fraction of the population near zero.
"So why didn't you think this way in 2011 and 2012 when you were buying up all those Bitcoins?
Because there were no alternatives at the time, and I mean
real alternatives, like "Ripple."
"You mean that scam run by OpenCoin?"
Ahh, yes, the ubiquitous scam claim, ever popular on IRC, at Bitcointalk.org, and on Reddit.
Wake up, Mr. Bitcoiner, and smell the profit. Ripple is in the process of developing that very system that everyone else is hoping for, outside of the militant-libertarian-anarchist Bitcoin community, of course. Once completed, Ripple will be a peer-to-peer global payment solution that will satisfy the rest (i.e. most) of us.
While Bitcoiners wonder why their investments are dwindling in value, I'll be instantly converting my Canadian dollars into US Dollars, or Yen, or Euros, and spending freely. Transactions will be irreversible, instant, and global. They'll be in fiat and math-based currency alike. That's right, you'll be able to trade your Bitcoins, Feathercoins, and Terracoins within Ripple (you already can).
While I swipe my Ripple debit-card at the grocery store, Bitcoiners will be buying Gyft-cards using their smartphones and trying to make their square currency fit into a round economy. Bitcoin is clunky and volatile. It's slow, cumbersome, and expensive. It's fringe, complicated, and difficult.
I still think Bitcoin was an incredible stepping stone to bigger and better methods of leveraging the Internet for global payments. Remember, "Bitcoin is an experiment," and it's achieved some amazing things.
However, after four years of beta-testing, it's time to take the concept and make it work for everyone else. Unfortunately, Bitcoin is not going to be the one to make that happen.
Remember when, at $3 each, I said Bitcoin was the
best investment of 2012? At 53 XRP to the USD, Ripple is the best investment of 2013, and I've already put my money where my mouth is. I recommend you do the same.
We'll talk in 2015.
(Note to readers: you can now also find this blog at
therippletrader.com.)
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