Bitcoin (BTC) is fundamentally distinct from any other digital currency. Furthermore, according to digital asset-focussed financial services provider Fidelity Digital Assets, no other digital asset is likely to surpass bitcoin as a monetary good.
According to its most recent statement, Fidelity Investments' subsidiary asserts that BTC is the "is the most (relative to other digital assets) secure, decentralized, sound digital money and any 'improvement' will necessarily face tradeoffs." For example, enhanced speed or scalability would result in a reduction of another feature, such as decentralization or security.
According to the study's authors, non-Bitcoin initiatives should be evaluated using a different lens than BTC, as the rest of the crypto ecosystem can address different needs and issues that bitcoin cannot.
According to Fidelity, BTC is best understood as a monetary good and will most likely function as “the primary monetary good and another digital asset is not likely to supersede bitcoin in this role".
The study also compares BTC to Ethereum (ETH), the second-largest cryptoasset in terms of market capitalization.
“While Ethereum may be viewed by some as a superior or more advanced network compared to Bitcoin, the additional capabilities and flexibility come at a cost, most notably a more complex network that increases the chance for software bugs as well as less decentralization and potential decline in security,” according to Fidelity Digital Assets.
The ETH network, in contrast to the BTC network, is quick and responsive to user demand, but it is also more centralized and costly, according to the document.
The company believes that investors who aren't familiar with bitcoin will typically try to fit it into a technology investing framework, which leads them to the conclusion that as a first-mover technology, bitcoin may be easily replaced by a superior crypto or provide lower returns. The report concluded:
"[BTC’s] first technological breakthrough was not as a superior payment technology but as a superior form of money. As a monetary good, bitcoin is unique. Therefore, not only do we believe investors should consider bitcoin first in order to understand digital assets, but that bitcoin should be considered first and separate from all other digital assets that have come after it.”