Category Design News: The Inventor of Bitcoin Created a New and Different Category of Money and Will Always Be the Category King.
Bitcoin is a new category of value, but invisible.
by Gifford Watkins, CTO at CDPI, Inc
"Value" is a category. It's products are physical. Gold, land, art, paper is physical, all made out of matter and you have to put it somewhere, guard it, bank it, owning stuff is a problem.
The person who creates a new category solves all the problems within an existing category and a new product is born. The new category product starts to take away market share from the out-dated category product until the old product is obsolete.
As the new category product moves from early adopter, to everyone now uses it, it becomes a household name, the new category will dominate the new category market cap at around 70-80% for the lifespan of the category.
For Instance:
Music Category: The vinyl record destroyed the Victrola, the cassette destroyed the record, the CD destroyed the cassette tape, the MP3 player destroyed the CD player, and the smart phone now dominates the category of "Listening to music".
The car replaced the horse.
Money Category: I'm not going to go through the history of humanity describing different forms of value exchange, because they are all the same category... Bitcoin is a new category because it doesn't exist in the physical world.
Why Bitcoin is the Only Cryptocurrency That Matters
Bitcoin is the most important and foundational cryptocurrency, and for several key reasons, it continues to dominate the crypto space despite the rise of thousands of alternative digital currencies. Here’s why Bitcoin remains unmatched and why it’s the only cryptocurrency that matters:
First-Mover Advantage and Proven Track Record: Bitcoin was the first cryptocurrency, launched in 2009 by the pseudonymous creator, Satoshi Nakamoto. It pioneered the blockchain technology that underpins all modern cryptocurrencies. Being the first and longest-running cryptocurrency has allowed Bitcoin to prove itself over time, establishing trust and reliability within the crypto ecosystem.
Decentralization and Security: Bitcoin is the most decentralized of all cryptocurrencies, with a vast network of nodes and miners spread across the globe. This level of decentralization makes it incredibly secure and resistant to censorship or manipulation by any single government or organization. Unlike many other cryptocurrencies, Bitcoin’s governance and development are distributed, avoiding central points of failure.
Sound Money Principles and Scarcity: Bitcoin was designed as "digital gold." Its supply is hard-capped at 21 million coins, creating scarcity similar to precious metals, making it a deflationary asset over time. This fixed supply and the predictable issuance rate (halving events) ensure that Bitcoin cannot suffer from inflation like fiat currencies or have its supply manipulated by any central authority.
Store of Value and Digital Gold: Bitcoin is increasingly seen as a reliable store of value. Investors view it as a hedge against inflation, economic instability, and devaluing fiat currencies. With institutional investors, corporations, and even countries like El Salvador adopting Bitcoin as a reserve asset, it’s solidifying its position as digital gold. No other cryptocurrency comes close in terms of market perception or value retention.
Network Effects and Adoption: Bitcoin has the largest and most widespread adoption. It benefits from massive network effects, as more users, businesses, and institutions adopt and integrate Bitcoin into their systems. Its robust infrastructure, including exchanges, wallets, and payment processors, ensures global liquidity, making it the most usable and accessible cryptocurrency in the world.
Immutability and Trust: Bitcoin’s blockchain is the most secure and immutable ledger in the world. It has never been successfully compromised, and its transactions cannot be reversed or altered once confirmed. This high level of trust and integrity gives Bitcoin an unparalleled advantage in both the crypto space and the broader financial world.
Bitcoin as a Base Layer: Bitcoin is evolving into a foundational protocol for future financial innovation. With the development of layer-2 technologies like the Lightning Network, which enables faster and cheaper transactions, Bitcoin is becoming scalable for daily use while preserving its role as the most secure base layer for value transfer.
While other cryptocurrencies may offer different features or experiment with new technologies, none can rival Bitcoin’s combination of security, decentralization, trust, and real-world adoption. As the original cryptocurrency and the cornerstone of the digital financial revolution, Bitcoin’s position as the only truly essential cryptocurrency remains unchallenged.
Michael Saylor on TCN