How did Bitcoin grow up and become big money?

No matter how you count the inception of bitcoin, this currency initiated decentralized finance 12 years back when no one could have ever imagined a financial ecosystem without the intervention of any government authority and third parties.

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Bitcoin’s adoption took off in 2017 and has grown as a practical form of money. In its early days, bitcoin miners faced an arduous process of mining. The process requires high-end hardware and large amounts of data to mine bitcoins. No one could have known how fast the currency would grow and become a benchmark of trust in digital financial instruments. Instead of government involvement, it has grown as an open-source work with cutting-edge technology worldwide.

Several elements make Bitcoin successful.

The first reason is that bitcoin is an open-source network. As a result, transactions are cheaper and more transparent than in any traditional banking system.

The second reason is its availability through direct peer-to-peer transactions devoid of any intervention from third parties and central authorities. It ensures the faster and decentralized flow of bitcoin, unlike other banking systems bound by several intermediaries who must be at each transaction level.

As a result, it saves time and money associated with traditional banking systems, including fees for intermediaries at every transaction level. Moreover, this makes it a universal currency without barring any country because of its volatile nature.

The third reason is the possibility of sending money irrespective of the tracking over borders and ban by central authorities such as banks, online payment gateways, or authorities under anti-money laundering laws. Finally, most bitcoin users view it as a non-political currency that is not bound by any country’s regulations and tax laws.

How is bitcoin better than its competitors?

Competition may refer to both the opponents and the products. Altcoins refer to the numerous cryptocurrencies similar in nature to bitcoin, but not bitcoin. There are thousands of altcoins, including ethereum, litecoin, ripple, dash, and several others, which share the same goal: a decentralized currency. Bitcoin is decentralized since it runs on a peer-to-peer network where its users act as nodes rather than banks or other financial institutions.

First Mover Advantage

Undeniably, digital currencies existed before bitcoin, but none of them had features like decentralization and anonymity. Bitcoin pioneered a new digital currency system in which users are free from third parties involvement.

Bitcoin continues to be the dominant cryptocurrency with a steady value increase and trading volume increasing steadily since its inception. Some altcoins like Ethereum are being used to make exchanges outside the bitcoin ecosystem, while others like lite coin may be used as a payment option along with bitcoin. As a pioneer, bitcoin enjoys a first-mover advantage and has competed with many other digital currencies.

Permissionless versus permissioned blockchains is an essential difference between blockchain and other technologies based on distributed ledgers such as triple entry accounting or mutual distributed ledgers (XBRL).

Bitcoin has no adoption and trust that no cryptocurrencies have

Bitcoin has been around for almost a decade and has remained the most credible blockchain system ever since the inception of cryptocurrencies. Bitcoin is resistant to failure or breakdown due to its distributed nature. Thus it does not have an authority that can interfere with its functioning, unlike banks or other traditional financial institutions.

Decentralization and trustless characteristics are the two factors that make bitcoin a better option to solve the problem of trust in most scenarios. In other words, distributed systems with no central authority or single point of failure offer better results than centralized systems and a clear-cut solution to the critical problems associated with existing technologies.

Innovative Technology and Great history of Surges

Bitcoin is the most innovative of all digital currencies. It is the first currency to introduce the technology that would revolutionize financial transactions, eliminating the need for intermediaries such as banks and online payment gateways.

In 2009, it was launched with a market cap of $0.08, which climbed to $10 per bitcoin by 2011 via an initial price of $0.50 per bitcoin. By mid-2013, its price reached $1,130 by the end of 2021; the currency was trading at $69000. It has a volatile history and is one of the most significant digital currencies.

How is Bitcoin Different from other payment options?

Bitcoin doesn’t have any central authority to collate the records of transactions which makes it transparent and open for public access; instead, every transaction becomes part of a global network. One can check bitcoin balances and transactions on a platform called a blockchain. The blockchain software is available freely to third parties, individuals as well as private companies, thus allowing them to conduct their research or develop their applications based on the bitcoin network.