Can Bitcoin Stay Number One? What the Kodak Analogy Gets Right and Wrong

A product can have fewer features than its competitors and still command the strongest demand. People do not buy every product for the same job. That is the first problem with the claim that Bitcoin has hardly any use cases: it discounts the uses its owners actually value, then treats a longer feature list as proof that another asset should win.

Bitcoin's long-term position is a legitimate question. Its current or historical leadership is not a promise of permanent leadership. But comparing it with Kodak works best as a warning about assumptions, rather than a forecast that a decentralised monetary network must follow the path of a film company.

Define number one before predicting it

Number one can mean the largest market capitalisation, deepest liquidity, greatest payment volume or widest use in applications. Those rankings need not agree. This article examines the durability of Bitcoin's monetary and investment position; it does not claim a verified live dominance percentage or predict a date when another asset overtakes it.

Market capitalisation is price multiplied by circulating supply. It is not the cash invested in an asset, nor the cost of replacing the network. A market can reprice an existing stock of tokens without an equivalent amount of new money entering. Comparing that value with a company's revenue or a payment network's settlement volume requires care.

Bitcoin has a narrower proposition, not no proposition

The store-of-value thesis is a real use case, even if its success remains contested. Supporters value a monetary asset with rules they regard as difficult to change and no single issuer responsible for redeeming it. Bitcoin can also be transferred and used for payments. Its price volatility makes those jobs harder for someone whose rent, payroll and taxes are denominated in local currency.

Lightning adds a payment-channel approach intended to support faster payments without putting every individual transfer directly into a base-layer block. The original Lightning paper explains that architecture. Channel liquidity, routing and custody choices still affect the user experience. An off-chain payment system is additional operational machinery, not a magic removal of all settlement constraints.

Institutional access is another source of durability. The SEC's January 2024 statement on spot Bitcoin ETP approval documents a regulated route for investment exposure in the United States. Approval was not an endorsement of Bitcoin's investment merits. It nevertheless changed how investors could access exposure through familiar market infrastructure.

An investor buying a fund share is not necessarily using Bitcoin to pay a supplier. That does not make the investment channel imaginary. It means the demand is monetary and financial rather than a count of commercial invoices settled on the underlying network.

What Kodak actually teaches

Kodak knew something about digital photography. Its corporate milestones record Steve Sasson's invention of a digital camera in 1975. The popular story that the company simply failed to notice digital technology is therefore inadequate. The harder problem was adapting a business associated with film, processing and prints as the economics of photography changed.

The useful analogy is about incentives. An incumbent can understand the new technology while struggling to replace the profitable activities supporting its existing organisation. Recognising change is easier than financing it, restructuring distribution and accepting that old revenue may disappear. That is an analytical lesson, not a claim that one decision explains Kodak's entire history.

Bitcoin has incumbency effects of its own. Holders may favour monetary predictability over greater functionality, while infrastructure businesses have invested in the existing network. Those incentives can support stability or delay desirable change, depending on what the change does. The question is whether users continue to want the product that stability protects.

Where the analogy breaks down

Kodak was a corporation with managers, employees, shareholders and a business model that could be measured through revenue and profit. Bitcoin has no equivalent board able to approve a corporate pivot for the entire network. Miners, developers, node operators, investors and service providers have different interests. Adoption of a change is a coordination problem across participants.

Bitcoin also does not promise that owning the asset entitles the holder to a share of business earnings. XRP likewise is not a share in Ripple. Comparing token prices as if they were valuations of two operating companies overlooks that difference. A useful network and an attractive investment are related possibilities, not interchangeable conclusions.

Digital photography displaced film for many familiar purposes. Crypto networks can coexist because their users pursue different purposes. Someone can hold Bitcoin as a monetary asset, use Ethereum applications and settle an invoice with a stablecoin. The existence of the latter two activities does not prove the first has become obsolete.

The strengths that can defend leadership

Brand recognition and familiarity reduce the work of explaining an investment to a committee. Deep markets and established custody arrangements can make an asset easier to buy, finance and report. These advantages can reinforce each other: greater participation can attract more infrastructure, which makes further participation easier. They are network effects, although none makes demand indestructible.

Limited programmability can also be a deliberate preference. A person seeking a relatively conservative monetary system may not want constant feature expansion. More expressive application systems create opportunities, but also additional surfaces for software errors and business risk. Comparing Bitcoin with Ethereum on programmability alone assumes all users want the same trade-off.

XRPL has payment and exchange capabilities aimed at a different set of problems. Its cross-currency payment documentation describes how conversion can use available liquidity. Whether that makes XRP more valuable depends on the routes chosen, balances held and economics of the demand. A successful payment rail need not displace Bitcoin's investment proposition.

What could weaken the position?

Leadership becomes vulnerable if users stop valuing the attributes that sustain it. Weakening confidence in security, expensive access, poor usability or a stronger competing monetary proposition could change behaviour. Institutional demand can also reverse during changing market conditions. A well-known asset does not acquire immunity to financing costs or risk aversion.

For Bitcoin, the decisive test is broader than transaction speed. For a competing asset, the decisive test is broader than announcing utility. Investors need evidence about persistent demand, holding requirements and how supply meets that demand. Payment volume that passes through an asset for seconds is different from capital held in it for years.

Bitcoin can remain highly important without winning every application category. It can also lose leadership without literally disappearing. The Kodak lesson is to examine changing customer needs and incentives; the limit of the analogy is that Bitcoin is not a film manufacturer with a management team refusing to launch the next camera.