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As Christmas approaches and BTC (Bitcoin) hovers around 43k, the altcoin "Inscription" has initiated a new wave of frenzy. When BTC consolidates at higher levels, there tends to be a rotational effect of funds overflowing. At a time coinciding with the holidays in Europe and the United States and with no new industry hotspots, Inscription, primarily driven by the Chinese-speaking community, continues its performance. It aims to induce FOMO (Fear Of Missing Out) in those who haven't boarded the train and prompt those who exited to re-enter.
However, this scene cannot help but evoke a sense of concern.
The first image below shows the proportion of Inscription transactions on the BTC chain, while the second image illustrates the percentage of transaction fees contributed by Inscription.
It can be observed that the proportion of Inscription transactions on the BTC chain has exceeded 50%, with BRC20 accounting for nearly 35%. Moreover, Inscription's contribution to transaction fees is close to 40%, with BRC20 surpassing 20%.
As Inscription occupies storage space in the segregated witness area, it enjoys discounted fees. Data indicates that, using discounted rates, Inscription is squeezing out space for regular transactions, making normal transaction fees more expensive and intolerable.
The bigger crisis is that if Inscription transactions continue to encroach on regular BTC transfer transactions, when Inscription transactions overwhelmingly dominate, BTC will undergo a "change of color": shifting from the narrative of "digital gold" and a medium of value storage and exchange to a new paradigm of "checkbook" and recording fees (gas fees).
The echoes of Warren Buffett's criticism are still fresh. As early as 2014, Buffett had stated: stay away from Bitcoin; it's just an illusion. In my view, the idea that it has enormous intrinsic value is a joke. Valuing Bitcoin is like trying to evaluate a check issued by a bank — fundamentally meaningless.
Buffett's point makes sense: if BTC only represents the value of the checkbook, not the value of the dollars written on the check, then BTC might indeed be worthless.
Everyone knows that the paper of that check is worth only a few cents; what people want is the dollars written on the check.
The reason Bitcoin is worth so much today, reaching $43,000 and a total market cap exceeding $850 billion, surpassing the market value of Buffett's Berkshire Hathaway, is not because BTC is a company selling checkbooks but because of the value of the dollar digits written on the checkbook.
If the electronic checkbook that comes with the Bitcoin system, also known as the blockchain, no longer writes BTC on it but a variety of diverse token tokens, then BTC will ultimately become a company selling checkbooks. I don't know how much such a company would be worth, but it is likely to be far less than $850 billion.
The Inscription movement has evolved into a "color revolution" that is about to undermine the foundation of Bitcoin's value.
If the proportion of fees from Inscription transactions continues to rise to a dominant position, miners will be completely bought out and become allies defending this movement. From that moment on, it may be irreversible.
Changes in the value paradigm and the disappearance of the value narrative will inevitably lead to a severe decline in BTC valuation. There is no need for spot ETFs to go public because it is impossible to establish an ETF fund for a checkbook company alone. With institutional capital withdrawing, BTC will plummet.
Assets in the hands of BTC old hands are severely shrinking, and purchasing power is seriously declining. Why did Inscription play the game of passing the drum in the BTC ecosystem? Isn't it precisely to deliver the last blow to the BTC held by old players with considerable value? Now that the old players' assets are shrinking, they can't even handle the last blow. The drum passers are scattered, turning to other ecosystems to speculate on new plates, leaving behind a messy BTC in the wind.
BTC miners are suffering a severe decline due to the collapse of BTC prices and the departure of speculative hot money. Unable to make ends meet, miners have to shut down their machines one after another, causing a sharp drop in the overall network computing power and network security. Of course, what goes around comes around. The checkbook is not electronic gold; it doesn't need such massive computing power to maintain it. Falling prices - falling computing power - falling valuation, the death spiral begins.
Wall Street and savvy capital have found that, if the competition is about which is the better checkbook technology, Ethereum, with its low-carbon financial settlement layer narrative, is the chosen one. As Sun Tzu said, subduing the enemy without fighting is the best strategy. Ethereum has finally waited for the day when the fortress of Bitcoin is broken from within. Seizing the opportunity, Ethereum surpasses Bitcoin at one stroke.
Thus, Bitcoin ultimately becomes the abandoned child.
Inscription has killed Bitcoin. |
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Post time 29-12-2023 12:27:19