Bitcoin remains the undisputed “king” of blockchains. Bitcoin’s dominance has increased significantly since the experimental times of 2017. Bitcoin has survived many attempted forks and “civil wars” and has established itself as the reserve cryptocurrency; people fall back to Bitcoin in bear markets. The production network has stood the test of time for over 10 years now.
However, the crypto industry has dismissed Bitcoin when it comes to smart contracts or Web 3.0. I believe this is going to change.
It’s true that Bitcoin cannot do everything. Bitcoin is secure because it has a limited scripting language. Bitcoin is reliable and durable because it doesn’t change. This does not mean that the developer ecosystem around Bitcoin cannot innovate and enable support for Web 3.0. As the crypto industry makes progress toward Web 3.0, we’ll come to realize that it’s hard to beat the security and network effects of Bitcoin.
Despite several initiatives by potential competitors, the hashrate of the Bitcoin network and the security offered by its proof-of-work (PoW) mining remain unparalleled to this day. For years, new cryptocurrencies have attempted to launch their own native PoW networks; none has approached Bitcoin’s success.
Bitcoin has network effects. Most people are introduced to cryptocurrencies through Bitcoin. If something can be done on top of Bitcoin, it will eventually get done on top of Bitcoin rather than a smaller ecosystem. Network effects make Bitcoin’s success self-reinforcing: Miners see that the network is established, that the community is strong and that the currency is the “hardest” money in the crypto space. Miners join or expand their commitment, increasing hashpower and network reliability; their entry inspires still more holders and businesses, increasing community support. The cycle goes on.
Smart Contracts on Bitcoin
Despite the success of Bitcoin, critics who question Bitcoin’s capacity for innovation have some…