In late 2022 we saw the collapse of one of the largest crypto exchanges, FTX, which has had many further repercussions and caused billions of dollars worth of damage. It wasn’t the first crypto exchange crash and it wasn’t the last with many others like BlockFi, Bittrex and Prime Trust following just to name a few. So as the new crypto craze of Ordinals and Runes starts to take off, we’d like to take a step back and help readers understand why we focus on Bitcoin not crypto.
You can read about the details of the collapse from many sources so we won’t go into it in huge details here. But essentially, the crypto exchange FTX was doing some extremely questionable stuff with their own (and users) funds. When this was revealed in part to the market a bank run occurred and the entire house of cards came spectacularly crashing down.
As a result, almost $10 billion USD was lost and the one who started it all, Sam Bankman-Fried (also known as SBF), is now behind bars for 25 years. Yikes.
It should be noted that their collapse is just the latest in a long line of bankruptcies spanning all the way back to the very first exchange Mt. Gox. For some fun history you can see a list of them all in our piece Crypto Exchange Bankruptcies: Spectacular And Ever Constant.
What we’d like to focus on here is reiterating how you can avoid these issues both now and in the future and why we focus only on Bitcoin. To avoid being rugged and losing all your money (not to mention maintaining your Bitcoin Privacy) it boils down to three core rules:
- Bitcoin ONLY, no altcoins
- Self Custody those bitcoins in your own Bitcoin Wallet
- Never use centralized exchanges, use non-KYC decentralized Exchanges
Contents
What’s The Difference Between Bitcoin And Crypto?
For the new and uninitiated out there, first we’ll just quickly explain what the difference between Bitcoin and Cryptocurrency is and then get into a bit more detail below.
A good example to help illustrate the difference is a Ferrari 296 GTB and the descriptive word Car. A Ferrari 296 GTB is a type of car, just like the Ford Model T is also another type of car. You have “car” as the general category and then many thousands of different cars underneath that.
Similarly, you have Bitcoin and then the descriptive word Cryptocurrency. There are many tens of thousands of cryptocurrencies out there under the general category of “cryptocurrency” and Bitcoin is just one example. Ethereum is also another type of Cryptocurrency.
As Bitcoin was the first cryptocurrency, many people who don’t know much about the topic (eg talking heads on TV) use the two terms interchangeably which can lead to a lot of confusion. They also think that Bitcoin and these many other thousands of cryptocurrencies (or altcoins or shitcoins as they’re known) are “similar” or comparable when in fact they are anything but.
Bitcoin is the original monetary network that has a number of absolutely critical aspects to it that elevates it orders of magnitude above all others. Not a single other cryptocurrency out there has its network effect, its creation conditions, its size, its branding, its recognition, its decentralization or its security.
All things that underpin anything that is trying to be a real money. It’s like comparing a Ferrari 296 GTB… with a tiny plastic Hot Wheels car.
Bitcoin not Crypto.
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There Is No Second Best
Bitcoin has had no outside capital investment and is still by far the biggest. Crypto has had vested interests pour billions into companies hoping to create the next Google or Amazon that they can then turn into cash cows via using unsuspecting retail investors as Exit Liquidity.
Bitcoin has stood strong for over 15 years now. Crypto has had coin after coin after coin crash and go to 0. Here are the top 2,412 coins versus Bitcoin over a multi-year period. 97%+ of crypto coins suffered a >10x loss. This is also pre-2020. These are also the top coins, there are 15,000+ other worse ones.
Bitcoin is actually decentralized with over 50,000+ nodes world wide. Crypto isn’t and is in many cases, beholden to regulatory capture already. Below is an example of Bitcoins decentralization in action. Hard proof, not promises.
Bitcoin is secured by the strongest computer network on the planet in the form of Bitcoin Miners with almost 600 TH/s of Hash Rate. Even the top crypto is orders of magnitude less secure and thus, at more risk from attacks.
Bitcoin is used by hundreds of millions of people world wide for savings, fighting oppression, growing businesses, buying groceries, coffee, building nations and more. Crypto continues to devolve into a sea of degenerate gambling, self printed tokens, bank runs, insolvencies, ponzinomics and dogecoin. The SEC has also ruled that virtually all crypto assets (except Bitcoin) are securities.
This shouldn’t really surprise any seasoned investor as all of them have had investors and backers help to fund their start up. They have CEO’s, boards, companies and copyrighted logos, all things that securities have. Bitcoin by contrast has none of those things because it’s a commodity, like oil or gold.
Bitcoin has a near perfect up time at 99.988% since its inception in 2009. Since 2013 it’s up time is a perfect 100%. Not 99.99999-whatever. A perfect 100%! If you’re not a network engineer like some of our staff, you might not truly appreciate how incredible that achievement is. For context, multi trillion dollar global behemoths like Google and Amazon can’t even beat that!
Crypto keeps getting hacked, pausing withdraws, going down and taking all its users invested money to zero.
Tens of thousands of NFTs that were once deemed the newest rage in tech and dragged in celebrities, artists and even Melania Trump have now been declared virtually worthless.
Guardian
The void between Bitcoin and all other “crypto” coins (and yes this includes the newer ones “built on Bitcoin” like Runes etc) is as big as the void between galaxies and should be beyond obvious to anyone that looks even remotely closely.
Shitcoins are a melting pot of scams, SEC violations, unregistered securities, fraud and a fake “decentralized” version of what we already have with centralized banks and fiat currencies that censor and steal for the powerful elite. FTT, the token created by the exchange FTX, was no different and it’s succumb to a similar fate that the thousands of other coins before it have.
Bitcoin not Crypto.
A Reminder For Why Bitcoin Was Created
FTX was a centralized exchange and bank for those who kept their crypto assets (including Bitcoin) on their platform. Banks, exchanges, governments and more have been freezing, debasing and stealing peoples money for thousands of years and the collapse of FTX is just another data point to prove this point.
At its core, Bitcoin Was Created to be an online version of physical cash that removes the need for trusted third parties like banks and exchanges. The original whitepaper is literally titled “Bitcoin: A Peer-to-Peer Electronic Cash System“.
>> Dive Deeper: Why Was Bitcoin Created? To Fight Evil Banks
Bitcoin allows anyone, anywhere to take their money and self custody it in their own Bitcoin Wallet with no other third party ever getting involved or giving permissions. FTX crashing is a reminder to all and is something we’ve said over and over and over again to try and educate as many people as possible.
Take any money you have off exchanges and self custody your bitcoins now!
The above advice rings just as true today, as it did back in November of 2022.
Bitcoin Not Crypto
Many, many people that had any type of money on FTX most likely have lost it all. There will be other crypto exchanges out there, maybe even bigger ones in the future, that will likely come under pressure and potentially fail as well. Don’t make the same mistake as everyone else.
We’re also not saying “I told you so” or dancing around cheering because FTX failed. That doesn’t help anyone and it simply displays bad form for the Bitcoin community as a whole.
Instead what we’re saying is to please take control of your money like Satoshi Nakamoto intended you to and setup a Bitcoin Wallet that only you control, with no trusted third parties involved. We’re saying only focus on Bitcoin. And we’re saying only buy your bitcoins from non-KYC Crypto Exchanges.
We hope you’re all doing well this year so far, and if you had funds on FTX, we’re genuinely sorry. If you were one of the lucky ones who didn’t, or have just started to learn about all things “crypto” recently, know that this type of collapse will likely happen again. This is your formal warning.
Focus only on Bitcoin and ignore the tens of thousands of other “hot new coins” that will “totally moon” and absolutely be “the next killer AI decentralized blockchain app for universal ID”. 99.999% of it is a literal pump and dump scam.
The other 0.001% may be legitimate (it’s always very hard to tell), but are no different from investing in a random start up. Maybe it becomes the next unicorn Facebook/Google/Netflix, but it very likely won’t, so invest your capital wisely and only invest what you’re able to loose.
Bitcoin, not Crypto.
