The Bitcoin Community’s Worst Nightmare Was Just Realized

TL;DR

• Back in March, someone cracked the code and made the Bitcoin community’s worst nightmare a reality: anyone can now create their own tokens on top of Bitcoin.

• (Which is kind of like building an app for the iPhone, instead of creating your own phone and then building apps for it – way less effort!).

• The downside is: it’s easy to spin up a token → pump the price → sell it all at the top (i.e. run a pump n’ dump scheme).

• But this actually benefits the Bitcoin network. Folks can think up niche use-cases for tokens and launch them on the Bitcoin network (just like they have been on Ethereum).

• More use cases = more users = faster adoption of Bitcoin’s technology. Long story longer: all of this incentivizes more people to buy and trade in Bitcoin.

Full Story

You’ve probably heard the term ‘sh*tcoin’ being thrown around the crypto space in the past…

It originated in the Bitcoin community, as a way to throw shade at cryptocurrencies that weren’t Bitcoin (most often Ethereum).

See, Ethereum lets anyone create their own token on top of the network.

(It’s kind of like building an app for the iPhone, instead of creating your own phone and then building apps for it – way less effort!).

E.g. If the feeling took us, we could create the ‘Web3 Daily Token’ on the Ethereum network.

And it’s really not that hard to do…you could do it in an afternoon.

Which is awesome if you have an idea for a useful crypto project and you want to hit the ground running!

The downside is: it’s easy to spin up a token → pump the price → sell it all at the top (i.e. run a pump n’ dump scheme).

The fact that this isn’t doable on the Bitcoin network has always been a point of pride for the Bitcoin community

…at least, it wasn’t possible until recently.

Back in March, someone cracked the code and made the Bitcoin community’s worst nightmare a reality:

Anyone can now create their own tokens on top of the Bitcoin network.

Here’s how it works:

You know how gaming arcades used to make you buy their own custom tokens?

You’d go to the front counter → give them your US dollars → they’d give you a bunch of coins that looked like quarters, but were actually arcade-branded coins.

It’s the same sort of deal here.

The same way the arcade tokens are priced and traded in US dollars, these Bitcoin tokens are priced and traded in Bitcoin.

Meaning folks can use the Bitcoin network to: create their own branded digital tokens → set a price → trade them for BTC.

Here’s how this actually benefits the Bitcoin network:

This change opens the flood gates for folks to think up niche use-cases for tokens and launch them on the Bitcoin network (just like they have been on Ethereum).

More use cases = more users = faster adoption of Bitcoin’s technology.

Long story longer: all of this incentivizes more people to buy and trade in Bitcoin.

The more BTC is bought/traded, the more valuable Bitcoin becomes over time.

The downside? People can now launch sh*tcoins via the Bitcoin network.

(But here’s a life-hack for you: just ignore them!).