In any market, there is, at first, a dominant leader. AT&T controlled telephones and long distance for decades. Ford was the first name in cars when the assembly line appeared. Kleenex was so common it lost its right to be a brand name. The same is true of bitcoin. When you discuss digital currency, bitcoin is the first thing everyone pictures. However, that kind of brand dominance cannot last forever, and that is when “The Flippening” will occur.
The Flippening is the belief that at some point bitcoin will lose its dominance in the altcoin sphere and its number one position will be “flipped” with another altcoin. It seems absurd to some, just like the idea that AT&T would ever be forced to surrender its control of long distance. But it is certainly possible. Bitcoin is expensive, restrictive, and designed as a political experiment. Compare that to Ethereum, which is less interested in being a financial instrument than a method to buy and sell a commodity, in this case, CPU cycles, or Ripple, which is an attempt to use altcoins to speed up currency exchange transactions, and bitcoin’s dominance feels a little less certain.
That could have enormous implications for investors, as bitcoin’s value is driven largely by investor faith in it. Alternatively, it could simply mean that the altcoin evolves into a tool for solving problems and bitcoin shifts to a different role. Just do not expect the Flippening to happen all at once, if it happens at all. Altcoins are still being pioneered, and their role as investment vehicles and tools is still an open question. Want to learn more? Subscribe to the Bitcoin Market Journal newsletter!
