In a publication made available today, Weiss Ratings looked at the situation that various “Bitcoin copycats” currently find themselves in. These ‘copycats’ are, of course, the hard forks of Bitcoin that currently exist on the market, such as Bitcoin Cash and Bitcoin Gold. Through its analysis, Weiss concluded that these projects suffer from the same “first-mover disadvantages” that it views as negative to the Bitcoin platform. Weiss Ratings previously gave Bitcoin a C+ in its first ever digital currency ratings release in January 2018.
Bitcoin is often credited as the world’s first decentralized digital currency. Prior to the white paper that the anonymous figure Satoshi Nakamoto published, digital currencies were unable to offer the same functionality as Bitcoin without relying on a central party.
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Through being the world’s first decentralized digital currency, Bitcoin garnered many advantages that continue to allow it to dominate the landscape in terms of both word-of-mouth and market cap. However, Weiss pointed out that Bitcoin’s early arrival consequentially caused the technology to be somewhat immature. “Bitcoin’s flaws stem from its first-mover disadvantage,” Weiss stated. “As is often the case with the first iteration of any new technology, it is slow, expensive and has fatal design problems that are not easily overcome.”As Weiss stated, 2017 was the heyday of “Bitcoin copycats,” as hard forks like Bitcoin Cash and Bitcoin Gold were released. While projects taking their own approach to Bitcoin’s open source client is encouraged in the decentralized landscape, many take issue with these projects using elements of Bitcoin’s ‘branding.’
While being first to the market undeniably helped make Bitcoin the powerhouse it is today, Weiss argues that newer digital currencies benefit from a heightened sense of perspective and more opportunity to correct the issues that burden Bitcoin. According to Weiss, these issues are Bitcoin’s technological limitations and its issues with scaling. While some Bitcoin forks attempt to solve these issues, the ratings agency argues that they are limited in comparison to new digital currencies. “All of these were launched in an attempt to solve just one or two issues plaguing Bitcoin. So each Bitcoin copycat measures itself against the original,” Weiss stated. “By trying to improve on a fundamentally flawed design, the copycats still inherit most of Bitcoin’s weaknesses.”Weiss touched upon many of these topics when justifying its ratings of several popular digital currencies earlier in 2018. While polarizing within the community, Weiss holds its position that “virtually nothing about Bitcoin’s technology stands out compared to competing altcoins with superior technological features.” Overall, Weiss acknowledges that Bitcoin will retain longevity due to reaching the market first. However, the institution believes that hard forks like Bitcoin Cash are insufficient solutions in comparison to some of the other digital currencies on the market.Image credit: Weiss Ratings logo
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