Today there are thousands of cryptocurrencies. Coingecko.com tracks over 10,100 different currencies and Messari provides data on almost 22,500 digital currencies. Anyone can launch a new cryptocurrency, whether based on new research or forking an existing project. The fool made fun of the low barriers to entry back in 2014.
However, the vast majority of these coins should not be viewed as true investments. Only a small handful of cryptocurrencies can be expected to hold or gain value over time. A larger group would like to make a dent in the cryptocurrency market, but these are speculative ideas at best. I wish you luck but staying on the sidelines until further notice.
And then there's the huge, teeming horde of dumb cryptocurrencies that a ten-foot rubber chicken wouldn't touch. Some cryptocurrencies can be fun experiments, while others take a more serious approach. However, amid the vast landscape, there are also those who seem more interested in quick profits than genuine innovation. These directionless projects can be downright dangerous places to invest your hard-earned money.
Let me point out a cryptocurrency in the gray area, which may have good intentions behind it but does not belong in any serious investor's cryptocurrency portfolio. It's a well-intentioned rebel hoping to revolutionize the cryptocurrency market with different ideas, but this coin doesn't stand a realistic chance against the true giants of the industry.
Back to the roots
Industry giant bitcoin (btc -0.06%) has evolved over the years. Your code has been updated via several hard forks, introducing new features and fixing dangerous bugs. The developer community hasn't always agreed on the best path forward, so what we call Bitcoin today is the largest and most widely accepted version of a multi-branched code tree.
One of the Bitcoin forks is different from the rest. Unfortunately, I don't think that's a good thing. Bitcoin SV (BSV -0.06%) sees itself as the only true Bitcoin, supposedly turning the standard Bitcoin project into a rebel with ideas that break the original design.
I'm all for introducing different ways of doing things. I'm less enthusiastic about protecting an obsolete design just because it's the traditional way of doing things. That's what we have here.
Bitcoin SV Background
First, Bitcoin cash (BCH -0.64%) was created when Bitcoin introduced segregated witness technology, or SegWit. Bitcoin SV was then separated from the Bitcoin Cash project as the payments-focused cryptocurrency adopted new privacy protection features.
Bitcoin SV stands for "Satoshi's Vision", a nod to the anonymous creator of Bitcoin. Satoshi Nakamoto. What you see today in this project is closer to the Bitcoin of 2017 than any other cryptocurrency. But the official Bitcoin changes are helpful. They make the transaction system faster and more secure.
The original invention is not necessarily perfect. That's why the U.S. Constitution has amendments, software companies release patches to fix errors over time, and authors rely on editors to fact-check their typos.
And that's why Bitcoin in 2023 is not the same as Bitcoin in 2017. Satoshi's Vision coin is rolling back upgrades, not cementing a perfect operating model.
What's that Bitcoin SV ticker doing in your wallet, Anders?
Now I still have some Bitcoin SV in my wallet, because Coinbase (CURRENCY -4.65%) It won't let me sell it or convert it into other cryptocurrencies. It's just an unintentional side effect of holding some Bitcoin in 2017 and following up with the resulting Bitcoin Cash in 2018. That doesn't mean I recommend it or would ever spend a dime to buy Bitcoin SV.
I see no value in this potentially dangerous preference for older technology. By reverting or bypassing these updates, Bitcoin SV potentially exposes its users to vulnerabilities that have been identified and fixed on the Bitcoin main chain. Stay away from Bitcoin SV, even if you find a way to trade it.
Anders Bylund has positions in Bitcoin, Bitcoin SV and Coinbase Global. The Motley Fool positions and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.
