Bitcoin, known for its secure and resilient nature, has been widely regarded as the ultimate digital store of value. However, there is ongoing debate about whether it should expand its role and offer additional functionalities such as becoming a global currency or a platform for registering valuable assets. The launch of Bitcoin Ordinals and BRC-20 tokens has sparked renewed interest in these discussions, with increased demand for the Bitcoin blockchain. While this is beneficial for proponents of Bitcoin as a store of value, it also leads to more competition, higher fees, and longer confirmation times, which are less desirable for those envisioning Bitcoin as a fully functional currency.
Bitcoin's deliberate restriction on block size and transaction capacity has posed challenges, but it has also fostered technological innovations like the Lightning Network. Similar challenges have been faced by other blockchains, limiting their popularity in handling tokens and NFTs. Despite Bitcoin's position as a store of value, its adoption as a global currency is not yet widespread. During the COVID-19 pandemic, people generally preferred saving in fiat currency rather than embracing Bitcoin, although it has gained traction in the treasury reserves of institutions, banks, and countries as a hedge against future crises.
Looking to the future, it is important to acknowledge that Bitcoin cannot fulfill every expectation. Currently, there is no blockchain that can serve as a store of value, a mode of transaction, and a home for valuable assets simultaneously. This has led some to turn to Ethereum, but its dominance has yet to materialize. Bitcoin can learn from Ethereum's experiences and redefine its identity and purpose in the market. Its trustless nature and ability to adapt to changing market conditions have made it the preferred blockchain for many. However, its evolution will be influenced by the actions of participants in the free market.
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The opinions expressed in this article are those of Paolo Tasca and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
