One question I would like to see answered over the next 10 years as I go deeper into the world of crypto: Does the simplest narrative win?
Take Bitcoin. Bitcoin’s narrative is very simple. No one thinks that it will ever be a viable currency due to its scalability issues. So it’s narrative, that has not changed for the last few years, is that it is a replacement for gold as a store of value.
As long as enough people replace gold with bitcoin or buy bitcoin, which will happen more and more as third world countries suffer from authoritarian governments, we will see bitcoin hold its value.
Also think about it: If you want to hold a token as a store of value you would want the underlying infra to remain the same. You don’t want changes happening all the time like in case of Etherium. So the fact that Bitcoin is boring might be a feature and not a bug.
Note that I am talking about storage of value and not growth of value. No one expects their gold price to swing much. People are holding gold for value protection and not for crazy returns. I expect people holding Bitcoin to do the same.
Now compare it with other projects in the world of crypto. Etherium is skyrocketing in popularity because the use cases on Etherium have gone up in recent times. Everyone is talking about the possibilities with Etherium: NFT, Defi, Metaverse. As long as people care about one of these use cases and that use cases grows, the value of Etherium (both the chain and the token) will grow.
But say what if 5 years down the line the narrative changes from Etherium is secure and decentralised and hence it is not great to it is not scalable. What if people start thinking that decentralisation does not matter as much as scalability. Then you can argue that Solana with having 1000 validators but far higher scalability (50,000 transactions per second) and cheaper transaction fees is better than Etherium.
What if the dev ecosystem and along with NFT and Defi users move from Etherium to Solana. Will the value of etherium erode? Will its price crash?
As more and more use cases come and go, the narrative becomes more complex. Etherium’s narrative is far more complex than Bitcoin’s. It can be a good thing or bad. Only time will tell.