Bitcoin as Store of Value, LTC/DASH for Payments?
With the limited supply of BTC and the meteoric rise in valuation, many HODLers are left to ponder the wisdom of buying ANYTHING with BTC when one considers what the value of even 1/10th of a BTC might be worth this time next year. After all, 10,000 bitcoins were famously used to buy two pizzas in 2010.
Another factor influencing BTC use as a payment medium are the fees, which are often pointed to as being too high, as well as the long confirmation times when compared to other payment options in existence. The scaling debate, and bigger block sizes also enter this conversation. However, when one considers the relatively low adoption rate thus far of segwit since the upgrade at the beginning of August 2017, the fee argument and perhaps some speed arguments might be ameliorated. But more importantly, developments with the lightning network are so promising that the core team might bring an end to the ‘bigger block’ debate as a solution to scaling once and for all. In any case, the big block advocates have their coin in the form of BCH and as time progresses the likelihood of the two coins (BTC/BCH) co-existing seems more and more likely.
As for developments with the lightning network being deployed, the first ever off chain atomic swap was successfully completed last week and the potential here is huge.
Litecoin founder Charlie Lee stated, “Previous atomic swaps that I have done were on-chain, and had the on-chain limitations of slow [transactions] and high transaction fees. Off-chain atomic swaps are significantly better. They are instant, [have] low fees, and better protect one’s privacy.”
The Lightning network allows users to connect between chains and pass crypto without waiting for on-chain confirmations, and has exceedingly lower fees. It is aptly named for its speed, and will make micro payments feasible and low cost as well as provide the means to rival the existing (non crypto) system controlled by big players such as VISA.
An interesting advantage also provided by this ‘second layer’ solution (made possible by the segwit upgrade) is the anonymity provided. As Monero and ZK options (Ethereum) seem to be leading the way for users who desire heightened anonymity, the core team appears poised to address scaling, speed, fees, and anonymity all in the coming year.
Then there is DASH, with its proprietary technologies InstantSend and PrivateSend allowing users to send transactions in a very quick and absolutely anonymous manner, respectively. DASH has seen an unprecedented run during November, trading at press time around $645 USD and providing another very viable payment option. With increasing adoption DASH is poised to become a great alternative for people wishing to pay in crypto but HODL their BTC for the near term.
Another coin which may push its way to the top in 2018 is Vertcoin (VTC) Vertcoin is a digital currency which also stays true to the original vision of crypto currency as owned by its users and independent of large banks and mining pools as it can be mined by anyone profitably Designed to resist centralization, custom mining hardware and multipool mining, as well as having already activated segwit, VTC is one to keep an eye on.
As the top crypto currencies jockey back and forth for market cap supremacy behind bitcoin, newer coins continue to arise and tout benefits such as ASIC resistant mining, PoS vs PoW, and other features which make mining and/or supporting less well known coins worth a look.
You may have heard before that “good things take time” and along these lines, one mustn’t lose sight of the progress made already, and appreciate the unprecedented growth of BTC in 2017 and the crypto sphere as a whole, which appears to be changing the entire financial paradigm one immutable block at a time.
Which brings us full circle to the question of “To HODL, or not to HODL?” In other words, should you spend or save your BTC? With the institutional money set to flow into the BTC space in just a few short weeks via CME and CBOE BTC futures contracts, volatility in near-term BTC price seems assured initially, but the strength of the BTC ecosystem in 2017 appears ready to accept any large dips in price as buying opportunities, or ‘discounted buys’.
Ultimately, BTC has the potential to be both a store of value AND an effective, fast, low cost payment solution. The traction gained in 2017 has paved the way, and helped to legitimize the crypto currency even on Wall Street. The future appears very bright for BTC.
Ex-Google engineer, Charlie Lee is the creator of Litecoin and MD of the Litecoin Foundation. Previously Director of Engineering at Coinbase, Lee now focuses full-time on Litecoin. To enhance fungibility and privacy of LTC, integration of MimbleWimble has begun, however Lee has recently announced a crowdfunding launch to fund the development.