This is another important difference between a network like Terra and Bitcoin: while in the former a minority of entities that can vote on things like halting the network, Bitcoin’s true decentralization makes it immune to the whims of any specific group.

Terra’s UST sought to become a stablecoin whose minting and burning process was performed programmatically by a computer program – an algorithmic process.

Terra grew in awareness among the Bitcoin community after Terraform Labs founder Do Kwon said earlier this year that the project would acquire up to $10 billion of bitcoin for the reserves of UST.

LFG’s move represented the first major BTC allocation as a reserve asset by a cryptocurrency project.

The lesson learned from this is: alternative cryptocurrency projects (altcoins) are but an experiment, while Bitcoin is the only tried and tested peer-to-peer digital money.

While those coins initially were born to compete with Bitcoin, a whole new slew of projects later began to emerge with different value propositions while putting their own spin to the blockchain, consensus and cryptography that made Bitcoin work.

Altcoins have mostly drifted away from PoW to favor other novel consensus mechanisms. The most popular alternative, PoS, allows participants to lock their holdings of the given project’s native token to become block creators instead of letting them compete with mining hardware and electricity to mine new coins.

While PoW brings real-world costs to miners, costs in PoS are merely digital and represent the amount of money spent to buy those coins being staked. The assumption with PoS is that staking those coins ensures miners have skin in the game and are hence encouraged to behave honestly, but there is no evidence that such commitment is enough of an incentive.

In cases where a strong devaluation happens as with LUNA, the network risks being hit with a governance attack and may find itself having to take totalitarian actions like halting block production of what was supposed to be a permissionless and unstoppable decentralized network.