Why is bitcoin so popular?
Cryptocurrencies have been on the rise for already more than 10 years. With at its head the main and biggest cryptocurrency of all, Bitcoin. Bitcoin has never been kicked off its number one spot on the crypto market. But why is Bitcoin so popular and why does it even hold any value. In this blog, we go over all the reasons why Bitcoin is so success full and why it will thrive even more in the future days to come.
The BTC price has seen enormous growth over the last 10 years. So much even that it can be named the lucrative investment of the century. Although Bitcoin has many use cases, the price of BTC has not only gone up because more people started using it. But also because of the inflation happening in other fiat currencies. Inflation that does not occur in BTC, and thus protects it against inflation.
You see, other central bank-owned currencies all suffer from money printing, which as result causes inflation of the money supply and the rise of prices. This can have horrible effects on the population of a country as they lose their purchasing power at a rapid rate.
BTC does not have this as its supply is and always will be capped at 21 million BTC. The best fact is that this can not be changed as there is no central entity in control of Bitcoin. But rather everyone that participates in the network, from the miners to the node operators and coin holders.
This all created one of the reasons why BTC has been so popular. As a way to protect holders of BTC against inflation.
Cross border payments
Do you or anyone you know ever send some money from one country to another or from one currency to another? Well if you are someone like that or know people that do so. You will know how high the fees are to get your euros into Japanese Yen for example. With exchange and payment network fees running up so high that a 100$ transaction can charge you a 50$+ fee.
This of course makes it a horrible experience to send your money between countries (and currencies). So for those people that work in one country and want to send home or simply transact with a friend on the other side of the world. The traditional financial system does simply not work. That is why many people that have to deal with this have switched to using Bitcoin instead. A transaction on the Bitcoin blockchain takes less than 10 minutes and costs less than 1$ to send to anyone in the world. And for those that send really small transactions they use the Bitcoin lightning network, which settles a transaction in under one second and costs basically nothing when it is used for small amounts.
Depending on when and what people use BTC for they sometimes decide to convert it into their local currency. But some people also decide to keep it for transactions later on or any other of its use cases, like Defi on Bitcoin or its store of value aspect.
The features that Bitcoin offers are not that unique anymore. With many other blockchains that offer the same features, with sometimes upgraded speed and at a cheaper cost. So why does Bitcoin still stand strong above it all and why is it here to stay?
Well, this it can thank a lot to its early success stories which helped the network grow to be the still undefeated number one of crypto. And accumulate a lot of computer power behind it. Making it so that it became the strongest computer network in the world.
Because of its early and strong reputation, Bitcoin was adopted as legal tender in already 2 countries. With El Salvador taking the lead and the resend Central African Republic as the second country to adopt the cryptocurrency.
Although both countries having a small population with a small economy. Both of them help the Bitcoin network grow and secure a future for itself in the same way Bitcoin helps these countries do so for themselves. Making these countries part of the crypto space and accessible for all the millions of BTC users around the world. While at the same time contributing to the large number of things people can use their BTC for.
Green energy adoption
The world needs to become net zero. You have heard this before for sure. But you might have also heard that Bitcoin is a problem and that it would only make climate change worse because of its energy consumption.
Although it does consume a lot of energy, that statement is not really true. Especially because Bitcoin consumes so much energy, it needs to make sure to do so in a cheap and reliable way as possible. This can not be done with coal and oil, but rather with renewables, nuclear, and other forms of green energy. Because these forms of energy come much cheaper than its polluting alternatives. The Bitcoin network runs already on 60%+ renewable energy. Which is more than double of what most countries run on and the highest on a world scale.
The electricity spent on keeping the Bitcoin network running is an essential cost to keep a monetary system that can not be controlled by evil rulers and stays in the hands of the people. Bitcoin does all of this while at the same time pushing for more and more renewable energy as its network benefits from renewables. This has created a wholly renewable energy sector around Bitcoin that improves the energy infrastructure and greenness of it all. Making Bitcoin a tool for pushing the world energy to switch from gas and coal to wind, solar, and nuclear.
Advantages of using Bitcoin
Bitcoin comes with a number of advantages and ever-growing use cases as it is programable and thus upgradable. However, we have listed 4 main advantages of using Bitcoin here:
Compared to your average bank transfer, that takes about 1 day to complete. Or in some cases multiple days or weeks. Bitcoin only needs 10 minutes on the base layer, and not even a second on the second layer level.
With the Bitcoin lightning network being able to send hundreds of thousands of transactions every second at the speed of light.
As we mentioned before, BTC has a maximum supply of 21 million and thus can not inflate beyond that point. Making it the perfect hedge against inflation. This all gives BTC similar properties to gold but in combination with the other features, it gets from its digital existence.
Unlike with most other currencies, when you hold BTC. You really hold it. With this, we mean that you are fully in control, and no one else. If you hold your BTC on your own non-custodial wallet. You will have ultimate control over your funds. Which also means full responsibility. So always make a wallet backup, just in case.
With that control, you can also make other financial transactions like with a DEX. Which lets you choose how to trade and what to hold your value in.
If you hold your Dollars or Euros in a bank account you probably get close to nothing paid in interest per year. With Bitcoin, you could possibly grow your Bitcoin within your own wallet.
Crypto interest can be earned in many different ways. Both with decentralized and centralized platforms crypto holders can earn good interest on their crypto. Interest for BTC is often between 5 and 8 percent. Platforms like NEXO and Coinloan offer this in a centralized way. Giving users the option to use their platform sort of like a crypto bank.
Why Bitcoin will succeed
Since the creation of Bitcoin many other blockchain networks, and crypto tokens have sprung up. With some of them competing as a different type of Bitcoin most of them have their own unique ideas and plans.
In a world of crypto and web3, there will probably be space for more than one cryptocurrency, even one that could grow bigger than Bitcoin. However, if so, it will probably be with a different use case. As the Bitcoin network has already so much trust and innovation behind it that it would be extremely difficult to compete with it. Especially because you can also help and join the Bitcoin network instead.
But just like the world has more than one fiat currency, there will most likely be more than one cryptocurrency that you can use in the future. Which once that will be, no one can tell. But it looks like it is highly likely that Bitcoin will be among the top of them.
We hope this blog answered some of your questions and made you more prepared for the world of crypto. If you need some more crypto practice you can always check out any of our other blogs or reviews on our website. Or ask your question on our socials, so we may write about it next time.