Why Bitcoin Won’t Be Overrun
Rooted in human nature
Robert Breedlove had thought on bitcoin which often gets overlooked when it comes to bitcoin being overtaken by another asset/money.
Incredibly important to talk about especially considering bitcoin is open-source and literally anyone can copy the code and change what they don’t like and start their own bitcoin or start a new version with their own tweaks.
This has literally been tried 20,000 times and has yet to work by overtaking bitcoin in any relevant metrics.
Bitcoin is the only digital commodity on Earth. Due to path-dependence, it doesn't seem another can be created. As Satoshi said: “It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self-fulfilling prophecy.”
Robert Breedlove
Bitcoin is often referred to as a digital commodity because of its unique properties, such as scarcity and decentralized nature. It has a finite supply of 21 million coins and operates on a decentralized ledger, called the blockchain, making it different from other digital assets.
One of the key advantages of Bitcoin over other digital assets is its path-dependence. Path-dependence refers to the idea that once a system is in place and has a certain level of adoption, it becomes difficult to change or replace. In the case of Bitcoin, it has been in existence for over a decade and has a large and dedicated user base, making it difficult for another digital asset to replace it.
Satoshi Nakamoto, the pseudonym used by the creator(s) of Bitcoin, recognized the importance of path-dependence when he wrote the famous quote, “It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self-fulfilling prophecy.” He understood that if enough people adopt and believe in Bitcoin, it would become a self-fulfilling prophecy and establish itself as the dominant digital commodity.
Why is it so hard to overcome path dependence?
It can be hard to overcome path dependence because it is a phenomenon that is rooted in human behavior and social systems. Once a certain system or technology is established and has a certain level of adoption, it becomes the norm and people become accustomed to it. This creates a "status quo bias" where people are more likely to stick with the familiar option, even if a new and potentially better option becomes available.
Additionally, path dependence can be reinforced by network effects, where the value of a system or technology increases as more people adopt it. For example, the more people use a certain social media platform, the more valuable it becomes because there are more people to connect with. This creates a positive feedback loop where more adoption leads to more value, which leads to more adoption.
Furthermore, there are often significant barriers to entry for new systems or technologies, such as high costs, lack of infrastructure, and lack of understanding. These barriers can make it difficult for new options to gain a foothold in the market, even if they are superior to the existing options.
In conclusion, path dependence is hard to overcome because it is rooted in human behavior and social systems, reinforced by network effects, and often protected by barriers to entry, making it difficult for new options to gain traction. This makes it hard for new technologies, platforms or currencies to overcome the path set by Bitcoin, the first decentralized digital currency, as it has already established a network effect, user base and level of acceptance.
Stay strong,
Brandon