The proliferation of cryptocurrencies is out of control. Is this the last baroud of honor of the crypto before the purge and the triumph of Bitcoin?
11 million cryptos
According to the CoinmarketCap site, there are 11.52 million cryptocurrencies today. At this rate, there will soon be more cryptocurrencies than bitcoins …
The CEO of the Coinbase exchange platform estimates that around 1 million cryptocurrencies are created each week. For Brian Armstrong, he “Is no longer possible to assess them one by one”.
“The regulators must understand that the request for approval for each of them has become completely unrealizable”he launched on X.
In other words, the Casino Coinbase wants to be able to offer anything to its customers. To understand how we got there, we have to return to the Bitcoin pioneer and its four essential characteristics:
- Trustless: peer-to-peer transactions, that is to say without trusted third party;
- Permission: anyone can use Bitcoin;
- Resistant censorship: impossibility of preventing transactions;
- Perfect Scarcity: Unable to create more than 21 million BTC.
Bitcoin is a masterpiece of cryptographic engineering born from the combination of preexisting technologies: public key cryptography, hash algorithms (SHA-256) or the concept of proof-of-work. The result? An elusive currency existing in absolutely finished quantity.
Pandora's box was open and what had to happen happened: a Cambrian explosion of cryptocurrencies, for better and for worse.
For example, it is extremely positive that new generations become familiar with the dark world of cryptography. Especially in these times of mass monitoring. The multitude of cryptographic protocols available to improve confidentiality is the heritage of the rise of “crypto”.
However, this legacy comes with its procession of false good more or less harmful ideas.
Dream
The vision of the “web3” (a decentralized internet fueled by blockchains) is a mirage. The ideals are noble, but the fact is that total decentralization is a stake that cannot be put on the scale.
Centralized systems are faster and cheaper. It is the main promise of creators of cryptocurrencies than to offer cheaper and faster transactions. Problem, this is done to the detriment of decentralization. It is the famous Blockchain trilemma.
However, thousands of tokens are created every day. The crypto world remains obsessed with “The Next Big Thing”. Even Bitcoin is not spared. We have demonstrated it over the past two years with ordinals, BRC-20s, rare Sats and Runes.
But as always, the bellows ends up falling. The innovations supposed to bring us closer to this legendary web3 are often proved to be only vulgar pumps.
Each cycle is accompanied by a more or less warmed story. The buzz is currently maintained by a mixture of deffi (again), Stablecoins (still), same, AI and old cryptocurrencies like XRP.
And after the celebrities of the previous cycle, it is now the heads of state who “rug” (Trump Coin, Mélanie Coin, Libra Coin …).
During the last cycle, we had the Yield Farming, the Play-to-Earn (P2E), the Move-to-Earn (M2E), the unstable stablecoins (Terra/Luna), Dog Memecoins, Bridges, NFT , etc.
Many leave feathers … poorly necessary? Creative destruction? Scam? It's a bit at the same time.
And in the end, it is Bitcoin that wins
The fact that the same is now the most popular trend is good news. This means that no one claims to want to challenge Bitcoin. The casino finally assumes itself as such.
Monetary hegemony is a death fight and there is no doubt that Bitcoin has triumphed. There are still a few pockets of futile resistance, but the games are made. The United States will not create a strategic reserve of XRP or Ethereum.
The most successful applications are of a financial nature:
- Value reserve;
- Currency (L2 Lightning Network);
- Stablecoins.
For what ? Because the four main characteristics of the blockchain are especially useful for monetary and financial applications. Conversely, it introduces unnecessary friction and costs for most other applications.
Is it finally understood? Maybe. This is what the growing domination of Bitcoin (62 %) suggests even though the number of tokens and other cryptocurrencies continue to soar.
The next cycle will be more serious, with the integration of bitcoin into the traditional banking system. It will soon be possible to obtain loans in exchange for collaterals in Bitcoin.
Bitcoin: reserve of value and means of payment of help for all, and international reserve currency for states. This is what should remain once the smoke screen of the “crypto” is completely dissipated.
Don't miss our article: Ethereum: The descent into hell.
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