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Bitcoin’s Market Dominance Is Decreasing, and That’s OK

I wanted to take the time to write a quick response to many of the sensationalized pieces that have been coming out about Bitcoin and cryptocurrency lately. Cryptocurrencies have been on everyone’s mind lately, and even though there are clear signs of more widespread adoption, the headlines still seem similar to before. Bubble concerns and fears of criminal use are commonplace, but a newer one I’ve been seeing is “Bitcoin is losing its dominance in crypto’s market cap.” To that I say “good,” and here’s why.

Bitcoin dominance index decline is a good thing

Contrary to what these headlines would have you believe, if any asset were as dominant in the market capitalization of traditional markets, there would be public outcry and trustbusters at the door. That degree of dominance in other asset classes would be intolerable, and for good reason. Such monopolies mean these assets, companies, and products can get lazy because there is no rush to improve. While I deeply love Bitcoin, it is far from perfect. Anyone saying otherwise is being willfully ignorant.

However, Bitcoin and cryptos in general are a completely new asset class that play by their own rules. They don’t behave like ordinary assets, and their markets don’t close or stop trading because of some bell. As such, even when new coins enter the market every day, rather than stealing money from Bitcoin or other alts, they simply seem to add to the industry’s overall market cap. We saw this with the Bitcoin Cash and Gold forks. They didn’t take value away from Bitcoin, but rather made their own. Mind you, this does not mean that there is not fierce competition among altcoins.

In fact, when Ethereum and Ripple were both clawing away at each other to fight for the #2 spot in all of crypto, I kind of wished that something could begin to approach Bitcoin that way. Markets thrive when its users have ample and meaningful choice. Choices have to be more than a random ticker from a basket, so different assets and companies all scramble to offer some sort of innovation. It is this kind of competition that makes markets move.

This is why, even if only slowly, seeing Bitcoin starting to lose that dominance is not bad. To the contrary, it is exciting. It means that there is competition among various cryptocurrencies all vying for users based on new features and other innovations. While I still believe Bitcoin will be king for at least my entire life, I would not be surprised if we see its market dominance continue to slip. Again, I think this is a good thing.

So the next time you see a headline from a media outlet claiming that Bitcoin is losing its foothold in the cryptocurrency marketplace, remember that it is because there are now opportunities elsewhere in cryptocurrency, and not because people are losing faith in Bitcoin.

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Typing Errors in Ethereum Transaction Addresses Caused Losses of Over 12,600 Ether

There is nothing worse than losing funds stored in your crypto wallet. It is pretty obvious that this situation has been a big problem for most users at some point in their lives. A new study shows that over 12,000 ether has been lost due to typing errors that sent money to non-existent addresses. Losing Ether due to Typos There are a lot of things that can go wrong when completing cryptocurrency transactions. For instance, one could enter a completely wrong address due to copying it incorrectly, a QR code could give an error when trying to send money, or one could simply type an address incorrectly. In the latter case, one’s money will be lost forever, as the transaction is often broadcast to an address that doesn’t even exist. Recovering such a transfer is pretty much impossible these days. Research by Alethio Analytics paints a very worrisome outlook in this regard. More specifically, the company claims a lot of ether has been lost due to sending money to nonexistent addresses. It is evident a lot of users have sent money to wrong addresses over the years, and it is possible that up to 12,622 ether has been lost because of typing errors. This is not a figure most people will feel comfortable with whatsoever. Although the exact amount of money lost is subject to interpretation, Alethio Analytics can make some sort of assumption in this regard. After thoroughly analyzing Ethereum’s external and contract accounts, it’s clear there have been quite a few wrong transactions up to network block 5 million. Although it is difficult to determine which addresses are perfectly fine and which are not, the team used an interesting technique to do so. Since no similar-looking Ethereum addresses can exist, they looked at Ethereum addresses which are almost identical. Assuming such addresses exist, the funds stored in one of two addresses were probably sent erroneously. It is not a foolproof technique by any means, but it is certainly one way to go about things. So far, the company’s research seems to indicate that over 2,600 erroneous addresses have been used as part of Ethereum transactions over the years. This means just over 12,622 ether are potentially lost forever, although this number is not exact. Considering that the value of ether has risen over the years, it is safe to say this money adds up to a nice chunk of change. Who this money belongs to exactly remains to be determined at this stage. The bigger question is whether or not more of these typos will occur in the future. Since there is no foolproof way to send cryptocurrency transactions in this day and age, we can only hope people become a lot more careful when it comes to moving funds. Otherwise, this may only be the tip of the iceberg in terms of money lost forever due to human error.

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