On January 3rd 2009, the elusive Satoshi Nakamoto made history by launching Bitcoin, the world’s first digital currency, and laid the groundwork for what would later become a thriving industry in its own right. At the time, crypto was a foreign and strange concept for the large public and only a handful of people knew or showed any interest in the matter. Fourteen years after this pivotal event, there’s not a single soul on earth that hasn’t used or heard of Bitcoin and cryptocurrencies.
Nowadays, not only are people able to buy Bitcoin with credit card by creating an account on a crypto exchange platform and placing an order, but they can also use these tokens as a payment method to purchase an increasingly wide range of products and services. Alternatively, they can hold on to their Bitcoin holdings and wait for the price to appreciate over time in order to generate profits. With the Bitcoin price reaching a historical high of $68,789 in November 2021, the coin’s potential as an investment venue is undeniable. And although Bitcoin suffered a major fallout during the latest crypto winter, losing nearly 65% of its market value, it remains the largest and most successful crypto in existence so far.
Looking back at crypto’s brief but tumultuous history, most people can’t help but wonder what propelled Bitcoin to such staggering heights and how the coin managed to maintain its leadership position for so long. There’s certainly no lack of competition in the crypto sphere, with over 9,000 active digital currencies available at the moment, some of which offer advanced features and functionalities that Bitcoin lacks. And yet Bitcoin continues to shine the brightest, despite all the ups and downs it has experienced throughout its lifespan.
So, let’s take a look at the most important factors that have fueled Bitcoin’s popularity over the years and have helped it achieve market dominance.
First-mover advantage
Bitcoin is the most well-known cryptocurrency in the world today mostly because it has been in the market the longest. That’s a record no other crypto can surpass since Bitcoin is the first digital currency invented. This gives Bitcoin the first-mover advantage, as the pioneering project that introduced the concept of digital currencies to the world.
So, no matter how many other crypto initiatives are going to emerge from now on, people will always compare them with Bitcoin. Over the years, Bitcoin has managed to build such a strong brand for itself that it has become synonymous with crypto. And even if the flagship crypto doesn’t have any aspirations besides simply existing, it will remain a point of reference in the industry.
The timing was also perfect as Bitcoin was opportunely launched in the midst of the 2008 global financial crisis when the failings of the conventional financial system became more obvious than ever and people’s trust in banks, governments and traditional financial institutions was at an all-time low. Some say this was a calculated move from Bitcoin’s founder, the mysterious Satoshi Nakamoto, but that’s highly unlikely given that the project’s whitepaper was written in early 2007, at a time when no one could have foreseen the financial meltdown that was about to unfold. Therefore, Bitcoin was not created as a response to the recession, but it did provide people with a solution to long-standing problems plaguing the financial space.
Decentralization
One of Bitcoin’s strongest suits is its decentralized nature. The blockchain technology that’s built on allows Bitcoin to operate independently of third-party oversight or government control. Instead, a peer-to-peer network is used to verify and validate transactions and secure the platform. This decentralized structure ensures data integrity as well as privacy, anonymity and safety.
There’s a common misconception that all cryptocurrencies run on a decentralized blockchain when in reality only Bitcoin and Ethereum can live up to this promise. The majority of crypto projects that are being launched today choose scalability over decentralization, so they don’t really operate in a decentralized manner. Most of them are controlled by their developer company or have some sort of management in place that oversees activity on the platform. While this might help mitigate certain risks, these networks lack the trustlessness that Bitcoin’s decentralization provides.
Widespread adoption
Another factor that has greatly contributed to Bitcoin’s popularity and success is represented by its widespread acceptance. The expansion of the crypto industry has prompted countries around the world to explore different ways to regulate digital currencies, and most of these efforts focus on Bitcoin. In fact, Bitcoin is the only crypto that functions as a legal tender in two countries, El Salvador and the Central African Republic (CAR), and other nations in the developing world might take a similar stance in the future.
Moreover, an increasing number of businesses and organizations are now accepting crypto payments, and Bitcoin seems to be the crypto of choice for these transactions. Companies choose to adopt Bitcoin due to the advantages it provides, such as a higher level of privacy or tax rebates.
Market value
Last but not least, we can’t overlook the role that Bitcoin’s market value plays in its success. Bitcoin’s price history looks like a roller-coaster with numerous ups and downs from its inception to the present day. But despite the volatility, Bitcoin’s value continued to appreciate, turning the asset into a prime investment venue.
In November 2021 Bitcoin managed to hit a record high of $68,000, the largest value a crypto has ever reached. At the time of writing, Bitcoin was trading for $30,018.45, marking a 72% increase since the beginning of the year. So, it comes as no surprise that traders and investors continue to pour money into the most valuable crypto in the market.
Final thoughts
Bitcoin has definitely seen better days in its existence, but the recent market fallout hasn’t taken away its shine. Its inherent characteristics as well as its track record give Bitcoin a unique appeal and place it in a category of its own, so we have yet to see a coin that could dethrone it.
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