I still remember the confusion of discovering that there are several different “Bitcoins”. After a few years in the cryptocurrency market, I have seen other people feeling the same way. If you’re struggling to decide what Bitcoin to buy, here’s what I’ve learned over the years:
For long-term holders, BTC is the best Bitcoin to buy. The reason is that BTC is the best store of value, and soon to be the best medium of exchange due to the lightning network. For traders who buy and sell with a shorter timeframe, it’s best to go back and forth between them.
Let’s go over the main characteristics of Bitcoin and which one functions best.
For full transparency: I hold BTC, but none of the others.
The different Bitcoins we’re going to look at in this article are the following:
|Market Cap||700 Billion||11.5 Billion||3 Billion||1.25 Billion|
|Date Of Birth||01.03.2009||08.01.2017||11.15.2018||11.12.2017|
|Special Feature||Highly Adopted||Faster Transactions||High Scalability||GPU Mining|
I’m not going to waste your time on the history behind all these Bitcoins or why they exist. Let’s get straight to the point:
What Bitcoin Is Supposed To Do
Bitcoin has two main functions: A medium of exchange and a store of value.
When deciding what Bitcoin to buy, you need to figure out which one is best with respect to these two functions.
A medium of exchange is basically something you can trade for something else – something you can use to buy stuff with.
The U.S Dollar is a medium of exchange because you can buy stuff for dollars.
A store of value is something that remains valuable over extended periods of time. Gold is a good example because the value of gold is pretty much the same today as it was over 1000 years ago. (Read this awesome article about how well gold holds its value over time)
The most important of these is the “store of value” part. That’s what people talk about when they call Bitcoin “digital gold”. It’s why institutions put BTC on their balance sheet and why rich people are hoarding it.
So how do the different Bitcoins do compared to each other in terms of these two functions?
Let’s go through them one by one with regards to the two functions above:
The Best Bitcoin As A Medium Of Exchange
First of all, it has to be easy and cheap to transact with for something to be a good medium of exchange.
In other words, a good medium of exchange needs to have/be:
1) Fast transactions
2) Highly scalable
3) Low transaction fees
On the table below, you see how the different Bitcoins compete with each other:
All things considered, BSV is a better medium of exchange than BTC, BCH, and BTG.
Interestingly, BTC seems to be the worst. How can this be when it’s the highest valued Bitcoin by far?
This is why:
Bitcoin (BTC) will eventually transact using a layer-two solution – The lightning network. It’s almost like a shortcut that transactions can take to be faster and cheaper.
Using the lightning network, BTC will handle millions of transactions per second, and they will only take milliseconds to complete. This will leave BCH, BSV, and BTG in the dust and make them obsolete.
Right now, BSV is the best medium of exchange. However, BTC will be WAY better when it starts using the lightning network.
BTW, sign up for my newsletter:
The Best Bitcoin As A Store Of Value
After a few years in this market, my personal conviction is that being a good store of value is the most important function of Bitcoin.
For something to be a good store of value, it has to inherit the following:
1) It has to be scarce. (There can’t be an infinite amount of it flowing around)
2) It has to be durable (It must not break down over time)
3) It must be hard to make more of it in a short period of time (Must be impossible to overflow the market with more of it)
4) It must be secure (the risk of “losing it” or “it being stolen” must be low)
Let’s compare the different Bitcoins for these four points, to figure out what Bitcoin to buy:
|Hard To Make More Of It||Great||Great||Great||Great|
They are mostly the same, but they differ greatly on security. For this reason, BTC is the clear winner.
Another thing to think about is this:
When more capital is invested in a store of value, the liquidity improves. This means that big sell or buy orders have less effect on the price.
Stores of value that swing less due to big buys or sells are favorable to stores of value that swing more.
BTC has WAY more capital invested in it compared to BCH, BSV, and BTG. Consequently, the BTC price is less sensitive to big buys or sells and, therefore, a better store of value than the others.
The Bitcoin Revolution – An article on how Bitcoin might revolutionize the current financial system and overthrow the U.S. Dollar
Is Bitcoin SV (BSV) A Good Investment? – An article analyzing BSV as a possible investment.
Can Bitcoin Reach $1 Million? – How, when, and why Bitcoin can reach a price of $1,000,000 per BTC.
Conclusion: BTC Is The Best Bitcoin To Buy
BTC is the best Bitcoin with regards to being a store of value, and soon also as a medium of exchange due to the lightning network. This makes it, fundamentally, the best Bitcoin to buy.
If you’re a trader who regularly buys and sells cryptocurrencies, it might not be that black and white. For you, the other Bitcoins might represent a short-term trading opportunity to take advantage of, as they are more volatile than BTC.
Therefore, the answer to what Bitcoin to buy is this:
If you’re going to buy and hold for the long term, you should buy BTC.
If you’re a trader, who buys and sells with a shorter time frame, you need to analyze the price of the different Bitcoins and figure out which is cheaper right now.
I’m NOT a financial advisor. This is nothing more than my OPINION and should be regarded as educational and entertaining content. Please, base your investment decisions on your own research, and recognize the risks involved. Don’t sue me, please 😉
Are You Invested In The Crypto Market?
Then you need to check out my free guide!
There are ways to increase your returns, without investing more money. I write about four of them in this guide: