This week, the topic seems to be one that shouldn’t need to be highlighted but given how the markets seem to be able to remain irrational longer than many people can remain solvent1*, I figure it is well overdue to state the obvious thing that BSV isn’t.
Bitcoin is NOT an investment product.
Bitcoin is simply a technology. There are some derivative projects in the space that market themselves as investments (such as BTC), but saying a pig is a horse doesn’t make it one, and you can continue to tell yourself it is one until someone takes you up on the offer to ride it.
Now to be fair, it isn’t exactly the same as technology products in the past, where paying for its use was completely separate from the technology platform itself. One of the main innovations of digital currencies and blockchains is that they invented with them the means of payment for their own access, via a local token. If we were to use an analogy, they invented a new form of department store, where you could only pay for goods with its own issued store currency. In addition, anyone was free to set up a shop in the department store and sell their goods, and also transacted in the store’s currency. The store’s management, which is responsible for setting up and running the facilities, also get remunerated in the store’s currency for their services to the vendors and customers. Basically, it sets up a potential ecosystem for services and goods to be exchanged and traded in the store all using its local currency. In this sense, a blockchain platform is its own small economic microcosm.
This, while one of blockchain’s biggest innovations, is also one of its worse drawbacks. Because one of the primary design tenets of Bitcoin was to allow for micropayment economies and the reduction of trust intermediaries (due to the problematic costs of running such intermediaries as custodians of clients’ private information), it necessitated the use of its own token as a means of payment. But because the token was a form of money without any real-world peg or administrative overseer, in conjunction with the fact that it was a limited commodity, people started hoarding it with the expectation of its rise in value due to expected rise in usefulness of the technology.
This became the Achilles heel of the entire blockchain industry. An anathema to what the system originally set out to do. Instead of being used as micropayment transactions, people became only interested in buying and holding the tokens. This of course should have made the value of the tokens drop in value, if the market was rational, as there was little to do with the tokens if the network wasn’t going to be used to record actual transactions and trades on the ledger. But that didn’t stop people from marketing the project as a financial get-rich-quick scheme—ahem, I mean inflation hedge for fiat currencies. Made worse by the fact that those who bought in early to Bitcoin now with newfound wealth due to the price appreciation had a lot more money to throw around and hire marketing, PR and social media mavens to push their unique form of pyramid scheme narratives. This unfortunately is what the crypto industry has developed into today: a decades long anti-establishment hustle at best, Ponzi scheme at worse.
Ethereum is NOT an investment platform.
Ethereum started off with noble goals. They set off to build new products and services on a blockchain platform when BTC proponents pivoted and locked the project into a “digital gold” only purpose; (because that purpose seemed very successful at getting the most new joiners into the Ponzi scheme). Original founders of Ethereum wanted to pursue the ‘programmable money’ part of the original bitcoin promise, and was rejected by the then already ossified BTC community and centralized core developer team. Thus they set out to build a new system that would be able to support smart contracts and programmable money. (The same technology originally present in Bitcoin that has since been restored on BSV). Unfortunately, they built a system that was fatally flawed as they lacked sufficient understanding of two key innovations in Bitcoin:
- The UTXO coin model. This model is how bitcoins are represented on the network and ensures unbounded scalability to global levels without needing to keep an ever bloating state graph on all nodes.
- The unique form of achieving Turing Completeness in Bitcoin was via Turing equivalence as a 2-Push down automata, which is not a Turing machine, but an automata which is equivalent to one. This was not well understood for a very long time, even among so-called experts in Bitcoin, and was not understood by the founders of Ethereum who thought that Bitcoin was not Turing complete, which drove them to re-invent a new scripting language and virtual machine which was more traditional, but by doing so brought along all of the complications of unpredictable complex behavior in their smart contracts. It seems in retrospect that looping constructs are more of a bane than benefit when it comes to code which can spend funds. Their pursuit of the ill-fated malaligned goal of “code is law” was their own undoing, and to this day will be the Achilles heel of Ethereum. Yet, that did not stop them from giving birth to three of the most over-hyped, over-promised, yet massively under-delivering ‘revolutions’ in the industry, that of Distributed Autonomous Organizations (DAOs), Initial Coin Offerings (ICOs), and Decentralized Finance (DeFi). It seems that trendy acronyms are things that people like to put their life savings into without any understanding of what they are, so long as they are popular. (Millennials… huh)
Which brings us to the problem with the whole crypto industry today: people are predisposed, nay, primed to throw their money away on any new-fangled, far-fetched, shiny, cool sounding concept, no matter how impractical it may be, even if they don’t understand its utility, or even if it HAS any utility. The problem is that utility doesn’t even factor into the calculus of value anymore. The whole industry has gone insane, much like the subprime mortgage bubble of early 2000s. Digital currency markets have become the new penny-stock market, where picking a winner and making a quick killing off your investment trumps any rational investment thesis. Picking a quick winner is all about picking which companies (or in crypto, projects with a token) will most likely catch the interest of other suckers (ahem, investors) in the near future. The key is to get in first.
We have seen many fad projects come and go after Bitcoin some are still in the limelight, others have faded from popular interest… Ethereum, Dogecoin, Dash, Factom, Monero, Ripple, Litecoin, Tezos, EOS, Cardano, ZCash, Algorand, and most recently, Solana. The list in endless. There are thousands to pick from. Each and every one of them had some fancy gimmick, some amazing feature that Bitcoin was perceived lacking that they needed to fix and getting some geeky looking autistic nerd to be the spokesperson boosted the street cred even more. As long as new investment (dumb money) was only interested in what new coin may pump next, getting in on the action early was their only concern, and it was easy to get funding. In fact, in 2015-2017 you just had to put “blockchain” in your prospectus somewhere and you were likely to get millions in funding, regardless of whether or not you actually had a blockchain, technology, or even any developers! (Onecoin, I’m looking at you).
In this mountain of charlatans and faux projects, professing to solve the world’s problems, even some that you didn’t know you had, there stands one project that is the black sheep. One with nothing to sell, no early access, no special insider deals, nothing, besides a promise of scalability, simplicity, and an economic model that guarantees forever low fees, or it doesn’t work at all… BSV.
BSV is not an investment product. It is just the original Bitcoin protocol. You do not ‘buy’ it. You will not get rich quick by investing in it. But if you build on it, and use it, it will eventually take over all other use cases, and of all the other blockchain projects, because Bitcoin was designed with global scale in mind. Only the most generic, neutral, unspecialized, protocol that has no bells and whistles and locked in stone, can stand to be the neutral common ground for all possible use cases and applications that the world can build on. Blockchain protocol developers hate this because BSV puts them out of a job. Centralized protocol developers and founders can only make their millions if they start their OWN new shiny protocol and get new naive investors to buy into their project in the hopes of getting rich quick. The only people who benefit from this perpetual proliferation of blockchain projects are the centralized protocol developers. They are the only ones who are guaranteed to get rich quick (though that is not what they will tell you the potential buyer of their coins)—the rest of you are just the suckers.
BSV is not an investment. It is technology for the future. Build on it. Use it. Expect returns in the future, but only if it is used. If it is not used it will be worthless. If it is used, then it can be worth everything. Not because you can find new suckers to take your token position, but because you will need to use the tokens in order to transact with everyone else.
 Famous quote by economist John Maynard Keynes
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