The experimental launch of Bitcoin contributed to its dispersion among the masses
Thousands of different cryptocurrencies emerged in the years following the Bitcoin Genesis Block (BTC) in 2009. Although the latest assets feature different technologies and new frills, Bitcoin maintains its advantage in a key category, according to a report published in November by crypto data company Coin Metrics.
Due to its relatively older framework, Bitcoin is sometimes compared to older versions of other technological innovations such as internet dial-up, the report explains:
„Too often these comments are part of deliberate marketing strategies, driven by the proponents of emerging crypto assets that should succeed where Bitcoin has failed. Unfortunately, when faced with a strictly technological comparison, beginners are pushed to the sidelines, especially when discussions become extremely technical“.
Technological ability is important. Cryptocurrency, with their underlying ecosystems and blockchain, however, also act as forms of money or value in addition to the technological base. Consequently, the distribution of the asset plays a key role in the equation, the report states.
In the last decade, cryptocurrencies have occupied countless stocks, especially in 2017, when many alternative crypto assets have recorded huge gains for owners. Many people and teams have produced their own digital assets, some of them competing with Bitcoin’s value proposition.
When Bitcoin became a better known name, however, the organic growth of the assets became complicated. Once the profitability for new assets was identified, what prevented creators from assigning different amounts to certain groups, including specific friends or investors? In practice, since people now expect some kind of financial value when they launch any newly created assets, these new assets do not have a uniform distribution.
The Coin Metrics report examines the centralization detected in the cryptocurrency through the data obtained from the blockchain of these assets. „Favoritism, among other unfair supply distribution models, inevitably results in incredibly centralized monetary bases,“ explains the report.
„Through on-chain data, we can identify structures of properties that are antithetical to Bitcoin’s and quantify the degree of centralization of wealth within their digital economies.
Basically, Bitcoin was born as an experiment unlike anything else before. Very few people understood how the asset worked in the beginning. „There wasn’t even an exchange rate to push the very first users to even remotely imagine evaluating their Bitcoins,“ said Coin Metrics:
„Also because of the already mentioned technical complexity, the results of the first experiments on Bitcoin were disastrous: it is believed that an exorbitant number of BTCs were definitely lost during that period. After all, users were treating Bitcoin as it was then: a curious experiment with digital Monopoly money“.
Through graphs and examples, the report outlines Bitcoin’s initial journey, which produced a wide distribution of coins. Mining activities also influenced the dispersion of the asset. The data presented in the report, however, are strongly based on the analysis of wallet crypto addresses. Sometimes users use numerous wallets and addresses, so the accuracy of the results remains questionable.
Tone Vays, crypto analyst, trader and YouTuber, also expressed similar opinions about the decentralization of Bitcoin in the past.
Last month marked the 12th anniversary of the publication of the Bitcoin white paper.