Bitcoin may have its flaws, but don’t turn to the copycats because they share some of the same weaknesses as Bitcoin.
That’s the message from a recent Weiss Cryptocurrency Ratings report. On Monday, it released a report titled “The Flaws of Bitcoin Copycats.”
We bring you some of the highlights from its findings here.
The many ways Bitcoin sucks
Those who are full in with Bitcoin, or even just dabble in it, have seen first-hand its many flaws. Weiss points out how Andreas Antonopoulos said Bitcoin could ultimately lead to an entirely new financial system “… that cannot be manipulated by any central authority … that can even form the basis of a new kind of legal system.”
While that’s great, Bitcoin has its share of flaws, and they stem from what Weiss calls “its first-mover disadvantage.”
In the report, it is noted:
“As is often the case with the first iteration of any new technology, it is slow, expensive and has fatal design problems that are not easily overcome…”
Here are some other ways Bitcoin sucks, according to Weiss.
- There is no easy way to upgrade Bitcoin’s protocol (software code). Typically, the only solution is to create clones of Bitcoin, then upgrade a tad and start a brand-new network — Bitcoin copycats.
- Transactions take up to an hour to confirm. Worse, the network gets easily congested during times of high usage, making the transactions even more expensive and slow.
- There is no “settlement finality,” meaning that a transaction is never truly closed in an accounting sense. This may not be an issue for current uses, but the situation will be aggravated when Blockchain is used for securities transactions, where settlement and ordering of transactions are ke
- Bitcoin’s limited supply makes it a deflationary currency. That means it can’t be used as a real currency. It may be a store of value, but that remains to be seen.
And the many ways Bitcoin rocks
Bluntly, Weiss stated:
Here’s Bitcoin’s strength, its first-mover advantage: Despite all its deficiencies, Bitcoin can boast one thing that no other cryptocurrency in the world has: global brand recognition. Most people around the world have heard of Bitcoin; they know what it is.
The many ways Bitcoin rocks has resulted in copycats trying to ride on its coattails. These copycats seem to be attempting to cash in on Bitcoin’s popularity and correct some of its obvious deficiencies, according to Weiss. Its report named Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, and Bitcoin God as examples of the copycats.
All of these were launched in an attempt to solve just one or two issues plaguing Bitcoin. So each Bitcoin copycat measures itself against the original — claiming to be superior, and hoping to enjoy Bitcoin’s popularity plus a bit more.
Unfortunately, by trying to improve on Bitcoin’s fundamentally flawed design, the copycats still inherit most of Bitcoin’s weaknesses — slow speed, poor scalability, high costs, energy inefficiency, lack of privacy and more, according to the report.
Weiss acknowledged that Bitcoin Cash, for example, is eight times faster than the original Bitcoin. Also, Bitcoin Gold has more decentralized mining than the original Bitcoin. However, addressing just one or two of Bitcoin’s myriad issues is hardly enough, Weiss pointed out.
The report notes that the problems for copycats include them:
- relying on a fee structure that gives too much power to the miners, often creating conflicts of interest between them and the end-users
- still using deflationary models
- relying on unsustainable electricity consumption for securing their network
- still being plagued by the difficulty of upgrading the protocol
And in addition to all these legacy issues retained from the original Bitcoin, there’s also one key element that makes the copycats decisively inferior to Bitcoin. Not a single one enjoys Bitcoin’s usage and popularity.
This article appeared first on Cryptovest
