After Bitcoin’s launch in 2009, other digital currencies emerged in the market. Today, the world has over 4,000 cryptocurrencies in circulation. However, Bitcoin remains the most successful electronic currency. That’s because it has the largest market capitalization, estimated to be more than $1 trillion. What’s more, Bitcoin has more users than other electronic currencies.
Essentially, more than 40 million people use Bitcoin worldwide. And this can prompt you to wonder why this electronic currency is so successful. Well, several factors explain why this virtual currency has the largest market cap and more users.
Decentralization
A primary reason why Bitcoin is so successful is decentralization, whose basis is blockchain technology. Bitcoin uses a blockchain network that creates an environment that facilitates transactions that people complete using this cryptocurrency. With this technology, people can complete Bitcoin transactions without involving intermediaries.
Bitcoin provides a decentralized system, meaning attributes like data transparency, anonymity, and fast transactions contribute to the currency and technology popularity. What’s more, Satoshi Nakamoto, Bitcoin’s founder, remained anonymous after launching this virtual currency. Satoshi disappeared in 2011 when the blockchain network gained more users.
Decisions touching Bitcoin are entirely democratic. That means only the miners validating Bitcoin transactions vote on the network proposals. Otherwise, nobody else can alter the network data or affect Bitcoin’s supply.
Bitcoin Trading Websites
Another factor explaining the success of Bitcoin is online crypto exchange sites. Platforms like bitcoin evolution allow people to purchase and sell this digital currency using fiat money. Bitcoin was the first cryptocurrency. For this reason, most crypto trading sites accept Bitcoin. When compared to relatively new cryptocurrencies, Bitcoin has already earned a place in the digital currency market. And trading sites that accept new cryptocurrencies are fewer.
Crypto exchanges allow traders to deposit a low amount of fiat money to start purchasing and selling Bitcoin. And these platforms use innovative technologies that make Bitcoin trading easier even for novices. With most trading platforms, users can set the system to trade automatically on their behalf. Thus, all that a trader does is register and adjust the settings to allow the system to buy and sell Bitcoin within specific parameters.
Bitcoin Protocols
Satoshi Nakamoto ensured that the blockchain system could operate without assistance. That’s why he came up with the Bitcoin halving protocol. Bitcoin halving is an event that splits the reward for the miners by half. And this affects the expenses involved in Bitcoin mining and the supply of this cryptocurrency. Since Bitcoin is a decentralized electronic currency, Satoshi restrictions still affect its supply. For instance, Satoshi capped Bitcoin supply to 21 million coins. That means the world will never have more than 21 Bitcoins in circulation. And this, combined with the halving process, limits Bitcoin supply.
Mining Difficulty
Another reason that explains why Bitcoin is a successful cryptocurrency is the complex mining process. Bitcoin mining entails solving challenging math puzzles and getting Bitcoin as the reward. Initially, people could easily earn Bitcoin through the mining process. However, this process has become more complex as the network grows and more people accept Bitcoin. Today, you need a lot of computing power and unique skills to mine Bitcoin. What’s more, the amount people earn from Bitcoin mining has reduced significantly. That’s why most people opt to purchase Bitcoin through crypto exchanges rather than invest in its mining process.
Final Thoughts
Bitcoin is undoubtedly a successful digital currency because it has a perfectly operating blockchain network. Its acceptance and adoption are also increasing. Bitcoin has an increasing number of merchants accepting it as a payment method. Compared to other electronic currencies, Bitcoin has the largest market capitalization. All these factors depict Bitcoin as a successful cryptocurrency.
