If you haven’t spent the last decade under a rock, you probably have heard about Bitcoin. Although its current status was by no means guaranteed right from the start, and not once and not twice, it seemed like the end of this cryptocurrency was near, Bitcoin somehow persevered.
Currently, its popularity has reached an all-time high, and it seems that everyone these days has an opinion on Bitcoin’s future and the role in our society. There are many uncertainties remaining, but one thing’s for sure – Bitcoin won’t be forgotten any time soon. In this article, we will explain what are the reasons behind its astounding success.
The Price of Bitcoin
Bitcoin is a decentralized cryptocurrency, which means that it has no issuer and no tangible asset to back it up. Its price is determined solely by the market, which means that its value can change significantly from day to day. On the one hand, Bitcoin volatility makes people hesitant about investing in this cryptocurrency, but on the other hand, it’s the reason behind its popularity. Bitcoin is the first cryptocurrency, and it was initially created as a payment system.
However, a lot has changed since 2009. Nowadays, Bitcoin is traded like a stock and used as a means of payment. In 2017 alone, its price skyrocketed by over 1000%. As the first cryptocurrency, it fulfilled its purpose and became the first decentralized digital currency, showing that it can be done.
The Blockchain Technology
Blockchain technology is yet another reason for Bitcoin’s success. In fact, there are many cryptocurrencies that use blockchain technology, but none of them have gained as much popularity as Bitcoin.
Blockchain technology enables peer-to-peer transactions without middlemen or centralized systems. The system is decentralized, meaning that information is stored on every device that participates in transactions. Each transaction is verified by the network before being added to the blockchain, and the whole system is transparent and open to everyone. Such an approach eliminates the need for third-party verification and prevents fraud.
Blockchain technology allows people to make transactions without any third parties involved. The technology has many potential uses, but its contribution to the cryptocurrency industry is arguably the biggest one. However, it’s not the only contribution that Blockchain has made. This technology also drives other cryptocurrencies such as Ethereum, Litecoin, Dash, and Ripple.
The Transaction Speed
Bitcoin transactions are fast and cheap. Bitcoin processes transactions in about ten minutes, which is very fast compared to other cryptocurrencies in the market. Although ten minutes might seem like a long time for some people, it is a truly impressive feat when you consider that it takes several days when using banks and other centralized financial institutions.
Bitcoin transactions are also very cheap. Sending a few hundred dollars to your family overseas will cost you less than a dollar in fees – nothing compared to what you would pay if you were to use conventional payment systems such as Western Union or PayPal. No wonder then that Bitcoin is becoming more popular especially among those who live outside of their country of origin.
The Reliability Index
The reliability index shows how much confidence is put into each cryptocurrency by investors and traders. As you might have guessed, Bitcoin ranks at the top of this index – and for a good reason too! This cryptocurrency has been around for over ten years already and has seen its fair share of ups and downs. However, despite all these challenges, it still manages to stay relevant and rise above them. It has survived a series of hacking attacks and even government bans, which is a testimony of its reliability.
The Lack of Regulation
One of the reasons why Bitcoin has become so popular is because it’s not regulated by anyone or anything – at least not yet! If you think about it, fiat currencies are backed up by governments while gold is backed up by governments and people who believe that gold is valuable. However, neither governments nor gold are backing up Bitcoin. There is absolutely nothing that backs up this cryptocurrency – and yet, it remains one of the most valuable ones in the market today.
The Scarcity Index
The scarcity index shows how many people are using each cryptocurrency, and Bitcoin ranks at the bottom of this index. There are only 21 million Bitcoins in the world, and once they are all mined, there won’t be any more left. This is a big deal because it means that as long as people continue to use Bitcoin, its value will continue to rise. If Bitcoin continues to be used in the future, it will become even more valuable than it is now.
The Scalability Index
The Scalability index shows how easy or hard it is for a cryptocurrency to grow and expand. Although Bitcoin has been around for over ten years already, it still hasn’t reached its full potential. In fact, it’s still not scalable enough to become mainstream – but maybe that’s a good thing! The fact that Bitcoin can’t reach mainstream right now means that its price doesn’t depend on mass adoption, which means that it will be valued regardless of whether or not it will ever reach mainstream status.
The Bottom Line
As you can see, there are many reasons why Bitcoin is so successful. However, it’s also important to mention that Bitcoin is not the only cryptocurrency with a lot of potential. There are many other cryptocurrencies out there that have a lot to offer to the world, and some of them might even be considered to be better than Bitcoin.
As long as people continue to invest in Bitcoin, it will continue to be a very valuable cryptocurrency. It’s still unclear whether or not Bitcoin will continue to rise in popularity, but one thing is certain – the end of Bitcoin is nowhere near.