Returns, a poisonous word when it comes to a currency. Do you hold your fiat in your pocket expecting it to “100x” anytime soon? At most you invest it, looking for returns.
Money does not yield profits by itself. That is why DeFi is so popular, and the reason you might be wondering why you bought Bitcoin instead of YFI.
Bitcoin vs YFI
If you are looking for returns, you should not buy Bitcoin. Satoshi Nakamoto did not create a form of P2P yield-bearing asset. Cronje on the other hand, created YFI as a mechanism to allocate profit to holders.
The fundamentals of each project reflect these diverging goals:
- Bitcoin relies on its own blockchain, mining and other mechanisms to make the system decentralized
- These mechanisms allow Bitcoin work in a predictable manner as a medium of exchange
- There is no doubt that BTC works as advertised
Cronje’s YFI on the other hand:
- Relies on Ethereum
- Has mechanisms in place that allow it to function as a dividend-yielding or profit-sharing instrument – despite assertions that its financial value is 0
- Was built to have a very small supply, creating the kind of scarcity you would expect from a company issuing shares on the stock exchange, rather than the kind of supply you are looking for in a non-inflationary medium of exchange
- Works as advertised as long as yield farming keeps on “creating” profits
Radically Different Assets, Converging Expectations
So, why would anyone compare these assets at all? Due to the following reasons:
- It is easy to conflate all kinds of cryptographic digital assets with Bitcoin, but that is a mistake
- BTC appreciated in terms of fiat, going from a few cents to almost $20,000 USD at its peak
- Despite the ICO debacle, there are people out there who are still looking for “the next Bitcoin”
The only thing that is remotely comparable when talking about BTC and YFI – apart from the fact that they are both listed on cryptocurrency exchanges – is that their creators never promised profit to anyone.
Yet, Cronje designed YFI as an instrument of governance that does deliver profit. Nakamoto was thinking about an exit from the fiat world instead of replicating its problems with a decentralized digital asset.
What to Expect When you Buy Bitcoin Then?
Maybe you are asking yourself, what should I expect when I buy Bitcoin? If you are looking for profit, there are better choices out there without a doubt. That is mainly because you are defining profits in fiat. If that is the case, you are doing what Satoshi wanted us to avoid.
Fiat depreciates constantly – it is inflationary. Therefore, people should look to invest to maintain the purchasing power they have. Those who do, look to trade their fiat in for other assets, like YFI, be it via cryptocurrency exchanges or the stock market.
Bitcoin doesn’t appreciate or yield any returns to protect you from inflation. It instead shows you that an alternative, decentralized, and scarce currency, can work.
Think of it as the currency of a parallel world. If you do not think you can derive any advantage from gaining access to this parallel world, it makes no sense to buy or hodl it.
You could even take it a step further. Buy Bitcoin and run a full node. Be part of this parallel world that guarantees the neutrality of money, freedom of speech, and the freedom to do business with whomever you want whenever you want.
Don’t get swayed by the prices. None of the options are mutually exclusive
Just remember that it is easier to manipulate the price of a small cap asset like YFI than the price of BTC.
Bitcoin Might Require a Deeper Commitment
Bitcoin may also require a deeper commitment than having a YFI token. Voting on anything that has to do with a profit-seeking activity that may or may not exist in 6 months, is easier than running a node, for example, and standing shoulder to shoulder with other people that you don’t know to protect freedom. But the rewards of the latter are far greater than the profit you might get from the former.
In the meantime, if you bought Bitcoin and you are asking yourself “now what,” stop and think about the long-term. This is a marathon, and the fastest car doesn’t always get to the finish line – yes YFI holders, you might be driving faster but your ride could be shorter than you expect.