Matthew Goetz, a former Goldman Sachs vice president, founded BlockTower Capital this year. Frank Chaparro

The cryptocurrency market has exploded this year with over 1,000 digital currencies now on the market.

The price of bitcoin, the first and largest cryptocurrency, has captured the most attention, with Wall Street CEOs from JPMorgan's Jamie Dimon to Goldman Sachs' Lloyd Blankfein weighing in on the coin this month alone.

It's up over 350% this year at near $4,400 per coin.

But bitcoin's meteoric rise doesn't mean that it'll be the top-dog crypto forever.

Matthew Goetz, a former Goldman Sachs vice president and cofounder of BlockTower Capital, a Connecticut-based crypto hedge fund, recently told Business Insider that bitcoin and other cryptocurrencies are technologies like any other, and as a result, are susceptible to being usurped by a digital currency with superior tech.

"Bitcoin is the most entrenched, it has very stable protocol, it doesn't change a lot, and it has a very strong developer base, but at the end of the day it is still software," Goetz said. "There is some chance that something an order of magnitude better than bitcoin, technologically, could come along."

Bitcoin is up more than 400% this year. Markets Insider Kind of like how Facebook replaced MySpace as the go-to social media site.

To be sure, Goetz said a bitcoin rival can't just be slightly better. Bitcoin's massive scale would require the hypothetical coin to have substantially better capabilities.

Here's Goetz:

"It's something like Facebook. If someone creates a new Facebook that has slightly better features, say 10% better. That's great, but network effects are strong. So, that new thing isn't going to kill Facebook."

Bitcoin isn't the only crypto that has to worry about competition.

Ethereum, which has been touted as a bitcoin rival, operates in a slightly different space, according to Goetz. Bitcoin was built to be a currency, whereas Ethereum is a blockchain platform on which other applications can be built.

"Ethereum is competing on features and now has four competitors," Goetz said. "And it's all about who has the most cutting edge cryptographic technology, who can build features the fastest to make developers come build their smart contracts and decentralized applications on top of those platforms."

Smart contracts are a computer protocol based on Ethereum's blockchain technology that facilitates and enforces a contract or exchange. Just because the developers of Ethereum were the first to introduce this technology to the market doesn't mean they will win-out in the long run, according to Goetz.

"If you look at other industries across history, there's a real chance that just because the first mover got out there doesn't mean that that's the one that ends up ultimately winning and capturing all the value," he said.

"For some cryptocurrencies that are in a more competitive space, like decentralized file-storage, there are a number of projects attacking that," he added.

And there are incumbents, he says, such as Amazon Azure and DropBox.

But it's still early days. Goetz says if you liken cryptocurrencies to the internet, then we are still in 1992. Just like bets during the early days of the internet were risky, so too are bets in the crypto market today.

"You could be right on the thesis that cryptocurrencies are transformative and you could make what you think is the right bet at the time, but remember one time you had Yahoo and then this thing called Google came along," he concluded.