Is this the end of Bitcoin? — Why this is the most boring question!
by Sven Henkel on Feb 3, 2023 3:00:00 PM
In this article, guest author Sven Henkel writes about the FUD on Bitcoin disregarding the recent developments.
Author: Sven Henkel
Tech and greed
Bitcoin has gained more and more awareness. This awareness has been fueled by two main factors. One is the new technology and its various use cases and the other is the price, which has skyrocketed to unknown heights and created many millionaires. The latter has attracted much more attention than the technology behind it. Greed was and is the main driver. In addition, there are parties with different interests, especially governments and central banks, who are afraid of losing control of their monetary sovereignty. Investors, including whales, are trying to manipulate the price in their own interest. For example, Elon Musk pumped and dumped Bitcoin in 2021 and is still pumping Dogecoin. Then we have social media, the press, influencers, and many other groups and individuals with dangerous half-knowledge (in most cases, not even that) who unwittingly muddle things up, leading to bizarre views. And the general citizen interested in bitcoin then reads so much contradictory, false and sometimes misleading information, so becomes misguided. Some of them dig deeper and then begin to understand the potential and strength of the new technology and Bitcoin itself.
So, is Bitcoin at its end?
The most important question to ask up front is: What has changed recently regarding Bitcoin? And yes, you are right. The price has fallen dramatically and has once again proven its high volatility. But what else has changed? In short, nothing! Sorry, I’m wrong. A lot has changed regarding Bitcoin, but … to its advantage: Bitcoin had a major upgrade late last year, enabling smart contracts, lower costs, and more privacy, to name just a few of the advances. In addition, the Layer 2 network called “Lightning” is becoming more mature, allowing payments to be made at almost no cost. And countries like El Salvador and the Central African Republic have begun accepting Bitcoin as legal tender in addition. More countries will soon follow. Candidates include Tonga, Mexico, Brazil, Nigeria, Ecuador and many others. Moreover, the acceptance of Bitcoin for payments is progressing. The launch of the Strike app is a revolution. It uses Bitcoin to send and receive money, and is widely accepted by Shopify (~500,000 businesses) in the US, Argentina, and El Salvador. And please note that credit cards charge 3% and PayPal even more just for sending money. Doesn’t that bother you? Just keep in mind that we all (worldwide) do $4,280,000,000,000 worth of annual credit card transactions. Now calculate that at 3% and that is what we waste year after year on a simple payment?
Now you understand why I get so bored reading these pointless articles about the end of Bitcoin.
Just let me know what you think about this in the comments section or e-mail me. For example, what other important use cases are you missing?
The classification of BTC according to the ITC:
Economic Purpose (EEP): Bitcoin is listed as an Unpegged Payment Token (EEP21UP) since the token is designed to serve as a generalist means of payment.
Industry Type (EIN): The issuer of BTC is active in the field of Payment Services and Infrastructure (EIN06PS), incl. areas ranging from traditional payment processing to novel forms of decentralized peer-to-peer payment infrastructures.
Technological Setup (TTS): BTC is a Blockchain Native Token (TTS41BC), and it is implemented natively by a Distributed Ledger Protocol.
Legal Clam (LLC): The BTC token does not entitle its holder to any legal claim or rights against the issuing organization; therefore, it is listed as a No-Claim Token (LLC31).
Issuer Type (LIT): The dimension “Issuer Type” provides information on the nature of the issuer of the token. Bitcoin is issued autonomously based on the set of rules defined by a Distributed Ledger Protocol, which is not owned and/or governed by a legal entity. Therefore, the issuer type of BTC is Distributed Ledger Protocol (LIT612DL).
Regulatory Framework (EU) (REU): The dimension “Regulatory Status EU” provides information on the potential classification of a token according to the European Commission’s proposal for a Regulation on Markets in Crypto Assets (MiCA, Regulation Proposal COM/2020/593 final). The BTC token qualifies as an Other In-Scope Crypto Asset (REU51ZZ) according to the definition provided in Article 3 (5) of Regulation Proposal COM/2020/593 final.
The International Token Standardization Association (ITSA) e.V.
The International Token Standardization Association (ITSA) e.V. is a not-for-profit association of German law that aims at promoting the development and implementation of comprehensive market standards for the identification, classification, and analysis of DLT- and blockchain-based cryptographic tokens. As an independent industry membership body, ITSA unites over 100 international associated founding members from various interest groups. In order to increase transparency and safety on global token markets, ITSA currently develops and implements the International Token Identification Number (ITIN) as a market standard for the identification of cryptographic tokens, the International Token Classification (ITC) as a standard framework for the classification of cryptographic tokens according to their inherent characteristics. ITSA then adds the identified and classified token to the world’s largest register for tokens in our Tokenbase.
- The International Token Identification Number (ITIN) is a 9-digit alphanumeric technical identifier for both fungible and non-fungible DLT-based tokens. Thanks to its underlying Uniform Token Locator (UTL), ITIN presents a unique and fork-resilient identification of tokens. The ITIN also allows for the connecting and matching of other media and data to the token, such as legal contracts or price data, and increases safety and operational transparency when handling these tokens.
- The International Token Classification (ITC) is a multi-dimensional, expandable framework for the classification of tokens. Current dimensions include technological, economic, legal, and regulatory dimensions with multiple sub-dimensions. By mid-2021, there will be at least two new dimensions added, including a tax dimension. So far, our classification framework has been applied to 99% of the token market according to the market capitalization of classified tokens.
- ITSA’s Tokenbase currently holds data on over 4000 tokens. Tokenbase is a holistic database for the analysis of tokens and combines our identification and classification data with market and blockchain data from external providers. Third-party data of several partners is already integrated, and API access is also in development.
If you like this article, we would be happy if you forward it to your colleagues or share it on social networks. More information about the International Token Standardization Association can be found on the Internet, on Twitter, or on LinkedIn.
Sven Henkel is a standing member supporting ITSA in its further development. He has a breadth of experience in all aspects of IT which he gained as a Management Consultant and in various IT management positions in the banking industry. Since 2017 he has gained extensive experience in the blockchain eco space with a special focus on Bitcoin and its technology, payment solutions (e.g., digital euro and lightning), regulatory aspects and IOT. You can contact him via firstname.lastname@example.org and connect with him on LinkedIn, if you would like to give feedback and/or share additional information on this topic.