This is a guest post written by Eric who is a hands on investor in his new launch. Emphasis is that none of the below is related to our opinions (all written by Eric) thanks!
Is Bitcoin the Next Myspace?
Unless you’ve been living under a rock, you’ve heard about Bitcoin. As the first cryptocurrency to truly scratch the surface of “going mainstream,” Bitcoin gained household recognition and entered most people’s minds at some point. Unfortunately, there’s a problem: Bitcoin’s adoption has stalled, and the barrier to its continued growth appears too tough to crack.
This isn’t necessarily about Bitcoin’s value as an investment – being treated like “digital gold” is fine for a cryptocurrency that is seen as a way of getting rich – but more about Bitcoin’s use as an actual currency. To better understand this, let’s outline what has caused Bitcoin adoption to slow to a crawl.
1. Regulatory Nightmares
Is Bitcoin a commodity or is it a currency? Answering this question is crucial for lawmakers to know how to treat it. Right now, Bitcoin seems to occupy this weird middle ground – able to be used to make purchases, but often treated as a store-of-value. This isn’t making the IRS and other tax agencies very happy, which has led them to send out threatening letters to anyone who didn’t declare their Bitcoin holdings on their taxes. As long as regulations are a mess, Bitcoin’s growth won’t move much; if you want institutional investors to get on board, you need to make this less murky.
2. Ridiculous Fees/Transaction Times
The Lightning Network attempted to speed things up and lower costs, but it’s not doing a good enough job. As long as users are still being charged to send Bitcoin, why even bother? Visa doesn’t charge much, and at least fiat money doesn’t require awkward conversions. And don’t even get started talking about how long it can take just to send a transaction – there’s nothing exciting about waiting for your block to process. If Bitcoin wants to be seen as a usable currency the wait times for transactions, and the associated costs, need to plummet significantly. Unfortunately, that looks unlikely to happen, due to our third point.
3. Fragmented Community
What’s the difference between Bitcoin, Bitcoin Gold, Bitcoin Cash, Bitcoin SV, and countless other forks? Which is the “real” Bitcoin? These are questions that people have, and the answers vary depending on who you ask. This chaos is hurting Bitcoin’s ability to solve problems and become better; every time fixes are proposed to enhance Bitcoin’s performance, there’s a risk that it will just create another fork and further fragment the community. Bitcoin is decentralized in the worst way – competing factions, unstable forks, and misinformation all around.
All of this threatens to make Bitcoin a thing of the past – replaced by a faster, more usable, widely adopted cryptocurrency. Much like Myspace was replaced by Facebook, it looks like Facebook’s Libra “cryptocurrency” is trying to do the same to Bitcoin. If you’re someone who believes in cryptocurrency and what it represents, Libra is your worst nightmare.
Libra is a play by Facebook to directly compete with the US Dollar in the most undemocratic way possible – no voting, no elections, just a bunch of big Silicon Valley organizations making decisions and “promising” to do what’s right. Facebook has already proven that they can’t be trusted with your data, but now they want you to trust them with your finances, too. The overall goal of Libra is to break the knees of cryptocurrency; decentralized coins would be destroyed or absorbed by a centralized, shady, and corrupt corporate version of cryptocurrency. Facebook has already done this to countless tech startups, and now they’re gearing up to treat cryptocurrency projects the same way.
Fortunately, one cryptocurrency start-up has a head start on Libra. Metal Pay is the first ever all-in-one digital banking platform for cryptocurrency – exactly what Libra wants to be but could never become. In fact, Facebook originally invited Metal Pay’s CEO to come speak to them about cryptocurrency, and subsequently tried to imitate exactly what Metal has done. Unfortunately for them, they just can’t figure out how to do it, and they’ve run out of time to squash Metal.
Metal Pay already has a working app, a thriving marketplace, and a loyal userbase. This is the first real competitor to Libra, and represents what cryptocurrency was destined to become – easily accessible, highly usable, and truly decentralized.
Bitcoin is flawed in the way that the Ford Model T was flawed – good for its time, but not the future of its industry. The concept of the car was constantly built on and improved, it could never remain stuck in the past. Likewise, Bitcoin has been built on and improved; lessons were learned, mistakes were corrected, and changes were made. Metal is the logical evolution of cryptocurrency: leaner, faster, and more accessible.
Like Myspace, Bitcoin is being replaced. But this time Facebook doesn’t get to be the one to do it – they missed their shot.
Wow, surprised to see the MetalPay reference!
Some associates of mine got to meet/hang with the team when they sponsored Branson’s Necker Cup.
They only had good things to say about the team, so interested in seeing how they fare over the next few years.
So we’re in the clear we don’t know much about it just getting the word out since we know Eric is on the project and is a very bright guy!
“Regulatory Nightmares”: MTL has the exact same problem BTC does, and you didn’t address how MTL will solve it. That’s because no regulator knows how to treat this stuff yet. You can’t pretend MTL has some magic answer in the future.
“Ridiculous fees/transaction times”: “Visa doesn’t charge much” is straight ignorance. Visa and the processor charge ~3% per transaction. There was a BTC move worth $400mm USD the other month and the fee was pennies. Visa and the processor would’ve charged $12mm USD for that transaction. BTC charged pocket lint.
Lightning network is to BTC what credit/debit cards are to USD: a means of transport. Lightning is instant and still far cheaper than 3% per transaction. Let’s say MTL is cheaper and faster than Lightning. We’d still be talking milliseconds and pennies.
“Fragmented community”: Doesn’t exist. There’s BTC and then there’s scams calling themselves BTC to prey on the ignorant. How would MTL stop scam coins from calling themselves Metal Cash? They can’t. Again, you’re pretending that MTL has some magical answer. For example, DOGE is just BTC code copied, pasted, and renamed. What stops someone from copy and pasting MTL and calling it MCC (Metal Cash)? Literally nothing.
So of your three points, MTL has the same issues as BTC with no solution in sight, and the other point reveals your ignorance of basic fee structure of our current financial system.
BTC does billions of dollars in transactions daily. MTL doesn’t. BTC has worldwide recognition and adoption. MTL doesn’t. You haven’t given a single reason why MTL would or even should win over BTC. Both are cheap and fast. But only BTC has a huge user base. Plus, you conveniently forget that BTC is constantly getting upgraded as well. It’s not some stagnant system, it’s code that’s being improved all the time.
Oh, and:
“Libra is a play by Facebook to directly compete with the US Dollar in the most undemocratic way possible – no voting, no elections, just a bunch of big Silicon Valley organizations”
MTL is a play by Metal Pay’s CEO to directly compete with the US Dollar…. Do you see the problem here? MTL is just like the Libra. But, do you know what isn’t? BTC. It doesn’t have a CEO.
Hi John,
Great response. Thank you for taking the time to provide such an excellent post.
Metal Pay? What, who, where? Eric’s Post was weak and addressed zero. Seems like another “magic coin” trying to jump in the crypto water take advantage of the naive and ignorant.
1. Not sure if your argument against Bitcoin holds, since it is just a protocol, just as HTTP is a protocol.
That way, just as people don’t need to go to a bash terminal and write their own GET to access this page and read this post – instead, internet browsers were created, simplifying the UI for the average user – Bitcoin will likewise rely on some app with some kind of abstraction over the blockchain.
That’s not the only issue though. Today, if you could use Bitcoin to pay for you breakfast would you do it? I don’t think so. And the reason is simple: if I paid $10 worth of bitcoin at 9 am maybe by next week BTC’s value shot up 25% (and so on), then it seems using BTC as currency is a great oportunity cost. Instead everyone is using it as a store of value. The main issue is BTC is not widespread enough; hence, people are using it as a store of value.
What could to make it more widespread? Well, for many people the problem BTC solves simply does not exist. I live in South America, and even though my currency has a 7% anual inflation, it is not enough for most people to care to learn what BTC is, how it works, etc, and make the jump. Compare this with the volume of BTC traded on Venezuela, where inflation is much higher, and thus, there’s a clear use case for BTC: storing the value of people’s work.
You are certainly smarter than me, and most likely knows this. I don’t know why you are disregarding this fact.
2. From it seems you are doing just that (although I can’t confirm it, as I don’t live in the US). If so, it doesn’t seem like you’re replacing Bitcoin, but just providing a layer of abstraction over it.
This post is a straight sales pitch for someone’s brand new shitcoin, written at the level of a recent college graduate with zero experience who is targeting technologically illiterate baby boomer investors. It is an insult to the intelligence of anyone with more than superficial knowledge of the crypto space, as the poster above me has demonstrated. I do hope that you have a higher opinion on your audience, WSP, and that this is an honest mistake and a favor to a friend. Please don’t do this any more — it contaminates the outstanding information presented in your other posts.
You’re free to have different opinions but we stated up front it is a guest post and not written by us.
100% agreed. I am a veteran in the crypto space, aware of BTC before 99.9% of people owning it today. I owned enough to retire and was part of the cryptocurrency scene back in the 1980s, with Digicash making the rounds in the cryptography world (Digicash was the predecessor to BTC but different protocol, usage, technology, expansion potential etc).
Usually, WSPs, your material is excellent.
I don’t know who Erik is or what he does. Let me, however, tell you how this post sounds to an industry veteran.
“Hi, I’m a pretty smart and ambitious 22-year old who’s interested in revolutionizing the world. I have an excessively inflated opinion of my own abilities and ability to discern distinctions between modern crypto platforms but I’m pretty sure even a wikipedia-tier “differences” summary will convince you tech-averse cretins”.
Metal Pay solves none of the challenges BTC faces. Even the technology is less robust, more vulnerable to corruption, and while end user feasibility may be better, the infrastructure for that has not been set up and the project will be squashed by better alternatives long before it has a chance to breathe.
Also, anyone with any understanding of how the world actually works will know that products don’t become popular or defaults because of “excellence” or “competitive advantage”. The world is run by an elite group of sociopaths hellbent on exercising control, and they control not only most central banks but also the mass media. If they decide Libra will become the standard, it will. If they decide to fetter BTC by appropriating the protocol, stirring up discord via forks, or hampering mining facilities, they will.
Anyone who fantasizes about “escaping the system” with a shit-tier altcoin, and that too one with a centralized C-Suite team, is an idiot.
Erik, I mean this in the best way-you may have been intelligent or fortunate enough to invest in BTC and ride the gains, but your arguments here appear absolutely retarded to someone with industry knowledge, let alone a PhD in Artificial Intelligence like myself. I admire your initiative but I have to be blunt because I don’t have time to coddle.
Best wishes
Liam
Liam that was an amazing post. Drop the mic and walk off. Maybe WSP should have you write a piece on the future if crypto and places to look? Than this obvious sales pitch looking to hook idiots.
Thank you Liam for “not” coddling or pussy footing it around and calling it as you see it. No more pc crap. Brilliantly succinctly written post.
Is this a sponsored post from another crypto claiming to be better than Bitcoin? Seems out of place here. Another altcoin with a “but it’s faster!” slogan.
Props to the kid for holding Bitcoin so long but this is ridiculous.
Visa/mastercard charge high fees because they have a monopoly. Small businesses get socked with 3% because they have no market power. I’m sure the walmarts and amazons pay less than 0.5%.
If visa/mastercard ever had serious competition they could easily kill it off by reducing their charges to cost, which is likely a fractional cent since it’s all electronic now. Folks over 30 may remember when paper “chits” were passed around. Those were the days of high costs.
Think about what happens to your crypto if a large bank or visa/mastercard use their market power to launch a coin with acceptance at nearly every retail outlet.. All others would become worthless instantly. None of them are a serious medium of exchange right now. They are only stores of value so long as enough speculators keep the price above your entry level.
Remember when empty companies just changed their name to “dot com” and the stock shot up? That’s what bitcoin is. Anybody who announces they’re getting into block chain sees in influx of investors, even though nothing material has changed.
“Visa/mastercard charge high fees because they have a monopoly. Small businesses get socked with 3% because they have no market power.”
I heard credit card companies have lobbied some states to make charging an extra fee for using plastic illegal.
Also don’t forget about the merchant services company that takes a cut. Will be the first to be disintermediated.
Hey everyone.
Just came here to say Erik has turned into a scammer. Don’t trust anything he says or buy anything he’s selling.
MTL is a complete dog tier shitcoin and is absolutely fucking garbage. It could go up, with an ALT coin market rally for no reason other than alt coin dominance will go up. This is a clear example of someone who is right for all the wrong reasons, if it does go up. People like this kid who got lucky, yes lucky, with Bitcoin are few steps away from basically losing majority of whatever he gained with shit tier shitcoins.
Catchy but weak arguments, suspicious analogies and unnecessary use of popular brand names = Straight up sales pitch catering to “masses”.
Whatever alts succeed at “better than Bitcoin” – Bitcoin can copy. I think there is a possible distant second but I don’t like the odds of picking who’s going to be second place.
It’s no wonder the billionaires like Tim Draper, Winklevoss Twins, Peter Thiel, Mike Novogratz etc are largely on Bitcoin.
You guys literally rail on cheap marketing tactics in other articles on your blog so here goes some honest feedback:
Did you even read this article before putting it up on your site? It’s not enough of an excuse to say “this does not represent our opinion” at the start to absolve you of sub-par content. How much did Eric pay you all for this? Hope its worth the brand damage and slowly alienating your target audience…Agree with posters above this is a cheap advertisement from someone who clearly hasn’t the slightest clue what he’s talking about. The writing is amateurish, let alone the superficial understanding of the technology he’s referencing.
Show some respect for your audience, and ask yourselves if you would find this article anything but laughable if you were on our end.
I’ve learned a lot from you guys, and want to thank you with some sincere feedback. Only commenting now because I hope that you continue to keep up the great work you’ve been doing instead of allowing this sort of content onto one of the few gems in a sea of low caliber blogs catered to the masses.
Feedback taken our conclusion is we won’t allow guest posts in the future. Hope this works!
I had the pleasure of meeting Erik at a certain high profile event about 1-2 years ago. I can easily provide further details to prove myself. This post isn’t so much a shot at anybody but I’m fairly skeptical about crypto. FYI I have made somewhere between 1K-30K profit investing in crypto and am currently stuck in a hard rock for selling. My strategy was to sock away money periodically through multiple classes of assets and not day trade. Long story short I’m trying to minimize my tax profile since at the end of the day it matters how much money you rake in after all expenses are considered.
The economist Erik Townsend was on Ludvig’s SGM podcast ranting about how crypto is a libertarian’s wet dream. If it truly was a threat to the system the government would shut it down by declaring all crypto as taxable items. (Can you further see why I’m stuck in a hard place right now?)
The debate is pretty split between financial professionals. The way I see it is I’ve made a tidy profit and can sleep at night that I took home some pretty change. Now could it rise to 100K per coin and all the pro-crypto people laugh their way to the bank? Absolutely, but I can live with that considering I’m in school for a marketable degree. Money will always be made, just understand what you’re investing your hard earned money in.