Multinational brokerage giant, Fidelity Digital Assets, released a report on Bitcoin titled Bitcoin First, naming the digital asset a ‘superior form of money’.
Litecoin, which has a 100% uptime history and over a decade’s worth of provable decentralisation, provable scarcity, seamless integration in the crypto financial sector, and a newly released update (MWEB), didn’t make the cut.
In the paper, Fidelity argued that Bitcoin should be considered separately from other digital assets, more often known as ‘altcoins’. The authors argued that BTC is fundamentally different from the hundreds of other assets and that no other cryptocurrency is likely to overtake king crypto “as a monetary good”.
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Instead of recognising Bitcoin as technology, Fidelity argued that Bitcoin is more than that. It is the most ”secure, decentralized form of asset and any “improvement” will necessarily face trade offs.” The paper read:
Bitcoin clearly possesses a lot of good qualities of money, combining the scarcity and durability of gold with the ease of use, storage and transportability of fiat.
While Bitcoin is not alone in having over a decade’s worth of seamless network activity, provable decentralisation and growth, the financial service provider argued that BTC possesses its qualities because there is no organisation running it, and it does not pay dividends or have cash flows. The scarcity and decentralised nature of Bitcoin adds to its monetary properties.
However, the asset manager left the door open for alternative assets such as Litecoin, which is often seen as the ‘digital silver to Bitcoin’s gold’ in the crypto space.
We won’t be so bold as to predict there will only ever be one money, but we do believe that one monetary good will come to dominate the digital asset ecosystem due to the very powerful effects of networks.
The Nakamoto Standard?
Fidelity views Bitcoin as a starting point for traditional investors dipping their toes into crypto, noting that investors should incorporate two frameworks for investing in digital assets: one focused around Bitcoin as a superior monetary asset, and another focusing on venture-capital-like investments.
Originally, the pseudonymous creator of Bitcoin Satoshi Nakamoto intended Bitcoin to be used as a form of money, with some proponents arguing this for well over a decade.
However, the financial services provider may be prematurely disregarding a trend that suggests there is space for other assets with demonstrable sound properties and vast global adoption.
Since last year, Bitcoin and Litecoin wallet creation has been on the rise, with Litecoin wallets accelerating parabolically against bitcoin for over a year. Litecoiners believe that instead of a Bitcoin (only) standard, there will be a ‘Nakamoto standard’. In this scenario, the two most reputable cryptocurrencies ever – Bitcoin and Litecoin – would lead the way in creating a monetary standard that’s pemissionless, trustless and borderless.
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