Bitcoin losing market share: feature or bug?

in #btc7 years ago

As we know, the last month in particular has seen the crypto market cap continue to shoot higher, while Bitcoin's market cap has moved lower amid a correction; resulting in a falling share of the crypto market cap. That begs the question, is it a feature or a bug?

https://www.cnbc.com/2018/01/02/bitcoin-dominance-of-cryptocurrency-market-lowest-level-ever.html

Bitcoin was the big kid on the block as we entered 2017 with around 80%, that has dropped to less than half of that at around 37%.

Is it a problem?

An optimist will say that a rising tide lifts all boats; bitcoin still had a massive 2017 even though it lost some market share, as we know the price went up by over 10 times in 2017.

However, a pessimist would say it is a problem. If Bitcoin becomes 'just another crypto' with hundreds of cryptos, what is there to support its market cap? What's to stop it becoming just another $1b crypto?

Yes, Bitcoin moved first, Bitcoin was the pioneer and has the brand, but will that be enough?

Also, there's a potential risk to ALL cryptocurrencies if there are simply too many cryptos and money just sloshing around. After a time, people will lose confidence in any cryptos being deserving of a large market cap, if they can just lose it at the drop of a hat.

I think this is a real fear. Bitcoin threatened the corrupt financial system as it offered sound money and a viable, trust-based alternative where citizens of the world could 'opt in' to this cryptocurrency with a limited 21 million coins. If we have too many cryptos, the whole crypto project risks a loss of faith as a viable alternative. I'm worried greed may undo the hopes of libertarians in disrupting the financial system that has enslaved populations by usury and has squeezed the middle class dry. Yes, this is a warning...

The bull case:

A rising tide lifts all boats, Bitcoin may not regain its 80% share but will continue to grow with the crypto ecosystem.

The bear case:

Bitcoin loses market share, giving rise to a new leader (whether Ripple, Ethereum or other). However this undermines confidence in the whole crypto market and all cryptos fall massively. Alternatively, Bitcoin could fall from grace while the whole ecosystem continues to flourish. This is possible, but not likely in my opinion.

The bottom line

Careful what you wish for. Those treating the crypto market space as a get rich quick casino may undermine the whole project. It's important to remember what the movement was about and what gives it the best chance of success in achieving its aims.

I'm keen to hear any thoughts.

Don't shoot the messenger ;-)

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The Engima