Bitcoin has grown in popularity over the last couple of years and many people almost use the terms “Bitcoin” and “Cryptocurrency” interchangeably. But in fact, there are 1,700 cryptocurrencies in existence today. What’s more interesting, six of them technically can be called Bitcoin.
There is Bitcoin Cash, which enjoys a massive $20 billion market capitalization, as well as Bitcoin Gold, Diamond, Dark, and Private. These are all major cryptocurrencies posing as Bitcoin. So, what makes Bitcoin Bitcoin? And, what features make Bitcoin superior to other imitators on the market?
It’s a tricky affair to define what makes Bitcoin Bitcoin, or even what defines money. A simple definition of Bitcoin is peer-to-peer electronic cash, but the same principle applies to a wide range of cryptocurrencies that aren’t related to Bitcoin in any way.
A few desirable traits make Bitcoin easily identifiable, such as fast settlement times, low fees, and the proof of work mechanism utilized when creating and validating Bitcoin. But, these do not define it. Some other cryptocurrencies can also offer impressive block times as short as 10 minutes and even lower fees. So, what’s one unique feature that seals the deal?
How to Identify True Bitcoin
Everyone seems to agree on the fact that Satoshi Nakamoto created Bitcoin and mined the Genesis Block. So, every definition we come up with should reference the genesis block. Again, this does not make the definition any easier as multiple chains might root back to the mother block. The characteristic of “most work” or longest block might not solve the problem since it can allow miners to unilaterally define Bitcoin.
Perhaps a more accurate definition of Bitcoin could mention “valid most work chain,” but again, how do you identify the valid and invalid rules? The rules are likely to change in the future, so under what conditions would an upgraded version of Bitcoin be considered real Bitcoin? Overall, it’s difficult to find a single definition of Bitcoin that works both retroactively and proactively.
Bitcoin is What Everybody Thinks It Is
Any cryptocurrency can theoretically be considered Bitcoin just like anything can make for useful money as long as everybody else considers it money. Take the example of Testnet, a clone of Bitcoin’s code that was deployed as a separate cryptocurrency for experimental purposes. In terms of value, Testnet is absolutely worthless and is exclusively used by developers to test their products without involving real money. The mining is done by volunteers who give coins away for free. So, whether you hold real Bitcoin or other imposters, what matters is what people around you consider Bitcoin.
What Makes Bitcoin Unique and Superior to other Cryptocurrencies
There are several Bitcoin (BTC) imposters cropping up in the market every day. Some common examples are the Bitcoin Cash (BCC or BCH) and Bitcoin Gold (BTG). These are just forks of the original Bitcoin that have succeeded in confusing many cryptocurrency enthusiasts with their nomenclature.
It’s important to note that the original Bitcoin and its current team of developers are not part of the groups initiating these imitation coins. The coins do not possess the same code as the BTC code, so they don’t have the same value.
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Bitcoin runs on blockchain technology, an innovation that was predicted by researchers to not come into existence for at least another 100 years. Visionary Satoshi Nakamoto proved everyone wrong by birthing Bitcoin and unearthing the world of cryptocurrency. Since the emergence of Bitcoin, several other cryptocurrencies have come up but all of them have fallen below par in comparison to what they originally promised.
Why is it that no other cryptocurrency has recorded the dramatic price increase that Bitcoin enjoyed? There are several factors that contribute to the massive value of Bitcoin and its widespread popularity and adoption. Bitcoin, being the original archetype for the cryptocurrency ecosystem, provides a trusted infrastructure that drives its mass usability and impressive user base.
Bitcoin was unveiled by Satoshi Nakamoto in 2009 as a peer-to-peer electronic cash platform that runs on blockchain technology. The technology was not well understood at the time and its proponents took time to appreciate its potential.
During its initial stages, Bitcoin gained notoriety for its utilization in the black market, which hurt its reputation for a number of years. However, developers looked at its potential to safely and anonymously complete transactions between parties without the involvement of central authority. Many people now appreciate the importance of Bitcoin in society and how it can fundamentally transform the way transactions are handled across the globe.
Bitcoin could not be what it is without the underlying innovation known as blockchain technology. The blockchain enables a distributed ledger, an innovative system that takes away trust from a single entity and allows a distributed storage of data across a network of blocks. Other than Bitcoin, many other cryptocurrencies have utilized the blockchain technology to bring their ideas to life.
Before the emergence of blockchain technology, many investors had fallen victims of shady banks and real estate antics. Blockchain sought to eliminate the need for a single entity like a bank holding all the powers and sensitive information of millions of innocent patrons. Bitcoin pioneered the world of cryptocurrency using blockchain technology and created the path for all other cryptocurrencies to follow. Blockchain technology is a revolutionary innovation that runs beyond Bitcoin itself, and that’s why it holds so much respect in the cryptocurrency community.
Bitcoin is by far the most valuable cryptocurrency both by market cap and price, and here are the reasons why:
Superior User Base
Recent statistics indicate that there are more than 10 million Bitcoin wallets across the world. With such an impressive number of users who have invested in the technology and ready to use its easy and secure digital transactions, the value of Bitcoin has soared. The larger user base also adds to the credibility of the cryptocurrency, and new investors and participants are attracted to join the Bitcoin community as opposed to other new entrants in the cryptocurrency space.
Accepted by Many Merchants
Several online retailers and travel agencies are accepting Bitcoin as a mode of payment. The cryptocurrency has the potential of reaching mainstream adoption. As more and more vendors across the globe consider its integration, Bitcoin will continue to rise in popularity and value. The widespread adoption, by extension, will increase the demand for the cryptocurrency as many consumers realize the benefits that come with transacting with digital currencies.
First to Hit the Market
As mentioned before, Bitcoin was the first digital coin to introduce the whole idea of cryptocurrency and the supporting infrastructure that powers it. This fronts it as the authority figure in the crypto space. New and curious customers looking to join the bandwagon will want to do so through Bitcoin due to its mainstream media attention. As new users add to the blockchain, the value of Bitcoin continues to appreciate.
The invention of the concept of blockchain technology is accredited to Bitcoin. The blockchain or distributed ledger is absolutely secure and private, and many more cryptocurrencies like Ethereum and Litecoin have built their systems on the same infrastructure. The viable and trusted blockchain platform has enabled many people to securely hold their bitcoins and keep their transactions private, which is proof of its viability and value to society.
More Use Cases
Bitcoin can be adopted and used by any individual, entity, or business, meaning that its potential use cases in society are massive. That’s the reason why Bitcoin’s value has remained superior to other cryptocurrencies even after the bubble burst that happened at the end of 2017. Those who have embraced Bitcoin understand the technical aspects of Bitcoin and how it can revolutionize digital transactions. If it wasn’t for Bitcoin, platforms like Ethereum that emphasizes smart contracts with an enormous number of technical use cases wouldn’t be around. Ethereum is the second most valuable digital coin but it still pales when compared to Bitcoin.
What about Other Cryptocurrencies?
There are more than 1,700 cryptocurrencies in existence today, and still counting. Crypto enthusiasts across the globe have credited entities like Ethereum and EOS as great digital assets that have the most potential technical use cases for the modern and future society. The fundamental question that comes to mind is, why are these digital currencies trailing Bitcoin further below?
The answer lies in the current adoption. Theoretically, Ethereum has an impressive number of real-world use cases that could make the world better, safer, and more efficient. However, all these are still ideas that are yet o be adopted and used on a mass scale. While these Ethereum dreams remain on the pipeline, Bitcoin transactions are made on various platforms by ordinary people and businesses every single day. Bitcoin is the trailblazer that works to promote the mainstream utilization of this mode of currency and technology.
Apps and developers that that facilitate the mass adoption of Bitcoin are simultaneously aiding the development of Ethereum and other cryptocurrencies. Bitcoin is basically marking the trail for other cryptocurrencies to follow and realize their visions.
So, is there any sense in the existence of these thousands of altcoins? In reality, most of them are just utilities. Any innovation developed for Bitcoin is often tested on the Testnet environment to minimize risks of losing real money when an error occurs. However, the real test happens in the production stage where fraudsters and hackers lurk. All the consequences of an upgrade are not predictable, especially when a modification in the code can trigger social dynamics, meaning that the real test is in reality. Many altcoins, just like Bitcoin’s Testnet, represent an experimental environment; the only difference is that they put at stake real money and social dynamics. SegWit is a good example of developments tested on altcoins. Though it was later approved by Bitcoin developers, it was first introduced on Litecoin.
Development of the Cryptocurrency Ecosystem
The blockchain technology has clearly not reached its maximum development. It took several years to build Bitcoin as a cryptocurrency. Today, we can boast of numerous reliable cryptocurrency exchanges, mining pools, and wallets. The existing infrastructure will not cease to develop further.
Several noble ideas that were proposed before are now beginning to roll out, for example, Bitcoin futures and crypto loans. The Bitcoin protocol is also undergoing further development to make it perfect, and SegWit is a good example.
Additionally, blockchain technology has a huge potential in several fields other than cryptocurrency. Many ICO projects had launched over the last few years to offer different adaptations of blockchain technology. Some of them have actually launched their products into the market covering the music industry, health, insurance, advertising, and much more. The cryptocurrency field is still very prospective, and many cryptocurrencies, exchanges, and wallets are still developing. Even banks are not left behind. Many of them are investing massively in developing blockchain-based laws and banking systems. Of course, leading financial institutions cannot invest in something unpromising.
Over the last couple of years, the cryptocurrency world has faced various tides. Several fake cryptocurrencies flooded the market, but the good news is that most of them didn’t survive the competition. The field of cryptocurrency is slowly being purified and Bitcoin is taking the lead. This natural selection is an important step in the development and growth of every new and competitive field. The coming years will see Bitcoin growing stronger and more valuable than before.
Finally, many cryptocurrency proponents rushed to invest in Bitcoin during its initial launch with the hope of making quick money without doing anything and without basic economic and investment knowledge. However, things are looking bright now that some of those investors were disappointed by the bubble burst that cleansed the crypto market. Moving into the future, people will invest in Bitcoin, not because of the hype, but because they believe in the real value that it offers. Serious investors who are key to the development of the cryptocurrency are putting in massive resourcing into the development of Bitcoin, and they are running by real facts and analytics.