I have a strong feeling that this is the last time we see Bitcoin’s dominance level above 66%. From this point on it will fall, probably resulting in Bitcoin losing its first place within the next 5 years (long thread, 1/20) 
There were lots of copycat altcoins in the beginning (Litecoin, Namecoin, Primecoin), but they’ve never been the true competitors to Bitcoin as they didn’t really have any new features people needed. (2/20)
But over the years the mantra has always been “if there are any really cool features they’d be incorporated into Bitcoin”. That didn’t turn out to be true. (3/20)
Smart contracts? Nope. That moved to Ethereum along with brilliant minds. Remember @VitalikButerin saying that he initially wanted to build on top of Bitcoin? (4/20)
Privacy features? Nope. That’s now for the Monero-Dash-Zcash trio. The congested state of the Bitcoin blockchain allows multiple chain analysis companies’ long noses to sniff on user activity more effectively. (5/20)
Also PoS. IMO, PoW has been proved flawed when the miners hadn’t been able to push for on-chain scaling. Why didn’t they do it? PoW has a fundamental flaw — miners aren’t interested in price increases, while they fear sharp declines (a separate thread on that a bit later). (6/20)
Now, where does Bitcoin stand today? It’s been 5 (five!) years since the scaling debate has started (an eternity!). And instead of having another round of the debate, we can now draw some conclusions on what happens if there’s no on-chain scaling. (7/20)
Lightning is a total vapourware coupled with “we need Watchtowers”-like technobabble. Lots of fundamental flaws, no actual real-world usage. Liquid is a KYC’ed swamp not even worth discussing. That’s it. No other scaling solutions have been presented by Core developers. (8/20)
In the meantime each time there’s some elevated on-chain activity, mempool hits 100k transactions, and fees skyrocket to $50. That creates the most terrible UX possible. People lose money. Businesses lose potential customers. (9/20)
But people still buy Bitcoin. Why? Because it has this first-mover advantage, and when someone wants to “buy crypto” they’d probably buy Bitcoin. But the harsh reality for those who go all-in Bitcoin is that it’s not about the first-mover advantage. (10/20)
Most people don’t want to buy Bitcoin, they want to buy crypto that would solve some of their personal problems. So people buy Bitcoin when they want to buy crypto because of Bitcoin being #1 by market cap. (11/20)
I believe it’s plausible to say that almost everyone in progressive countries already knows about Bitcoin. We can hear Bitcoin’s price on the radio, it’s printed in newspapers, it’s on TV, it’s already everywhere (like the oil price). (12/20)
That leads to my first point about Bitcoin being unable to rise above 66% in the dominance level any longer. There will be no influx of new businesses and users unless there’s scaling. And, unfortunately for Bitcoin, it doesn’t seem there will be any scaling. (13/20)
People know about Bitcoin, but they don’t know how they can use it besides hodling as a hedge against the money printer. And now comes the problem — just two months ago the printer went totally brrrr — and nothing happened. No millions of new Bitcoin users. (14/20)
Another problem from the investment point of view is that Bitcoin just had its major event — the halving — and the next one is coming in 4 years. Just another eternity. Over the previous 4 years Bitcoin’s dominance fell from 99% to 66%. (15/20)
If Bitcoin further stagnates while other cryptos flourish, the dominance will continue to drop. And now comes the biggest potential disaster for Bitcoin. Imagine, PoS on Ethereum is finally ready and everyone will rush to buy 32 ETH to stake (quite a probable scenario). (16/20)
In order to overthrow Bitcoin, Ethereum needs to grow just 6x compared to Bitcoin. Not at all an impossible scenario (we’re in crypto, remember?). What happens if Ethereum switches to PoS, scales, and becomes #1? (17/20)
General media will start talking about Ethereum, they will report Ethereum price instead of Bitcoin. Bitcoin will instantly become fool’s gold taking its place near Litecoin and Dogecoin. A historical relic like ARPANET, Myspace, or AltaVista. (18/20)
That being said, it shouldn’t be necessary Ethereum. My general point here is that Bitcoin’s development stagnation leads to the emergence of great competing products. (19/20)
I think the year 2020 gives the last chance for Bitcoin to properly scale on-chain to be able to adopt new users. Otherwise it will get eaten by competitors. (20/20)
@threadreaderapp unroll
