ZoneBitcoin EditorialAs anecdotal as it may seem, the confusion between the terms “bitcoin” and “cryptocurrencies” has led to many errors in understanding bitcoin. Bitcoin differs in several points and in a fundamental way from other cryptocurrencies and the fact of using this same term inevitably leads to many errors of interpretation on what Bitcoin really is.
This article will help you understand the fundamental difference between bitcoin and other cryptocurrencies. We will also show why it is important to stop confusing bitcoin with other cryptocurrencies that it is customary to call altcoins ( Alt for alternatives and coins for the term tokens or “currency”).
Why is there continued confusion between Bitcoin and cryptocurrencies?
To give you an example, confusing Bitcoin and cryptocurrencies would be like confusing a bicycle with a car since both are transport vehicles. Certainly, semantically, bitcoin is a cryptocurrency just like Litecoin or Monero For example. However, the fact remains that they represent different types of cryptocurrencies which have very distinct characteristics. Yes, let's point out that there are different types of cryptocurrencies with different uses and functions.
Thus, it is accepted that bitcoin is a cryptocurrency in the true sense of the term. So far, there is no problem of interpretation or definition. In fact, there was no problem with the definition before other cryptocurrencies appeared.
The problem actually arose when any currency operating on a blockchain was seen to be semantically compared (on the one hand) with bitcoin. From there, the amalgamation between Bitcoin and other cryptocurrencies has only become more pronounced over time, leading to ever more misunderstanding and false information concerning Bitcoin.
1/ Bitcoin is not a company
Bitcoin is not a corporation in the traditional sense, as it does not have an organizational structure or any formal legal entity. There is not a registered company that manages employees to operate Bitcoin. Bitcoin was designed to belong to no one and everyone at the same time.
Unlike a traditional business, Bitcoin is a decentralized technology and a peer-to-peer network. It is managed collectively by a global network of miners, nodes and users who contribute to its maintenance and operation.
Decisions regarding its protocol and its evolution are made by consensus within the Bitcoin community, without the intervention of a central authority or company.
Most other cryptocurrencies have legal entities. For example, Ethereum has a foundation based in Switzerland.
2/ Bitcoin has a currency function
The title of the Bitcoin white paper is “Bitcoin: A Peer-to-Peer Electronic Cash System”. The statement couldn't be clearer. It is indeed a peer-to-peer electronic money system. Other cryptocurrencies do not all have this vocation to be a decentralized currency. They can serve as tokens in a given system but not as money stricto sensu.
Bitcoin was designed from the outset to provide significant benefits as an electronic currency, such as security, transparency and speed of transactions, while eliminating the need for trusted third parties like banks.
Remember that El Salvador, which was the first country to legalize bitcoin as an official currency in the country, is - it seems - only the first in a list which will grow over time. Thus, the Central African Republic had also announced to make bitcoin a legal tender in the country, although the country's legislation is currently under discussion.
Concerning other cryptocurrencies, it would be really difficult and improbable to imagine that a country would make a currency like ETH for example, an official currency...
3/ Bitcoin is software accessible to everyone
Bitcoin is open source software, meaning it is available to anyone who wants to use it, examine its source code, and even fully participate in its development.
This feature of transparency has been one of the fundamental pillars of the Bitcoin community since its inception.
Coders and developers around the world can access the Bitcoin source code, modify it to make improvements or custom features as seen recently with the BitMV proposalEg.
This is perhaps where the greatness of Bitcoin lies: It is a project accessible to all, offering a real democratization of digital currency.
4/ Bitcoin operates on a decentralized network of participants
Bitcoin is backed by a decentralized network of miners who secure the Bitcoin blockchain using a process called proof of work (PoW). This consensus method makes it possible to guarantee network security and has proven itself over the years. Additionally, Bitcoin is one of the most resistant cryptocurrencies to 51% attacks, meaning it is difficult or very unlikely in practice for a single entity to ban and shut down Bitcoin.
The decentralization of the Bitcoin network contrasts with certain other cryptocurrencies which can be more centralized or even worse which can be based on the proof-of-stake consensus which is a system where the richest person owns the most tokens.
5/ There is a philosophy of Bitcoin
This may surprise novices who discover bitcoin at the same time as other cryptocurrencies. However, this is a fundamental point that radically differentiates Bitcoin from other cryptocurrencies.
Bitcoin as a decentralized currency was designed within a certain philosophical framework. The white paper was submitted to a community of cypherpunk whose members share common values regarding the right to private liberty and confidentiality. In this reading, bitcoin is a tool of emancipation which guarantees the freedom of users. Other cryptocurrencies do not have this ideological dimension. They are for the most part pale imitations of bitcoin which do not have the slightest philosophical foundation.
It is no coincidence that creator Satoshi Nakamoto apparently deliberately decided to remain anonymous. This clearly demonstrates that confidentiality transactions is part of the very essence of the creation of bitcoin.
Bitcoin didn't appear out of nowhere; It has a long history preceding it and there have been many attempts and experiments at creating a digital currency before its creation.
Final word: Bitcoin, not Crypto
When you see or hear the phrase “bitcoin, not crypto”, this is what it is referring to. There are also other characteristics that distinguish bitcoin from other cryptocurrencies. You can dig into the points explained above and discover other blog articles to understand the full scope of Bitcoin.
However, this article is not against other cryptocurrencies which, remember, can also have their own meaning and function in a given system. This is mainly about understanding that bitcoin is considered more of a currency and a store of value while other cryptocurrencies are mainly diverse and varied financial assets. Which is also a good “thing” for the renewal of finance, let it be said.
See also:
