2024-01-27 –, Machankura Stage
While Bitcoin is often conflated with other cryptocurrencies, only Bitcoin is genuinely scarce, decentralised, permissionless and incapable of censorship. Understanding the difference between Bitcoin and "crypto" is critical not only for capital allocators - both retail and institutional - but equally, it's important for regulators and enforcement agencies.
The difference between Bitcoin and all other cryptocurrencies is stark and glaringly obvious to those who have dedicated time to properly understand the distinction or who aren't otherwise conflicted.
Traditionally, VCs had to make a numerous investments and if they were lucky, they would be successful on a small number of them that would IPO or be sold in a private equity deal. For that, you needed a real business with product market fit. Crypto however has provided a panacea for VCs. No longer do they need to create a viable businesses. All they they need is an idea with a crypto token and a lot of marketing dollars.
Properly understood, crypto represents liquid venture capital equity tokens largely owned and promoted by a central leadership team with mark-to-market pricing and 24/7 liquidity. However, unlike regulated capital markets, crypto projects are not required to make any material disclosure relating to shareholding, paid partnerships or other interests that typically would be disclosed.
This is what makes crypto vastly different to Bitcoin. Crypto is best viewed as akin to a share/stock, whereas Bitcoin is best understood as a digital commodity. Increasingly, regulators have made that distinction including the biggest capital market on earth, the United States.
Former lawyer and host of The Why Bitcoin Show, a podcast focused on helping ordinary people understand why Bitcoin, not crypto.