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Bitcoin is the first cryptocurrency of its kind and is widely referred to as the main currency in the cryptocurrency space. For this reason, all other cryptocurrencies are collectively referred to as altcoins.
However, as the convergence of the digital and physical worlds continues to emerge, more cryptocurrencies and digital asset types are emerging. The following discussion will examine whether Bitcoin can survive the long-term and stay relevant as the cryptocurrency industry continues to evolve.
Is Bitcoin here to stay or just a fad?
The primary narrative in the cryptocurrency community is the provision of decentralized financial (DeFi) systems. In terms of this narrative, Bitcoin is the undisputed gold standard. Bitcoin is a new financial system that cannot be controlled or manipulated through politics or human greed – fair and transparent money for a divided world. It is not designed to buy coffee. It is designed to be the next global reserve currency.
Technically, Bitcoin is the most decentralized cryptocurrency in the world, and the largest cryptocurrency by market capitalization. Furthermore, Bitcoin is the only leading cryptocurrency that has an anonymous creator, pure organic growth and has been tested multiple times, resulting in it being the most efficient cryptocurrency in the market.
In short, Bitcoin is very unique. The biggest difference with Bitcoin and other cryptocurrencies is what Bitcoin stands for in terms of shifting power from a few to as many people as possible.
What is bitcoin?
Bitcoin is a Layer 1 blockchain, a type of project that represents the underlying network or infrastructure in a blockchain-based financial system. Layer 1 blockchains can finish and verify transactions without the help of another network. They also have their own token, which is used to pay transaction fees.
Bitcoin is a form of digital currency and is used by many as a speculative store of value. It is decentralized, meaning that there is no central authority controlling it. Instead, Bitcoin is powered by thousands of computers distributed around the world. Although not accepted as legal currency in most parts of the world, Bitcoin is popular because it cannot be monitored, has a limited supply of 21 million and allows transactions to be made by anyone, anytime and anywhere.
Like most cryptocurrencies, Bitcoin is backed by a technology known as a blockchain – a decentralized distributed ledger that records the origin of a digital asset. The blockchain secures cryptocurrency transactions by creating incentives to make tampering unprofitable for malicious users. The implication is that crypto ownership is held probabilistically by unreliable enforcement, as opposed to certainty.
From an investment point of view, the closest thing Bitcoin can be compared to is digital gold. Bitcoin can be considered a super speculative commodity, with a value proposition based on it being a rare, portable, immutable and divisible savings technology.
These factors mean that Bitcoin can remain largely unaffected by factors that can affect its value such as inflation, control, and monetary policy failures. Bitcoin is not dependent on a central bank; Instead, it is managed by programmed algorithms that govern in a decentralized and democratic manner.
History of BTC
Bitcoin developed out of the turmoil of the 2008 Great Recession as distrust of central financial institutions grew. An individual or group of people called Satoshi Nakamoto issued a white paper to address centralized control of money and the required trust that citizens put in the hands of central authorities.
The purpose of Bitcoin was to bypass the middleman in financial transactions, reduce costs, improve efficiency and increase financial accessibility.
On January 3, 2009, the Bitcoin blockchain was launched when the first block, widely referred to as the genesis block, was mined. In the first few months, Bitcoin had no real cash value. However, about a year later, the first economic transaction took place when a Florida man negotiated two Papa John’s pizzas, worth $25, for 10,000 bitcoins on May 22, 2010. This bill created the first real-world initial price of Bitcoin (BTC) By 4 Bitcoins per cent.
Fast forward today, and this amount of Bitcoin is estimated to be worth about $400 million. This popular day is referred to as Bitcoin Pizza Day (May 22) by crypto enthusiasts around the world. Since it first became available on exchanges in 2010, BTC is now listed on over 600 exchanges around the world.
Pros and Cons of Bitcoin
Despite Bitcoin’s sterling reputation in the cryptocurrency space, Bitcoin also shares its mix of strengths and weaknesses compared to other cryptocurrencies.
- Most decentralized cryptocurrencies
- Strong reputation, tangible goal and global recognition
- A higher level of trust and stability than many other cryptocurrencies
- Proof of Work (PoW) mining is not environmentally friendly
- Serious scalability problems
As a Layer 1 blockchain, Bitcoin’s biggest competitors are other Layer 1 blockchains such as Ethereum. All competitors aim to solve the blockchain trilogy (scalability, security and decentralization) more effectively than Bitcoin. However, while Bitcoin is the most decentralized blockchain, competitors easily outperform Bitcoin in terms of functionality and scalability.
Bitcoin’s biggest competitor is Ethereum, the second largest cryptocurrency by market capitalization. You can think of Ethereum as a global public shared computer network. It does not run on a single device but instead runs simultaneously on thousands of devices around the world. People all over the world contribute the computing power of their computers to the network and are paid to do so.
Unlike Bitcoin, the Ethereum blockchain enables developers to create and run decentralized applications (dApps) which is faster than Bitcoin. This goal is achieved by using smart contracts, allowing users to interact and develop dApps that cannot be monitored or locked out. For this reason, Ethereum is generally referred to as a decentralized computing platform or a decentralized internet.
In addition to Ethereum, other competitors include Solana, Cardano, and Polkadot, all aiming to differentiate themselves from the other first layer by addressing the blockchain conundrum in a more efficient way.
How to make money with bitcoin
Apart from buying BTC at one price and selling at a higher price, you can make money with BTC through interest earning platforms like Coinbase.
However, it is important to note that you cannot earn BTC from staking because Bitcoin does not use a Proof of Stake (PoS) consensus mechanism like Layer 1 blockchains like Ethereum or Cardano.
How to buy Bitcoin (BTC)
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- Many cryptocurrencies and altcoins
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BTC can be traded on major exchanges like Coinbase Global Inc. (NASDAQ: COIN), Gemini, Crypto.com, and eToro. Many of these platforms allow you to buy Bitcoin with your credit card, through swap features or through different trading pairs like BTC/USDT.
Is Bitcoin here to stay?
To sum up, Bitcoin is the longest-lived cryptocurrency, with an untouchable value proposition and fundamentals that suggest it is the most efficient cryptocurrency in the world. Furthermore, Bitcoin has the unique network effect of being the first cryptocurrency ever created, making it less easily exchangeable and the first point of contact for beginners in the cryptocurrency industry.
To reiterate, all other cryptocurrencies are called altcoins, and for good reason. Bitcoin is truly one of a kind, and is an example of what the cryptocurrency movement represents.