Macro investment strategist Lyn Alden says that one fundamental factor sets Bitcoin apart from all other digital assets.
Alden tells Peter McCormack on the What Bitcoin Did podcast that Bitcoin is one of a kind due to its network effect, or the phenomenon where the number of users directly contributes to the value of the network.
[adinserter block="1"]Alden highlights Bitcoin’s network effects by illustrating how copying Wikipedia will not result in replicating the traffic generated by the original site.
“I could copy Wikipedia… I could post Wikipedia on my website and the question is, ‘Would I get anywhere near the traffic that Wikipedia gets?’ Of course, the answer is no… I can copy all the texts that’s there, but I can’t copy the network effect. Specifically, I cannot copy the millions and millions of links around the internet pointing to the real Wikipedia. And I can’t copy the active user base that constantly updates Wikipedia.
Bitcoin has that network effect.”
The analyst also gives insight on how the Lightning Network, a layer 2 payment product built on top of BTC, will further enhance Bitcoin’s already-bolstered network effects.
“The years of liquidity and nodes that make that network very usable…take a long time to develop. It’s harder to do than another DeFi project or a blockchain.
And so BTC now has multiple layers of network effects built on top of it. The security is higher. The development is more secure, and there’s features being built on top of it. Overall, that’s what separates Bitcoin from other tokens, and it’s mainly why we view that one as money and everything else [as], at best, equity or at worst, a scam, compared to Bitcoin itself.”
I
Follow us on X, Facebook and TelegramDon't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Surf The Daily Hodl Mix
[adinserter block="1"]
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Michaelspb
