One of the things I find most difficult to explain to people who are new to Bitcoin, and other Cryptocurrencies, is Why Bitcoin is different than the rest. Especially when I tell them I only invest in Bitcoin and nothing else. I understand why this would seem odd, in any other investing context you would most likely invest in an entire sector you were interested in. Or maybe buy an index fund or ETF. In other words, you would diversify.
I’m going to try and explain why diversification doesn’t really make sense when it comes to cryptocurrencies. And why Bitcoin is in a league of it’s own.
Origins
Most people know that Bitcoin was the first cryptocurrency. When the Bitcoin network started up in January 2009, no bitcoins existed. Then the first block was mined and the first 50 Bitcoin were created (aka the Genesis Block). Those Bitcoin went to whoever mined them. Which at that point was almost certainly Satoshi Nakamoto (the pseudonymous creator of Bitcoin). Satoshi, even though he created the code and started the Bitcoin project didn’t give himself any. He could have just written it into the code that he gets 10% of all the Bitcoins. He didn’t do that.
That is not the case with other cryptocurrencies, Ethereum for example. When Ethereum started up it’s network it allotted 70% of the ether to themselves. And basically every cryptocurrency project since then has done the same.
I believe this puts Bitcoin in class of its own. The fairness in how it was distributed will likely never be re-created. At the time, nobody thought they were going to get rich so they simply created Bitcoin as the best possible solution to a problem. Some even call it “The Immaculate Conception”.
Simplicity
While Bitcoin is complicated for sure. It’s design is relatively simple. It has resisted adding complexity over the years in order to make it resilient. When someone tries to compare another cryptocurrency to Bitcoin they usually say it’s faster, cheaper, does more etc. But, there’s a reason Bitcoin doesn’t try and do everything. It’s simplicity is a strength.
Similar to the beginning of the internet, there were many attempts to make better protocols than TCP/IP (internet), or HTTP (websites), or SMTP (email) but to this day those original simple protocols have been the basis of everything we do online. They are as simple as possible, they are robust, and if you want more features you can build on top of them.
Bitcoin’s simplicity has allowed it to run for close to 15 years, and spread across the world. That’s not true of any other cryptocurrency. It aims to be the Internet of Money.
Security
Becuase of Bitcoin’s pure origins, and it’s simple design, it can be run and used on cheap computers with bad internet anywhere in the world. This means Bitcoin has spread farther and wider than any other cryptocurrency could. It also means it is more resistent to change and manipulation (by far) than any other cryptocurrecy. Many others, Ethereum as an example, is so complicated that normal users can’t run the software. It requires specialized hardware and expertise to do it. This opens it up to manipulation, there are many fewer computers you would have to shut down if you wanted to stop it.
Also, using proof-of-work in Bitcoin mining (learn more about that Hashing - The Key to Understanding Bitcoin Mining) means it would require a massive amount of computing power to ever change the ledger. More computing power than all the supercomputers in the world combined. As opposed to Ethereum which uses proof-of-stake, which instead of computing power for competing in mining, uses the number of coins you have. The more coins you have, the more likely you are to win the next block. Remember the 70% they gave to themselves?
Leadership
The creator of Bitcoin is Satoshi Nakamoto an unknown person or people who has since disappeared. This means that if a government somewhere wants to make Bitcoin illegal, there is nobody to put in jail. There is also nobody to coerce into changing Bitcoin for their own gain.
In every other case since Bitcoin, the creator is a known person, usually a company, that can be manipulated into changing the system. Or be forced to manipulate others into changing it.
The best thing Satoshi ever did for Bitcoin was to let others pick up the work, and disappear.
Conclusion
From the very beginning Bitcoin has been a breed of its own. Many since then have tried to make some financial gain from comparing themselves to Bitcoin. But, just like there is only one internet, I believe there will be only one Bitcoin.