Bitcoin Is 'Fundamentally Different' From Other Cryptos, Unlikely To Be Replaced - Fidelity
Bitcoin (BTC) is fundamentally different from any other digital asset and no other digital asset is likely to improve upon bitcoin as a monetary good, according to digital asset-focused financial services provider Fidelity Digital Assets.
In its latest report, the subsidiary of US-based mutual fund giant Fidelity Investments said that BTC "is the most (relative to other digital assets) secure, decentralized, sound digital money and any 'improvement' will necessarily face tradeoffs." For example, improvements in speed orscalability would lead to a reduction in another characteristic, such as the level of decentralization or security.
The authors of the report added that non-bitcoin projects should be evaluated from a different perspective than BTC, as the rest of the digital asset ecosystem can address different needs or solve other issues that bitcoin cannot.
Fidelity claims that BTC is best understood as a monetary good and is likely to serve as “the primary monetary good and another digital asset is not likely to supersede bitcoin in this role.”
The report also compares BTC with the second-largest cryptoasset in terms of its market capitalization, Ethereum (ETH).
“While Ethereum may be viewed by some as a superior or more advanced network compared to Bitcoin, the additional capabilities and flexibility come at a cost, most notably a more complex network that increases the chance for software bugs as well as less decentralization and potential decline in security,” according to Fidelity Digital Assets.
The report notes that, contrary to the BTC network, the ETH network is fast and responsive to user demand, but also more centralized and expensive.
The firm estimates that traditional investors typically attempt to place
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