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Ethereum: Does Bitcoin have inherent value if you can fork the project and create a new cryptocurrency easily?

Published by Terlumun Aondover on February 13th, 2025.

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Ethereum’s Inherent Value: Should Bitcoin Just Be Forked?

A slew of new cryptocurrencies have emerged in recent years, each with its own unique features and goals. But many enthusiasts are wondering whether these alternative projects are truly worth their time and attention. One question that has sparked debate among cryptocurrency enthusiasts is whether a successful fork of an existing blockchain network can create its own value on its own.

What Makes Bitcoin Special?

Bitcoin (BTC) is widely considered the first and most significant cryptocurrency. Its creation by Satoshi Nakamoto, a mysterious individual or group, marked the beginning of the digital currency landscape. What sets Bitcoin apart from other cryptocurrencies is its decentralized, open-source design, which allows for peer-to-peer transactions without the need for intermediaries.

The Problem with Easy Forks

While it may seem advantageous to fork Bitcoin and create a new cryptocurrency with similar goals, this approach has several drawbacks. With over 5,000 alternative projects emerging, including some that claim significant value and use cases, the market is becoming increasingly saturated. This could lead to a situation where any project can gain traction by simply changing its basic design.

A Case for Limited Numbers

One of the arguments in favor of a limited Bitcoin is its scarcity. As the largest cryptocurrency by market cap, Bitcoin has a fixed supply of 21 million coins, meaning that each new coin created through a fork must be significantly more valuable than the previous one to justify its creation. This inherent value, often referred to as “scarcity-based” value, can create an upward trend in the price of any successful fork.

Why Ethereum’s Limitations Are Less Relevant

Ethereum (ETH) is designed from the ground up with a focus on scalability, smart contract functionality, and decentralized application development. While it is true that ETH’s algorithms have been improved many times since its inception, this does not necessarily mean that the project has lost its value.

Difference between Bitcoin and Ethereum as Cryptocurrencies

Bitcoin is primarily an asset class, while Ethereum is a platform for building various applications. The former is intended for use as a store of value, medium of exchange, or unit of account, while the latter is intended for decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, and other use cases.

Why Bitcoin Has Inherent Value

Despite the many forks and alternative projects that have emerged in recent years, Bitcoin still has a number of characteristics that make it valuable:

Established market: Bitcoin has been trading for over 10 years, creating a well-defined market with liquidity and institutional support.

Regulatory Framework: The U.S. Securities and Exchange Commission (SEC) has approved several Bitcoin-related projects, providing a regulatory backdrop that can help mitigate the risks associated with investing.

Network Effects: As more people adopt Bitcoin as a store of value or unit of account, the value of the network will increase due to increased demand for its services.

Conclusion

While it is true that creating a new cryptocurrency through a fork can create its own value, this approach has significant limitations. In contrast, Ethereum offers a more diverse set of use cases, scalability improvements, and regulatory clarity that can help create value in the marketplace.

As investors continue to weigh their options among various cryptocurrencies, it is essential to consider not only the basic design of the project, but also its potential for long-term growth, adoption, and institutional support.

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