In the second instalment of our Busting Myths series; Gabriel Carey of Cadre Capital Partners and Ryan McMillin of Merkle Tree Capital discuss and debunk the myth that all kinds of cryptocoin are the same.
Gabriel Carey: (00:05)
Ryan, we’ve received a number of questions around cryptocurrency. All the different names: Dogecoins, Solana, Ethereum, Bitcoin. But they’re all essentially the same, at least that’s what the perception is. Could you expand on your view as to whether all cryptocurrencies are the same?
Ryan McMillin: (00:22)
Yeah, so the inferences that Doge, or SHIB, or whatever the latest coin is, is just a copy or a rebranded version of Bitcoin, whose creators are looking to make a quick buck is true of the current 10,000-plus coins. A lot have very limited utility and are completely uninvestible, but you do need to look a little closer. There’s a diverse ecosystem of currency, stablecoins, smart contract platforms and layer 2 applications.
Ryan McMillin: (00:47)
Bitcoin, for example, is a blockchain that represents a pure custody play as a counterparty-free payment system, with its own monetary policy pre-programmed in Ethereum, Solana, Avalanche, are all smart contract platforms, each with their own blockchains. Their blockchains are a little more sophisticated than Bitcoin and can hold more than just transactions in terms of data. Each one of those platforms has different pros and cons and can be optimized for different use cases. Sitting on top of these smart contract platforms are layer 2 applications, and these are not new blockchains, but rather applications that leverage the underlying blockchain. The application could be a game, decentralized finance, or Web3 protocol.