What's the Bitcoin investment thesis? What should you buy, and why (under which assumptions)?
If you haven't read my "stop hoarding gas tokens" article, go ahead and read it first to get my token categories:
https://inleo.io/@thedessertlinux/stop-hoarding-gas-tokens-crypto-investing-for-the-modern-age-8ga
First, let's break down the token roles. Note that I'll have to do this twice, because Bitcoin's original design had much different roles than we have now.
🪙GAS TOKEN: Bitcoin
Bitcoin's gas token role was, of course, served by Bitcoin: everything you needed to do with it cost Bitcoin to send.
Historically, one of the reasons you'd buy Bitcoin (though not the only reason) was to afford Bitcoin transactions.
🪙INVESTMENT TOKEN: Hashrate
If you wanted to invest in Bitcoin's future success, you'd mine. Miners get all block rewards and transaction fees, so the more widely Bitcoin is adopted as a global money, the more money miners would make.
You'd buy ASICs if you believed Bitcoin would be used frequently long-term (and thought you could succeed in the competitive, cutthroat world of mining).
🪙PRODUCT TOKEN: Bitcoin
At its core, the purpose of Bitcoin was to own and send Bitcoin for monetary purposes.
You would buy Bitcoin as a product token if you wanted to use it, mainly to use it as money (store of value and medium of exchange).
Since the block size wars things have changed, however, and the main purpose has shifted to an investment. Now we have a new category of token roles:
🪙GAS TOKEN: Bitcoin/liquidity
Bitcoin's gas token may still be Bitcoin (since that's what's required to move it on-chain), but now, with the new investment use case, that isn't always necessary.
A substitute gas token is now liquidity. This could either be channel capacity in the Lightning network, or exchange/custodian liquidity.
You should acquire liquidity or Bitcoin as a gas token if you want to shift around ownership of the underlying Bitcoin asset.
🪙INVESTMENT TOKEN: Bitcoin
Since Bitcoin's success no longer translates to mining revenue (quite the opposite these days), the new investment token is just Bitcoin. If you believe Bitcoin will succeed and do well long-term, you'll buy Bitcoin.
🪙PRODUCT TOKEN: Bitcoin
Finally, the product token is Bitcoin, purely as a store of value. If you want to buy something that keeps its value long-term or goes up, you'll buy Bitcoin. Pretty much identical to the investment role.
Note that Bitcoin has always received a high amount of speculation, even under its previous role as money. So my overall message of "stop hoarding gas tokens" has historically not been applicable to the single most financially-successful cryptocurrency (because the gas token happens to be the product and investment token now). No wonder old habits die hard! 😅
What about the Bitcoin forks?
Bitcoin's forks (mainly Bitcoin Cash, but possibly Bitcoin SV too) are similar to the original thesis, except the product token could have shifted to a more Ethereum-esque roll of data, DeFi, tokens, stablecoins, etc. with the advent of programmability.
But the gas token is still BCH/BSV, and the investment token is still ASICs. You'd mostly buy it if you wanted it to power things you want to do. If you'd want to make money if they're successful, probably get into profitable mining.
So far, the market seems to have rejected the use case of BCH/BSV as a store of value or overall money, but they could reclaim it if gas token demand goes far enough up to cause higher gas prices.
Posted Using INLEO
Congratulations @thedessertlinux! You have completed the following achievement on the Hive blockchain And have been rewarded with New badge(s)
Your next target is to reach 3000 upvotes.
You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word
STOPCheck out our last posts: