Will Bitcoin Remain Dominant or Be Surpassed by Other Cryptocurrencies?

Once upon a time, traditional money ruled the world, leaving younger generations facing a daunting challenge: The older generation had all the money, the result of their hard-earned savings. Enter Bitcoin and other cryptocurrencies, solving this age-old problem by allowing the young to create their own digital currencies and bypass the older generation with their outdated printed money.

The Cycle of Innovation and Repetition

However, this solution is fleeting. As the current generation of Bitcoin savers grows older, they too will seek new digital assets to preserve their wealth. The younger generation, aware of this impending shift, may switch to a different cryptocurrency, rendering the older generation's Bitcoin obsolete. This cycle repeats as each generation seeks a new form of digital wealth, potentially leading to the ultimate deflation of all cryptocurrencies.

The Fundamental Issue with Cryptocurrencies

The core problem with cryptocurrencies lies in the principle of money itself. The concept of money is fundamentally flawed if anyone can freely create it. In the past, creating money without legal backing was considered counterfeiting and was illegal. Cryptocurrency has circumvented this issue, but it can never escape the fundamental principle: Every cryptocurrency is destined to deflate to zero value as more and more new currencies emerge and vie for dominance.

The Inevitable Collapse

The founders of financial bubbles, including Sam Bankman-Fried, have relied on the same flawed model as chain letters—creating new currencies and convincing others to buy them. This method is doomed to fail just like other financial bubbles, and it is only a matter of time before this cryptocurrency bubble pops. The hope is that this collapse does not bring down the world financial system with it.

Restoring the True Flows of Economics

Money was invented to simplify the process of bartering, but at its core, economics is about the flow of goods and services, not money. As long as it is illegal to counterfeit a country's currency, people will have an incentive to work and earn, rather than simply printing money to become wealthy. The legalization of cryptocurrencies circumvents this law but cannot escape the fundamental principle that any new currency will eventually devalue.

Lessons Learned: The Financial Embarrassment of Cryptocurrency

Sam Bankman-Fried's endeavors in creating and leveraging his own cryptocurrencies are a prime example of the mistake that so many others in the cryptocurrency space make. His actions, including theft, exemplify the foolishness of the cryptocurrency market. Future generations of young people will not want to be in the same position as their grandparents, stuck with a depreciating cryptocurrency when they themselves could create a new type of digital asset.

The rise and fall of Bitcoin and other cryptocurrencies is likely to follow a cyclical pattern, as younger generations seek new ways to store and move value. While Bitcoin may remain dominant for a time, it is ultimately destined to be surpassed or joined by other innovative digital assets. The financial world and its participants should be cautious and prepared for the inevitable shift.