Response to "It's time we as a community moved away from Bitcoin" Part 1 of 2.

This is written in response to the post titled "It's time we as a community moved away from Bitcoin" by u/MrCrickets

PART 1 of 2

“To everything there is a season, and a time to every purpose under heaven” - Ecclesiastes

In December 2017, a huge influx of first-time cryptocurrency speculators began entering the space and populating cryptocurrency subreddits. The Bitcoin bull run captured international media attention which sparked a craze and ignited Bitcoin FOMO on an unprecedented scale. The price of Bitcoin skyrocketed, and for those who entered on the tail end of the bull run, the kind of massive returns being advertised in the media seemed already out of reach. But what many soon discovered was a nascent market that held the promise of recreating the boom for those that missed out: altcoins.

The altcoin bull run was a direct result of the massive influx of new purely-speculative investment in Bitcoin. This new speculative class was previously unaware of cryptocurrency, held no allegiance to Bitcoin itself, and was itching to filter into other areas promising higher risk/reward bets. By January 2018, alts had become the next craze, and due to the snowball effect of speculative hype, the new sure thing.

Since this alt boom was largely based on speculative investment, it was followed, as are all hype cycles, by a bust. The market had been kicked into overdrive, running entirely on fumes for about a month and a half until finally sputtering out and coming to a stop, despite the makeshift rocket boosters (ICO's) that had been frantically rigged up in the meantime.

This demonstrated a return of rationality into the market. But there was a problem: the millions of speculators who fomobought under the pretense of easy returns were left holding bags, and dreams of wild gains touted only weeks before were dashed. They had been promised a new low risk/high reward era, but in reality they had simply bought the top.

During the boom, the speculators poured into Twitter, Reddit, Youtube and other social media. At first these outlets were useful as a way to become informed about investments, but as the influx grew, the demographic of the space was radically altered, and the center of discourse shifted to the perspective of the speculators themselves. The dominant narratives emerging from this coalition, having been derived from speculation, were focused on promotion. This pushed the overall discourse to become more incentive-driven, creating a feedback loop of overlapping mini hype-cycles. Shilling became a universal practice, nearly indistinguishable from unaligned discussion. A nascent belief in “altcoinization” had emerged, gestated by an implicit "a rising tide lifts all boats" mentality.

Though the alt season is now over, this condition is left intact. The speculative class’ first taste of crypto was a boom, followed by an even bigger boom. The impression formed during this hyperbullish period is of a New Normal. And the alt boom narratives, instead of being destroyed by the bear market, have instead been put on perpetual life-support. They cannot be discarded, because the speculative class is financially bound to their validity. Altcoinization has become dogma, and its adherents await the Return. Like all dogmas, altcoinization is reactionary (this is not specific to altcoins). When the narratives of the tribe are challenged, a common enemy inevitably emerges as a rallying point. Something that represents a threat to their survival and prosperity. For the neo-altcoiners, this is Bitcoin.

The hyperspecialization of altcoins is so powerful because it parallels the general movement of human societies away from centralized administration and towards individual sovereignty. The disruption/peer economy, the upending of the traditional political spectrum and political multipolarity, the rejection of gender roles, the Internet, multiculturalism, Postmodernism are all expressions of this trajectory in human networks. As humanity scales up and peer-to-peer communication and collaboration become better and more accessible, the recent generations see a shift in our expectations towards a system that increasingly focuses on individual needs, creating space for everyone to realize their unique potential.

But the superabundance of resources created to that end has a negative side as well. No matter what your alignment, identity, preference; one feels entitled to its realization. This sense of entitlement finds perfect expression in speculative Altcoinization. Altcoins (particularily ICO’s) serve to cater to entitlement culture’s inexhaustible appetite for products that “represent” individuality and create new value. The hyperspecialization of brands seeks to exploit the multiplicity of needs, wants and tastes. Micro-hierarchies are formed, prompting consumers to cultivate brand loyalties. Consumption becomes personal, and brands become pseudo-identities. To this end, altcoinization is a vehicle for consumerism to finally muscle its way into money itself. We had beanie babies in the 90’s, Pokemon cards in the 00’s, and now we have ICO’s. What qualities do all these share in common? Uselessness, collectability, hype, and a short shelf life.

Altcoins during the boom became a game. A massively-multiplayer online game of unprecedented reach. Players are awarded monetarily for their proficiency and endurance; the interfaces are complex, powerful, and even beautiful (the Binance iOS app is exemplary). But what makes altcoin speculation possibly the greatest game of all time is its immersiveness; the game functions in a subdomain of the real economy, and so real-world events are subsumed within it. It has sprouted unique cultural codes and memeology. It harnesses all the faculties of desire, suspicion, foresight, intuition, and mastery that make gaming addictive and FUN. Altcoins, like games, like shopping, are useful for one, eternal, overriding purpose: producing dopamine.

So next time someone makes a spirited call for the community to rise up in defense of their altcoin bags against the evil scapegoat Bitcoin, remember the impulse that motivates them.

Part 2 will be posted soon. It focuses on Bitcoin and the Lindy Effect. I even have nice things to say about my favorite punching bag, Bitcoin Cash (spoiler alert: at the protocol-level it is the best existing cryptocurrency after Bitcoin)