Recent market volatility has seen Bitcoin plummet to its lowest price since the beginning of the year. Against that backdrop, what’s going on with the Bitcoiner voices?
Those loyal to Bitcoin remain optimistic about its future. In popular parlance, such as a person is referred to as a Bitcoiner. To give them their official definition, ‘a person who uses or mines the cryptocurrency bitcoin’. A Bitcoin maxi, if you will.
What a Bitcoiner Believes
A Bitcoiner is known for their devout following and determined defence of the original cryptocurrency. While many people point out Bitcoins flaws and distance from the original white paper, Bitcoiners are quick to remind people that almost 40% of all money established in the crypto market is tied up in Bitcoin.
What makes Bitcoin so special?
Often referred to as ‘sound’ or programmable money, Bitcoin has a hard cap on production, meaning there will only ever be 21 million Bitcoin mined and in circulation. Through this figure, it is easy to see how the value of Bitcoin should hold going forward.
However, this all depends on Bitcoin’s continued popularity. While it may have close to 40% market share at the moment, there is nothing to say that this may change sometime in the future. That’s something the Bitcoiner should think about.
Many of the Bitcoiner mindset champion the asset as a digital alternative to gold. As we know, gold has always offered a safe haven in times of economic uncertainty and often acts as a hedge against inflation. However, there are limitations when it comes to investing and owning real gold. First and foremost, gold is extremely heavy, making buying, selling, distribution, and storage almost impossible except for those at the top. Secondly, the fees associated with buying gold through ETFs and shares can be pretty hefty.
So what if there was a digital alternative to gold? An asset that not only proved to be a haven in difficult times, but was cheap, flexible, secure, and, most importantly of all, programmable. While experts agree that the total amount of gold to be mined is unknown, the process of prospecting for and extracting gold is controlled by a select number of companies. What if this digital equivalent to gold was accessible to all, liquid, and portable?
‘Once you begin to understand the effectiveness and efficiency of Bitcoin, the fervour of the Bitcoiners starts to become clear.’
Bitcoiner Rhetoric and Real Utility
No matter the fixed supply cap and flexibility, Bitcoin’s real value will only be maintained if people continue to believe in its utility and future worth. At the end of the day, Bitcoin was designed as an alternative payment network. While this may have given birth to an entire industry, there is no escaping the fact that Bitcoin lacks any real utility other than as a store of value. If, at any point, this use case is questioned or begins to fall in popularity, then the future of Bitcoin may become very uncertain indeed. Yeah, I went there Bitcoiner!
Bitcoin generates strong emotions. However, many people ask why does the industry have to be so polarised? Celebrating the demise of one project while championing another is hardly indicative of a mature industry.
That said, Bitcoin has an army of loyal supporters – the Bitcoiner crew – quick to extol its virtues. The focus appears to be on the global need for money to flow at the same rate as data and information. Even in today’s increasingly digital world, it is still quicker to jump onto an aeroplane with a suitcase full of money than to use the traditional rails of finance. Something has to change. Is Bitcoin the technology to do it?
Bitcoiner Tribalism
It may well prove to be the stubborn attitude of the Bitcoiner that bring them crashing back to reality. If an industry of the scale and scope of crypto is to make a mark on the world, then collaboration and support are needed across all sectors. In-fighting and tribalism will only create division and disharmony.
The popular saying ‘when the tide comes in, all boats rise’ has never been so true as it is in the case of Bitcoin. Once extensive regulations are passed and we move to the adoption and utility phase of the industry, then it is generally accepted that we will see another surge in investment. While this may be difficult to understand given current market conditions, such a rise will benefit everyone working in the space.
A Bitcoiner who is blinkered enough to believe that there is only one original and true digital asset are sure to have a rude awakening when they realise that there are other projects that can do what Bitcoin is intended to do, only cheaper, faster, and with more efficiency.
Militant attitudes
The expected development of the Web3 and digital asset space will surely attract significant investment, which could easily dwarf the investments already propping up the world’s number one digital currency. A 40% share of the market gives Bitcoin a total market cap of $321 billion at current prices (15 November 2022).
While Bitcoiner beliefs may be antagonistic, their militant attitudes may be their ultimate undoing. As time has proven more than once, any significant industry developments have usually seen a number of protagonists lead the way, and crypto is no different.
CEO of Ripple, Brad Garlinghouse, said in 2018 that he expected 99% of all crypto to evaporate through regulation or implosion in the following five years. Given recent events surrounding FTX, 3AC, and LUNA, he may not be far wrong. Going by current numbers, this would leave some 200 projects out of the 21,000 cryptocurrencies currently on the market.
This assumption, of course, aligns with the Bitcoin Maxi model of ‘everything but Bitcoin’, which suggests Garlinghouse may know more than he is letting on. However, the stance that Bitcoin is the one and only financially and technologically sound saviour is far from the mark. Like all Bitcoiner talk, it should be taken with a heavy dose of salt.
