The Ultimate Bitcoin (BTC) Review – Best Cryptocurrency to Buy In 2019?


In this video, we’re going to take a look
at Bitcoin. BTC. The grandaddy of all the cryptocurrencies. And we’re going to analyze
it across 9 different metrics, so that you can understand why it exists, how it’s positioned
in the market, and then ultimately decide for yourself if it’s something you should
invest in. Comin’ up! Hey, what’s up, it’s Jon from Cheddur, the
social network of crypto. And on this channel we do a lot of tips and strategy videos, as
well as cryptocurrency reviews just like this one. So if you’re new here, consider subscribing.
And at any point during the video, go ahead and check the YouTube description down below
in the show notes section, because we’re going to cover a wide range of topics about Bitcoin,
so all of the links and information that you’ll need is going to be right down there. And quick disclaimer, I am not a financial
advisor. This is not financial advice. This is just my own thoughts and opinions about
Bitcoin, and I encourage you to come to your own conclusions before making any investment
related decisions. So without further ado, let’s hop right into the video. So lets talk about market size. You know,
what market is Bitcoin serving, and how big is that market. Bitcoin was invented in 2008
by Satoshi Nakamoto, and this person (or group of people) had the intention of Bitcoin becoming
this electronic peer-to-peer cash system for the world. Kind of like a PayPal or a Venmo,
but obviously no company in the middle. And while Bitcoin looks poised to achieve
that vision in the long-run, many in the industry today, including myself, would argue that
Bitcoin is actually serving a much different market — a much different use-case — today.
And this is because Bitcoin’s price is so volatile in the short-term that it makes it
extremely difficult to use it as a medium of an exchange. A currency that you can buy
bread with at the grocery store. And what we’ve seen over the last few years is that
Bitcoin is functioning a lot more as a store of value — a long-term investment — “Digital
Gold” if you will. And the good news it that even if Bitcoin never manages to break out
of this “Digital Gold” kind of use-case into the broader electronic cash market, the Digital
Gold market alone is humongous. The entire gold market is valued at about
$7.5T USD. And Bitcoin — the entire network — is only valued at about $65B, which is
over 100 times less. And just like the Internet disrupted publishing, and Amazon is disrupting
Walmart, I think Bitcoin is going to disrupt banks, all other forms of fiat currency, and
stores of value like gold. And even if Bitcoin only manages to capture 5% of the overall
gold market, then according to Tom Lee from Fundstrat (I’ll include a link down below),
that would put a price tag of about $50K USD per Bitcoin. So for market size, I give Bitcoin 5 out
of 5 stars because literally, the sky is the limit compared to the current levels that
Bitcoin is trading at today. Now, let’s talk about the supply and demand
economics behind Bitcoin. And unlike the fiat currencies that we’re used to using today
which have inflation built into them and lose purchasing power over time, Bitcoin is based
on a monetary policy that’s a lot more like precious metals like gold. There’s only a
fixed amount of gold on Earth’s surface and you can’t create gold through a chemical reaction
and create counterfeits. And similarly, with Bitcoin, it has a maximum supply of 21M bitcoins
and you can’t counterfeit bitcoins to create more. 21 million — that’s it! And today, there’s about 17.5M bitcoins in
active circulation. And similar to the way that gold enters circulation through the process
of physical mining, with Bitcoin, bitcoins enter circulation through a similar process
called digital mining. And I won’t go through all of the specifics of how that works in
this video, but you can basically think of it like here we have a bowl. And in this bowl
there’s the 17.5M bitcoins that have already been mined. And we have a faucet draining
into this bowl. And those represent the new bitcoins that are being mined and entering
circulation. And over time, this faucet is slowly being turned off until ultimately,
there’s a slow drip, and then it’s completely off. And we’re going to reach that point in
about 120 years from now, where there’s going to be no more bitcoins created, and what we
have left in this bowl is our maximum supply of Bitcoin — 21 million. Now to put this 21 million number into perspective,
there’s about 11 trillion US dollars out there in circulation today. That’s 500,000 times
the maximum supply of Bitcoin. And the craziest part is that the US dollar is just one currency
for one country, and Bitcoin is a GLOBAL currency for all countries. So you can just start to
think how rare and how scarce Bitcoins really are. Now, let’s take a look at the demand
side of things. Because true scarcity is only created when your limited supply is coupled
with increasing demand. And the cool thing about cryptocurrencies like Bitcoin is that
you can actually measure demand and adoption on the blockchain. And my favorite way to
do that is by looking at the number of wallets that are being created on the Bitcoin network.
Because at the end of the day, if you’re doing ANYTHING on Bitcoin, you need a wallet. Blockchain.info, one of the top hosted wallet
solutions out there on the market, publishes their user account stats. If we head over
to their site and check out their wallet growth, you see what every startup investor loves
to see. That exponential, hockey-stick growth pattern. And since Bitcoin’s inception in
2009, every year more Bitcoin wallets have been opened than the year before it, even
in 2018 with the price crash that we just went through. So if you hear someone saying “Bitcoin is
dead, it’s never coming back”, just point them to that chart and maybe they’ll reconsider,
and I’ll include a link down below so you can go ahead and check it out. Now, through an economics lens of supply and
demand like we just talked about, again, I have to give Bitcoin 5 out of 5 stars. Now, let’s talk about decentralization. And
by decentralization, I’m referring to the extent to which Bitcoin isn’t owned or controlled
by any single person or entity. And decentralization isn’t a switch. It’s not on and off. It’s
not black and white. It’s a scale. And on one end of the spectrum, we have currencies
like EOS, for example, which are incredibly scalable and super fast. But they are not
as decentralized. There’s only 21 block producers, for example, on the EOS network. Now, on the other end of the spectrum, you
have currencies like Bitcoin and Ethereum, which definitely aren’t as scalable and honestly
are pretty slow (and we’ll talk about that in a bit), but they make up for it in leaps
and bounds because they are SO decentralized. As of February 2019, Bitcoin is THE most decentralized
and secure blockchain system on the planet. So right now, 50 million terahashes of power
is being used to secure the Bitcoin network every second. So, try to wrap your mind around
this, but that’s 1 trillion CPU cycles of computational power, 50 million times, EVERY
second. Being on the extreme end of decentralization
is what enables Bitcoin to function as a store of value and that electronic peer-to-peer
cash system that we talked about. So for decentralization, again, I give Bitcoin 5 out of 5 stars. Now, let’s talk about team. And Bitcoin is
an open-source project, meaning that anyone can contribute code to it if you have the
technical chops. And if you look at GitHub where the source code is maintained, we can
actually see that over 600 developers from around the globe have contributed code to
the Bitcoin protocol. And in addition to having naturally attracted this talent, there’s actually
about a dozen or so part-time and full-time developers that are working on Bitcoin around
the clock to improve it, including rockstar developers like Gregory Maxwell and Luke Dashjr.
And just look at these guys. They’re smart. And if you’re wondering how they are getting
paid, because there’s no Bitcoin company, right? Well, the way it works is that in the
crypto ecosystem, a lot of the for-profit ventures like Coinbase, Blockstream, and MIT’s
Digital Currency Initiative cut the checks to these developers because the success of
these businesses depends on the success of Bitcoin. So they want to make sure that it’s
in good hands, that it’s evolving, and being improved every day. And for these reasons
— because Bitcoin has naturally attracted a giant pool of developers, because there
are part-time and full-time rockstar developers working on it around the clock 24/7 improving
it every day — I also give Bitcoin’s team a 5 out of 5 stars. And that brings me straight to point number
5 which is scalability. And we mentioned this in the decentralization topic where Bitcoin,
because it is so much more decentralized than a lot of the currencies out there, it sacrifices
quite a bit on scalability, transactions per second, and speed. I’ll tell you a story.
In December of 2017 when the crypto markets were in peak mania and Bitcoin was at $15
thousand dollars, on Christmas day I sent a gift of Bitcoin to a family member. It was
$60 worth. And I had to pay a $30 fee to have that transaction go through on Christmas day.
Because the way it works is the Bitcoin blockchain can only process 7 transactions per second.
And that’s a tough sell for Bitcoin becoming this global peer-to-peer cash system with
thousands of people transaction on it at the same time. Because what happens is that when
Bitcoin gets popular today, the network gets congested, a backlog of transactions will
form (because it can only churn 7 per second), and the only way to get your transaction through
in a timely manner is to pay a giant 50% fee. But this is where that team metric that we
just talked about really comes into play. The Bitcoin core developers have created a
pretty novel solution to this problem and they’ve dubbed it the Lightning Network. I’m
not going to go into too much detail about what it is in this video, but generally you
can think of it as this second layer that lives on top of the original Bitcoin blockchain,
and it can take 95% or so of the load off of the underlying blockchain. And what the Lightning Network does is it
groups transactions together and then sends them down in bulk, a lot less frequently,
to the underlying blockchain. This can theoretically enable Bitcoin to scale to Visa and Mastercard
levels. The initial set of Lightning nodes are still
just coming online, so the Lightning Network is still very experimental. It’s early days.
So if today, Bitcoin were to get really popular, we’d still have all of those scalability issues
that we’ve seen in 2017 and even before that. So for that reason, I can only give Bitcoin
3 out of 5 stars when it comes to scalability, but just keep in mind that on a few year basis,
there is a clear path to turning that into a 5 out of 5 star rating. Now, let’s talk about community. Your currency
can have the best tech in the world, but at the end of the day, if nobody is excited about
it, nobody is building stuff on top of it, and and if no one uses it, then it’s pretty
worthless. And in my opinion, Bitcoin seems to have one of the strongest communities out
there between the developer pool and talent it has attracted, the giant miner network
that runs the Bitcoin software and secures the network, perhaps people like you and I
who use Bitcoin, and this giant entrepreneurial ecocsystem that’s built around the Bitcoin
protocol from huge unicorn companies like Coinbase, to smaller startups like Cheddur
that are building wallets and information portals. Now, the Bitcoin community is SO passionate
and opinionated about Bitcoin that sometimes it can work to its detriment. We’ve seen this
with the scalability debates. Is the Lightning Network the best way to scale Bitcoin, or
should we update the block size from 1 MB to 2MB. There are a lot of opinions out there,
and unfortunately there is no true leadership among the Bitcoin community because Satoshi
Nakamoto left the project pretty early on. It’s up to the community to come to a consensus
on its own and what we’ve seen happens quite frequently, is that factions will form within
the Bitcoin community and eventually they will split off and build their own version
of Bitcoin. We’ve seen this happen with Bitcoin Cash (BCH) for example, which split off in
August of 2017. To be fair, this could just be normal growing
pains of any decentralized community. But what I’ve seen with other projects, like Ethereum
for example, where the founding team is still there, is that there seems to be a voice of
wisdom within the community that people can rally around. These communities seem to be
a little more tighter nit and aligned with the end vision, so for that reason I can only
give Bitcoin 4 out of 5 stars when it comes to community because at the end of the day,
sometimes it takes YEARS to roll out meaningful changes. Now let’s talk about competition because there’s
definitely no shortage of currencies out there that are trying to be the “next Bitcoin”.
How does Bitcoin differentiate itself from those currencies in the electronic cash and
store of value markets? My take on this is that being first to market
matters A LOT in cryptocurrency. Bitcoin has been in production since 2009, which is years
ahead of a lot of the competitors out there. As a result, Bitcoin is the most decentralized,
the most secure, has the largest community, and has the most momentum. Another way to think about momentum is through
what is called a “Network Effect”. Think of it like this. Bitcoin is a snowball that’s
rolling down a hill and it’s gaining size and speed a lot faster than all of the new
snowballs that are just starting to drop at the top of the hill. And even if Bitcoin doesn’t
have the scalability of EOS and the fast transactions on Litecoin and the privacy features of Monero,
you still have to respect the fact that Bitcoin is code and it can evolve and it can adopt
those features over time. The way I tend to think of currencies like
Litecoin and Zcash and Monero is more like a lab experiment, where these currencies are
trying out new features and functions, and the market will decide what is valuable and
what is not. The currencies that find a place in the market and prove out a valuable feature,
at the end of the day, that code can get plucked out of the experiment and put into the live
test unit. And that’s kind of how I think about it — it’s like a clinical trial. We’re seeing this play out right now with
the Lightning Network. There used to be an argument made that this currency and that
currency — the differentiating factors are that they are faster and transactions are
cheaper. But with the Lightning Network, those arguments are holding a lot less weight because
those features will be coming to Bitcoin, so what is your differentiation then? I think
you really have to respect Bitcoin’s network effect and its ability to evolve and improve
over time, and for that reason I think Bitcoin is the king of the currency and store of value
markets, I think it’s here to stay, and for that reason, I think that Bitcoin deserves
a 5 out of 5 stars when it comes to the competitive landscape. Now let’s talk about the initial launch of
Bitcoin, because a lot of the cryptocurrencies that are coming out today, if not most of
them, have these giant pre-mines, which is basically allocating a portion of the supply
of coins to the founding team. I have seen pre-mines going as high as 70-80% and currencies
that have these huge pre-mines which you’ll see a lot in the ICO / Initial Coin Offering
market, are an immediate show-stopper for me. Having said that, I would give Bitcoin a 10
out of 5 stars if I could on this metric because the way that Bitcoin was brought into existence
was THE most fair, altruistic launch that I’ve seen yet in cryptocurrency. Basically
the way it went down is that on Jan 3 2009, Satoshi Nakamoto (he, she, or they), flipped
the Bitcoin switch on, let the world know that this thing existed, and from that point
forward, everyone on this planet has had an equal opportunity to earn and participate
in the Bitcoin network just as much as Satoshi did himself / herself / themselves. Satoshi retained absolutely no special privileges,
rights, pre-mined coins, none of that. And for that reason, I believe Bitcoin was one
of the most, if not THE most altruistic and honest launches of a cryptocurrency that we’ve
ever had, and for that reason, I give Bitcoin 5 out of 5 stars when it comes to the initial
launch. Now let’s talk about the Bitcoin brand itself
— the name, the logo, brand awareness, all of that stuff. I did quite a bit of user experience
testing around this this past summer while I was out in Michigan working on Cheddur at
the Desai startup accelerator. And there weren’t too many crypto savvy people out there, but
pretty much everyone that I talked to could at least recognize the name Bitcoin and put
2 and 2 together to equate it with cryptocurrency. And for a decentralized protocol with no CEO
and with no marketing budget, that level of brand awareness is huge. I think the brand elements are on-point. Bitcoin
the name is two syllables, it’s easy to remember, it sticks in your head. The colors — the
orange and the gold — remind me of digital gold, the current market that it serves. And
the B with the 2 strokes through it remind me of traditional currencies, things that
you use to buy bread at the grocery store, which is the market that it’s seeking to serve. The only real risk or downside that I see
with the Bitcoin brand is through dilution through all of the other projects that are
calling themselves “Bitcoin.” For example, there’s Bitcoin Cash, Bitcoin Gold, Bitcoin
Diamond, the list goes on and on. I’ll put a link down below so you can see just how
many of these projects there are. From the perspective of my friends and family who are
asking me “On Coinbase, what’s the difference between Bitcoin and Bitcoin Cash? Are they
the same thing? Which one do I buy?” Well, no, they’re very different and there’s a lot
of brand confusion there. So for that reason, I’m going to give Bitcoin a 4.5 out of 5 stars
because it’s unclear to me how that’s really going to work out. There’s no Bitcoin CEO
or company that can enforce a trademark dispute against any of the other projects, so we’re
just going to have to wait and see how this plays out. So there you have it. We talked about Bitcoin’s
5 star market size, the 5 star supply and demand economics, the 5 star decentralization
and security, the 5 star team, 3 star scalability, 4 star community, 5 star competitive landscape,
5 star network launch, and 4.5 star brand. And when we average that all out, we arrive
at an overall rating of 4.61, which in my book, is a long-term HODL. So I’ll go ahead
and post this very review in text format over on Cheddur, the social network of crypto and
I’ll link that up in the YouTube description down below so you can go ahead and check it
out. Question of the day: What do YOU think about
Bitcoin, and what rating would YOU give it? You can post your own review on Cheddur, the
social network of crypto, let me know in the comments section down below, and I’ll see
you in the next one.

One thought on “The Ultimate Bitcoin (BTC) Review – Best Cryptocurrency to Buy In 2019?”

  1. QOTD! What do you think about Bitcoin and what rating would you give it? 🤔 Post your review on Cheddur and link to it here in the comments!

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