On this episode of "On the Margin", host Michael Ippolito welcomes on Jordi Alexander, CIO of Selini Capital, and Justin Bons, Founder & CIO of Cyber Capital for a debate around the importance of Bitcoin.
Read our notes below to learn more.
Bitcoin’s Utility
For a blockchain to be successful, it needs to have utility.
The coordination of humans and making humans work for the same reason is utility.
BTC has a very unique story. Money needs stories. It is a semi-religious thing that binds people together.
Jordi believes that the core benefit of BTC is to have a 21M hard cap.
There is a need for self-sovereign money not impacted by macroeconomics.
The scarcity of BTC is a key utility.
Bitcoin’s utility can’t be compared to other L1 protocols according to Jordi.
Justin thinks that BTC can’t serve as money because of the blocksize limit.
BTC lacks utility compared to other cryptocurrencies according to Justin.
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What is Money?
Hardcap is not a necessity to be money.
There is a reason for money to be inflationary.
For anything to sustain as money, earned ownership is a must.
Justin thinks that ETH succeeded at achieving money properties compared to BTC.
Long-term BTC supply is unpredictable.
Deflationary money is not good money. Little reason to spend if holding the money is profitable.
Durability and portability are crucial for money.
Network effects is key for money.
Money is a type of representation of energy.
Future of Bitcoin
BTC may not make necessary changes and lost prominence in the future.
BTC can be overcomed by other cryptocurrencies.
There are challenges against BTC’s security model according to Justin.
Jordi agrees that there are challenges against BTC’s security but they can be solved.
BTC may not scale and serve as money according to Justin.
Proof of Work vs Proof of Stake
BTC is the only major cryptocurrency that uses PoW.
PoS is superior to PoW in terms of security, decentralization, and economics.
Jordi thinks that PoW is better suited for BTC.