Since the beginning of the cryptocurrency and blockchain revolution, there has been one big, unwritten rule: Bitcoin comes first. And that might be ending soon.
For years, the entirety of the crypto space formed a coalition, an alliance, centered around promoting Bitcoin as the leading technology, and only after this was done would they focus on the individual projects and separate blockchains they preferred. This coalition got us to where we are today.
But, in the wake of the unprecedented victory in the US elections for cryptocurrency as a whole, it looks like this coalition will be over soon.
Why the Coalition Made Sense
For many years, it made sense to push a Bitcoin-first approach to cryptocurrency adoption, no matter the project. This is because, despite the diversity in the cryptocurrency ecosystem, enough interests were aligned to make it worth it.
Bitcoin was 90% of everything
Up until the block size wars and the rise of Ethereum, Bitcoin was, quite frankly, basically all of the crypto space.
In market capitalization terms it was close to 90% (or above) of the whole space. It was also the vast majority of payments, had the vast majority of users, and overall represented most of everything in crypto. For years it made sense for everyone to promote Bitcoin, and for Bitcoin to promote no one.
Bitcoin was the mother codebase
A vast majority of early cryptocurrency projects were forked from Bitcoin. As such, they relied on a strong and successful Bitcoin to produce and maintain the best and most viable codebase that other projects backported from. In this case, Bitcoin dying would mean chaos for the rest of the space from a purely technical perspective.
Proof-of-work mining and Nakamoto consensus, too, were by far the most common consensus mechanism in crypto for many years. It wasn't until years later when proof-of-stake and other methods started to become popular.
Money was the top use case
At the start, virtually every cryptocurrency was trying to do the same basic thing as Bitcoin: censorship-resistant money and payments. In order to build a use case, many builders pushed Bitcoin as the first, most viable options, and then snuck in their preferred project along with it. Get someone to accept Bitcoin and it was easy to then propose adding more options.
Maximalism wasn't really a thing
Bitcoin maximalism (or any coin) wasn't really that much of a thing before the block size war era. Everyone in the space either focused on Bitcoin plus other coins, or Bitcoin only. But the "Bitcoin only" perspective didn't really care to be threatened by other options.
The mutual alignment of incentives throughout the space made it so that pushing everything forward together, either as Bitcoin-first or Bitcoin-only, made perfect sense.
Why It Doesn't Make Sense Anymore
Today, this Bitcoin-first approach doesn't really work anymore. The incentives are no longer as aligned as they were in the early days, for a number of reasons.
Bitcoin is a shrinking minority of real usage
In the 2017 era and before, Bitcoin represented the majority of all blockchain transactions, virtually all payments, and dominated most use cases. Today, none of that is remotely true.
Bitcoin is no longer the leader in payments, with Litecoin and stablecoins largely taking the top spots. In addition to losing the payments throne, much usage has drifted to tokens, NFTs, DeFi, and other use cases where Bitcoin doesn't meaningfully compete. And finally, in terms of total blockchain transactions, Bitcoin's chain contributes a negligible percentage of total transactions by all cryptocurrencies combined.
Trying to lead with Bitcoin now makes very little sense for segments of the market that are not focused on investment. It would be the modern day equivalent of what in 2017 would be getting Digibyte added as a payment option in hopes of getting Bitcoin accepted later.
Few coins are Bitcoin-based or mined
Today, Bitcoin-based, UTXO model, or even proof-of-work cryptocurrencies, are increasingly in the minority. The vast majority of newer projects are account-based proof-of-stake coins, many of them Ethereum-based.
Bitcoin collapsing today would still be a blow to confidence and capital in crypto, but technologically it would not impact much. Therefore, other projects are much less interested in seeing Bitcoin as a technology promoted and developed than before. It's arguable that, today, Ethereum collapsing would be the largest technological blow to the space.
Bitcoin is a tiny percentage of use cases
Early-days Bitcoin did most of the things that the rest of the cryptocurrency world did: store-of-value, payments, privacy (or so we thought), immutable ledger timestamping, even some of the first tokens. Today, it only dominates one use case: store-of-value. Arguably it also dominates high-value payments still, but not payments in general.
A payments blockchain would have no reason to promote Bitcoin first. Neither would a gaming chain, a DeFi network, a token project, and so on. In nearly every case except for investment, it makes no sense to bring up Bitcoin first anymore.
Maximalism made working together make no sense
The growth of maximalist mentalities has severely diminished the benefits of working with Bitcoiners. In the past, both Bitcoiners and altcoiners had an understanding that they all would get Bitcoin in the door, then the altcoiners would try to get their favorite projects to follow, with neither support nor opposition from Bitcoiners. Not anymore.
Today, if you let the Bitcoiners go first, they will very likely poison the well for everyone who comes after. It's actually counter-productive to bring them to the table at all now!
Final Straws
As a result of the shifts in the space, the pressure to dissolve the coalition has been mounting over the years. But the final straws only happened recently, surrounding two Ls: Litecoin and liberty.
Anti-Crypto Lobbying and Backstabbing
The first of the final straws was the fight over the US strategic reserve. Bitcoiners actively lobbying to keep other cryptocurrencies out of the reserve triggered a response from Litecoin's account.
This long receipt-filled tirade revealed that Litecoin leaders and community members had put considerable work towards promoting Bitcoin as legal tender in El Salvador, testing out the Lightning network, and more key milestones for Bitcoin, only to have their project explicitly cut out of every major deal they helped to cement.
This feeling of backstabbing and ingratitude from Bitcoiners essentially echoes what most of the space has probably felt for a long time: we don't need you. You need us. And we're tired of you.
Now that we've reached this point, with Bitcoin's longest and closet ally expressing these sentiments, we'll see more projects start to leave the fold. Bitcoin will have to fight its own battles from here on out.
Anti-Liberty Push: Roger Ver
The final straw has been to see how many Bitcoin thought leaders came out against Bitcoin pioneer Roger Ver as he faces life in prison for tax-related issues. Despite this representing one of the most egregious cases of overreach, injustice, and deliberate lawfare that we've seen, so many influencers pushing back against his calls for clemency, despite so many elsewhere in the industry backing his innocence.
This one is especially important because the biggest use case of the "we're all in this together" coalition was to approach the libertarian, and otherwise pro-sovereignty, crowd. Because it's a greater movement not populated by highly technical people, using Bitcoin as a freedom symbol to simplify the entire space just made sense.
But now, to see thought leaders of Bitcoin justify one of the most absurd and evil actions of the American government against an innocent person has certainly changed some minds. Bitcoin isn't about freedom anymore. Now, pushing Bitcoin to freedom lovers is a liability when you have to explain the evil words of its advocates.
What Next?
Now, as the Bitcoin coalition dissolves, we're at a point where it isn't necessary anymore.
The space has grown. The most powerful government in the world has openly declared allegiance to crypto, and not Bitcoin only (or even particularly). We've made it. We can go our own ways now.
In all likelihood, Bitcoin will continue to be the institutional investment and digital gold darling that it is today, at least for some time. The rest of the space can tackle all the various technological issues surrounding building a truly free society.
Bitcoin's coalition will be over soon. And that's good for everyone.
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Haha got removed
Hey! This community really likes downvoting so the best indicator of the article's quality is actually the number of comments - it was 23 which is not bad at all. They removed the share in several hours, unfortunately. The formal reason was "(BTC) is already at the limit [coin limits here: cctopiclimits.onrender com - @x-rain] of posts allowed in the top 50". If I shared the link at the moment when BTC topic was already full, they were supposed to delete it automatically at the moment of sharing (since they claim a bot automatically does this work). If the BTC topic wasn't full at the moment of sharing, why they deleted the share later?.. Confused about how this subreddit works...
The person who runs that sub is a serial scammer and a toxic person. That's unfortunately the simple reason it was removed.
Lol, I didn't know 😁
Now you do!
It made sense at start to push the whole crypto world, now it's well established and everyone can think for himself
Yes, exactly.
Or, it's still promoting crypto as a whole, just not by promoting Bitcoin first.
It won't be long before bitcoin is not usable for small transactions anymore because of the cost of transactions and the value of one Satoshi. Small UTXOs become unspendable as the cost of the transaction is larger than the value of the UTXO. And when bitcoin is at $100,000 once Satoshi is one cent. As bitcoin goes above $100,000. It will be increasingly difficult to make smaller transactions.
Litecoin and Dash have many of the same mechanisms of BTC and are still at prices that allow for small transactions.
Yeah we're already there.