Bitcoin's ties with physical products is what makes it so valuable and many people miss this

Crypto is at a point where it needs to build new revenue streams to become vastly sustainable but most of the projects within the ecosystem fail to realize how the most valuable cryptocurrency built an ever rewarding revenue stream for itself from the ground up.

Bitcoin is not just a cryptocurrency, bitcoin is a network. Bitcoin is not just some boring computer program, it's an energy intensive software.

A lot of people keep talking about how bitcoin needs to cut down its energy usage blah blah blah, some even propose moving to proof of stake, I believe this was largely debated during the Ethereum migration from POW to POS.

First off, Bitcoin's intensive use of energy is what makes it valuable in the first place. We are talking about the very layer that powers the network, without miners, there's no bitcoin.

Now this doesn't mean that every new crypto ought to follow its footsteps by settling for POW as a consensus mechanism, no, many have already done this and have had no close of an impact - it's a coming late to the game sort of scenario.

The Cost Vs The Reward Of Bitcoin Mining

Bitcoin mining is expensive, this is no news, some miners report profits and others losses, it's only normal for this to be the case because they are all after the same thing - Bitcoin block rewards and transaction fees.

Every system, no matter how vastly rewarding it is, is not expected to be rewarding to all at the same thing, this is impossible, and quite frankly unsustainable.

Whilsts the rewards are generally a handful, the system has to build to a place where competition sweeps in and the cost becomes just as great. 900 BTC is mined daily on average, that's $40 million+ at current prices, surely the network after these rewards ought to be large to make its value sustainable.

Competition, they say, builds character, hence, good for business. Bitcoin thrives on this. Whilst there ought to be some sort of balance between cost and rewards, the more costly the entry is for the rewards, the more value the network can attract.

Cost forces development to take place. And development brings more value to the network. The fact that Bitcoin mining is expensive due to the heavy hardwares it requires will forever be a reason why more developments come forth. This includes miners searching for strategic ways to stay in profit and individual business developers looking to seize the opportunity and deploy a functional product on top of the network.

This is how the lightning network was born, and there's far more to come.

Bitcoin ties with physical products is simply down to its consensus algorithm, the very layer that creates new bitcoins, earns participants gas fees and enables the network function.

Bitcoin incentivizes hardware manufacturers and that very relationship will make it a tech people would constantly want to improve.

Real world ties are how to stay sustainable. Crypto projects looking at RWA or investments are going to be giants of the ecosystem moving forward. The digital space is already vastly saturated with virtual products and services, it's important we don't forget where the actual value comes from at the end of the day: the real world.

Posted Using InLeo Alpha