Many conservatives and anti crypto people are wondering what exactly is the use case of cryptocurrencies and particularly those P2P coins like the godfather of all crypto, bitcoin itself. Usually the criticism is about the comparison between BTC and fiat digital payments but in my opinion they are missing the point. First and foremost, the point of crypto is not about how fast or how cost-effective it is. It’s about decentralization. It has always been about decentralization.
If you miss this point, you still don’t get crypto. The point of crypto is that no centralized entity or bank should be able to control money. The idea is that it is censorship resistant and it is dictated by demand and supply, and not by quantitative easing policies. So, the idea is actually about politics. It’s not about how fast bitcoin can transfer from point A to point B. That thing is just secondary and not exactly part of the core belief.
Surely a faster decentralized P2P coin is more desireable than a slow decentralized P2P coin, but once again this is assuming they have solved the decentralization issue. A faster but significantly more centralized coin is not desireable in a world of crypto. In fact, it’s considered a waste of time.
The Ignorance of Crypto Skeptics
I have heard how some Australian regulators throw shades at crypto and their main argument has been always about how normal digital payments using fiat can do much better things, fee-less, and instant as well. But again, this type of argument is missing the point.
Sure it’s true digital cashless payments are already faster than crypto and probably also more cost-effective for the users, but the point of crypto has been always about decentralization, first and foremost!
When you disregard the decentralization part, you basically ignore the core belief of cryptocurrencies. It’s one thing to believe crypto is not ‘fast enough’ to be used in daily life but it’s another thing to just ignore the main point of crypto itself. This is the message of bitcoin and this is why bitcoin matters.
Criticism against Bitcoin:
So, let’s talk a lot from decentralization factor once again. Many people believe that you are just being a hypocrite if you talk trash about fiat currencies and their governance system while at the same time you claim bitcoin is decentralized. Usually their argument is about how chinese mining pools control everything in bitcoin or how top 100 whales have the ability to move the market. But, as I said above, this argument miss the point.
Decentralization can be seen from different factors but the main belief about decentralization is how no one single entity can 51% attack the coin. By definition this is already very different from fiat currencies where one single entity like the central bank can easily reserve any transaction that they want.
And even if bitcoin is not as decentralized as we want it to be but it doesn’t change the fact that it is still more decentralized than your fiat currencies. The case example would be something like this. Imagine there are two football teams. One is better than the other. It does not mean the other team is bad, just that it’s not as good as the better team. It is never a black and white situation.
This logic can also be applied to crypto vs fiat. Crypto is more decentralized than fiat but it does not mean it is fully decentralized to the point that no one single entity can have too many BTCs. So, yeah, cryptocurrencies and especially bitcoin, are still much more decentralized than fiat currencies. No contest right there.
‘Bitcoin Not Fast Enough’
Other typical argument against bitcoin is the fact that it’s very slow especially when daily transaction volume gets too high like recently. However, bitcoin itself is not really seen as a P2P coin. Even with segwit and other solutions, bitcoin real valuation comes from the fact that many traders see it as a digital gold with steroid volatility.
Thus, once again, bitcoin’s greatest value comes from how people value gold and other valuable assets in the real life. But now you bring this logic to the blockchain. When enough people believe it is a good investment then the value will rise. When you have more demand than supply then the price will rise. Luckily we have more legitimization from the governments and big corporations. Even the likes of NYSE and microsoft are starting to embrace bitcoin trading.
Take a look at BAKKT if you don’t believe me. I believe cryptocurrencies, at the end of the day, will prevail. Not as a replacement to fiat, but as an alternative investment or hedge tool against the danger of financial instability.
When there are more uncertain situations around global financial stability, some whale investors will put their money from stock or USD to bitcoin. This is actually good when finally some huge investors can see why bitcoin matters. It’s never really about how fast or how cost-effective although these two things are still important.
But the biggest point has been always about decentralization and also being censorship resistant. It’s power of the people trying to tell the government that money should be owned by the people and not controlled by 4-5 people in suits.