The 1 cryptocurrency I would buy right now

The cryptocurrency market, once approaching $3 trillion in value, is facing a rude awakening. Major firms in the industry fail, causing investors to lose confidence and complete withdrawal of their holdings (if they are even able to do so). The important question now is which digital assets are worth owning, if any.

The only cryptocurrency I wanted buy right now is Bitcoin (BTC -1.75%). Here’s why.

Simplicity is the key

Many crypto enthusiasts are in love with the promise of another popular cryptocurrency such as Ethereum. Ethereum’s key innovation was the introduction of smart contracts, which are self-executing computer programs that run when two parties satisfy the end of a particular transaction. Bulls believe this technology has the potential to disrupt major industries, financial services being at the top of the list.

Cardano is another smart-contract cryptocurrency that powers a proof of effort system that tries to compete directly with Ethereum. Cardano also has a very thorough and complex development structure, with five separate phases in its pipeline. Again, both Ethereum and Cardano could be used by individuals and institutions on a daily basis a decade from now for a variety of use cases.

But the number of complicated upgrades needed for Ethereum and Cardano, with surely more updates added to the mix in the future, creates tons of room for error. And the “completed” versions of these blockchains may look much different than what many people think they will be.

Bitcoin, on the other hand, is incredibly simple. And this is entirely by design.

Bitcoin was created during the Great Recession as a way for two unrelated parties to send and receive money to each other electronically without an intermediary. And the supply will be limited to 21 million coins. That was it. This is the basic knowledge any beginner needs to understand it. There are certainly some implications for these properties of Bitcoin (discussed below), but this is the most important information that investors should know.

Bitcoin is completely different from all other cryptocurrencies out there and that’s exactly why I like it. There is really no room for a central authority to change the direction of the network, and malicious actors have yet to hack it. The network’s simple layout was created on purpose. I see this as a feature, not something Bitcoin lacks.

To be clear, I also don’t fully understand the technical intricacies of Bitcoin, but I am much more comfortable with it and its capabilities than other cryptocurrencies. And I think the stability deserves a prize.

A better form of money

At a high level, Bitcoin has the potential to change the very nature of money, which has three functions. Money must be a store of value, a medium of exchange and a unit of account. Throughout its history, and likely for the foreseeable future, Bitcoin is gaining ground as a legitimate store of value.

This leaves gold as an apt comparison. For thousands of years, the shiny precious metal has been seen as a safe place to park your wealth. It has some industrial uses, but gold is primarily used in jewelry and as an asset to hold, so its value is derived from the fact that other people think it’s worth something. Why can’t Bitcoin be seen the same way?

Bitcoin has key properties that actually make it a better store of value than gold. Bitcoin can be easily transported across national borders. One Bitcoin is divisible by eight decimal places. Bitcoin can be used in transactions. And most importantly, Bitcoin is absolutely finite. Once 21 million coins have been mined, no more can be created.

While Bitcoin is more portable, divisible, transactable and finite than gold, gold has a much longer history. But I don’t see why in a world that’s only going to get increasingly digital, Bitcoin can’t start cutting into gold’s $12.5 trillion worldwide market cap.

Whether Bitcoin satisfies the properties of medium of exchange or unit of account is yet to be determined. And we may not know until a decade from now (at least). But even if Bitcoin’s only true use comes from it being a new way for individuals and institutions to digitally store wealth, I still think the upside is massive, especially after its price has cratered 75% since its peak 13 months ago.

This makes it the only cryptocurrency I would buy right now.