Well-known venture capitalist: Bitcoin only needs to survive to become a high-quality value storage, and security is the priority

Naval Ravikant, a well-known venture investor and CEO of AngelList, explained that all Bitcoin needs to do to become a quality store of value is survive.

He said:

“All Bitcoin has to do to be a premium store of value is survive.”

Bitcoin Vs. Other Cryptocurrencies

Since its creation in 2009, two of Bitcoin’s greatest features and characteristics have been its decentralized nature and security . Although Bitcoin is not as flexible as other blockchain networks, such as Ethereum, as a value and settlement network, the Bitcoin network prioritizes security.

Over the past 2 years, the rise of Ethereum has led to the emergence of various other blockchain projects and networks. With unique visions and strategies, blockchain projects such as Ripple, NEM, and Ethereum Classic have gained high popularity among cryptocurrency investors and traders, and have all gained multi-billion dollar market caps.

Of course, users, investors, and traders have begun to compare Bitcoin to other more flexible and lower-fee blockchains. Bitcoin is often compared to Ethereum, which offers a completely different platform and protocol. Ethereum provides an infrastructure and network for decentralized applications (DApps), and unlike Bitcoin, Ethereum's token ETH is designed to be used as gas or transaction fees for creating DApps.

Bitcoin faces criticism

Mainstream media in some key regions, such as South Korea, have published highly inaccurate and rather biased narratives criticizing Bitcoin’s rising fees and limited flexibility compared to other networks.

Some mainstream media have criticized Bitcoin's high transaction fees and confused the public's perception of Bitcoin.

Those media, traders, users, and investors who criticize Bitcoin’s relatively high fees ignore the tradeoffs that exist between Bitcoin’s security and flexibility.

Ethereum had a total of four hard forks by the end of 2016, three of which were to deal with internal bugs and memory errors. In contrast, Bitcoin had a hard fork in its early days and has not had any major bugs since then.

Scaling Issues

Ethereum has also begun to suffer from various scaling issues, including increasingly high average transaction fees and smart contract operating costs.

Although Vitalik Buterin has stated that a large number of applications and smart contracts that have been written are running very inefficiently, he mentioned that more tools are needed to reduce the size of smart contracts and reduce transaction fees and gas costs.

All blockchain networks will have to deal with scaling when they reach the stage of Bitcoin. Scaling the Bitcoin network is much more difficult because of Bitcoin's firm security measures and decentralized nature. It is very difficult for an open network to reach a consensus.

Ravikant said:

“Other tokens may gain more usage, but they usually sacrifice some security to do so. For a store of value, security is everything.”

Security or flexibility?

However, Ethereum should not be compared with Bitcoin in the first place. Ethereum offers something that Bitcoin cannot offer. It is a flexible and multi-purpose decentralized application ecosystem. Ethereum is providing an infrastructure for new markets, such as the ICO market.

It is important for users, traders, and investors to consider the trade-offs between security and flexibility. Bitcoin was designed from the outset as a store of value, settlement system, and digital cash system. For a store of value, security must always be a priority.