Is buying Bitcoin and ETH similar to buying the internet in the 90s?

Crypto enthusiasts think that investing in cryptocurrencies right now is like buying the internet in 1996, a huge comparison to nascent technology. Manhattan is believed to be a prime property; people spend billions on a piece of land. Imagine if someone bought the whole island when there was nothing; now he would be the richest man.

Is now the best time to invest in cryptocurrencies?

Satoshi Nakamoto released the Bitcoin white paper on January 3, 2009 and the world has changed forever: the people who have invested and held their investments since then are among the richest now. To better understand how investing in cryptocurrencies relates to buying on the Internet, we need to consider the mid-1990s era.

Facebook (Meta) will arrive after eight years, Apple Inc. is on the verge of bankruptcy, Microsoft is still the king of desktop operating systems, Amazon is a tiny online book store, Netflix has just started a mail order DVD rental service , and Google is just a research project at Stanford University. Everyone knows where these giants are now, changing the face of technology and getting rich at the same time.

Cryptocurrencies are believed to be on the rise, giving advisors less time to react. Lack of regulatory infrastructure, events such as the FTX saga, the crypto winter and the collapse of the Terra ecosystem, along with numerous hacks, exploits and frauds. These scenarios have diminished retail investor confidence, and only high net worth individuals or those foolish enough to resist are bullish on cryptocurrencies.

With the world economy going through its most problematic phase in decades, cryptocurrencies are a viable option. The main goal behind the emergence of cryptocurrency was to provide an alternative financial system, remove middlemen from the equation and transfer power to the masses. The cryptocurrency industry has faced its fair share of criticism, but is now garnering interest from nearly every section of society.

How is investing in cryptocurrencies synonymous with buying on the Internet in the 90s?

A technology investor in 1990 would have Netscape, Lycos, Excite, Microsoft, etc. in his portfolio. But as most are no longer functional, the investment has gone up in smoke. It took years for Google to surpass Microsoft’s market capital. Currently, Facebook, Amazon, Apple, Netflix and Google (Alphabet) or FAANG stocks are believed to be the best in the long term.

Instead of investing in either company, investors would buy the Internet Protocol. The base layer that these companies operate on would make the investor immensely powerful if owned by one person. Companies would either buy the protocol or pay hefty rent to use the technology.

Similarities Between Bitcoin and Internet Protocols

Similarly, investing in cryptocurrencies like Bitcoin and Ethereum would be like investing in internet protocols like TCP/IP and HTTP. These Internet standards are considered to be lower-level standards that facilitate secure data transmission over the Internet. Furthermore, they serve as the basis for complex applications at higher levels.

Bitcoin and Ethereum are similar to these protocols. Even if these are Layer-1 solutions that facilitate the transfer of funds over the network. But they also serve as a basis for building complex protocols, decentralized applications (dApps), smart contracts, etc.

As the demand for these complex top-level applications increased with the advancement of the Internet, the underlying layers became extremely valuable and essential. Similarly, with continued progress in the cryptocurrency industry, the Ethereum and Bitcoin blockchain serves as the foundation for current and future applications. Their value could increase immensely in the future.

The protocol standard of Bitcoin and Ethereum would serve as the building block for future applications. Experts argue that Bitcoin may not allow for such development, but the same thing was initially said for TCP/IP or HTTP.

In 1994 the internet was weird and scary; only enthusiastic, tech-savvy people were excited about it. The same is the current scenario for Bitcoin; it’s weird and scary and only a select number of people are excited about it. Since the 1990s, many Internet companies have disappeared and only the strongest have survived the bursting of the dot-com bubble. Likewise, only a few survived the cryptocurrency winter, and they may soon be more than what people believe they are.

Steve Anderson
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