BTC, in its initial stages right after the launch, was utilized as digital currency in some parts of the economy. Almost a decade after its introduction, bitcoin has now transformed into a much more mainstream asset, and is used acknowledged as a form of “digital gold”. In other words, it is considered a valuable digital asset. What is BTC? Bitcoin is the pioneer of all the cryptocurrencies in the world, in terms of its price and market cap. The current supply of BTC circulating in the market is 18,590,300 coins from a total of 21 million coins. The limit of 21 million coins is fixed in the bitcoin network. Thus setting a limit beyond which the bitcoins would not circulate. This ensures the fact that bitcoin will therefore only increase in value over the course of time. Contrary to this, the supply of fiat currencies is controlled by the central banks and the governments, and can vary, causing its value to fluctuate either side of the spectrum. Therefore, BTC has a clear advantage for investors over the fiat. Although generally the trading of Bitcoin takes place on cryptocurrency exchanges over the internet, holders can also send or receive the crypto and also store it in digital wallets on different available hardware or applications. Auto trading is also a newer technology which allows bitcoin owners to gain profits on their crypto investments via platforms consisting of trading robots. These robots use AI to buy and sell crypto at profits, generating gains for the investors and traders. However, the most incredible feature of the BTC is its blockchain, which uses cryptography to execute,record and protect transactions. Being a public blockchain consisting of an irreversible database, the transaction records and history cannot be edited or modified on the bitcoin’s blockchain.
Bitcoin as a Practical & Efficient Digital Currency
Among the other features, a key distinctive feature of Bitcoin is that it’s decentralized, which means that its peer-to-peer network is not controlled or regulated by an external third party such as the government or a central bank. This happens due to the involvement of Bitcoin miners. These miners can be identified as any individual who chooses to run the software to validate the transactions of BTC on the blockchain. Such individuals are generally more involved with the activities of the cryptocurrencies. Now although these miners get the bitcoins, typically after every ten minutes, this reward that the miners receive gets divided into a half after every subsequent 4 years. This division and subsequent decline in the supply was incorporated into the system by the creator of BTC, Satoshi Nakamoto. He was inspired by the mining process of gold, another important metallic asset, which is present on the earth in a definite quantity, and becomes increasingly harder to mine with the passage of time. The price of bitcoins, therefore, will likely rise in order to meet the subsequent demand. Since the market is aware of this halving, the price is changed in advance by the market forces, in anticipation. Thus, huge increases and reductions in the price of the bitcoins generally shows the variations in demand for it in the market. Due to these reasons, an increasing number of global corporations and public companies have now started investing in BTC. However, what makes bitcoin so distinctive than other cryptocurrencies and assets and causes so many people around the world to invest in it?
Why is Bitcoin Important?
Several explanations can demonstrate why bitcoin is becoming increasingly important in the market for investors. We have identified some of them as follows:
Bitcoin is a Safe Investment Option
Investing in bitcoins allows the investors to diversify their investment portfolios, in order to minimize losses from risks and uncertainties. The value of bitcoin can be contrasted with another all-time popular asset: gold. Due to the ongoing global pandemic, people have become increasingly interested in investing in assets such as bitcoin and gold, in comparison to the fiat – mainly dollars.
Bitcoin Provides Privacy
It is understood that all the digital currencies, BTC in particular, were created a few years ago in the digital age, and therefore automatically creates doubts and concerns for privacy. According to the records of an online forum, it is pretty evident that one of the main features which attracted a lot of investors towards bitcoin was its anonymity. Due to the decentralization, no authorities have been involved in the crypto transactions of bitcoins. This was recognized as a great opportunity by the investors who did not want any third party intermediation or involvement in their transactions. Most recently, the explicit increase in digital surveillance to counter the global pandemic of coronavirus has increased doubts regarding online privacy and security.
Why is BTC Soaring?
The current surge in bitcoin prices and values can be accredited to an amalgamation of three factors: hope, ideology and social sentiment. Despite the fact that these are inconsistent factors, it doesn’t decrease the importance of the virtual economy, increased attention towards the technology as it develops and the impact of institutional investors in digital currency, including BTC. Following the code developed by the inventor of Bitcoin, Satoshi Nakamoto, bitcoin is designed in a way that its value will certainly increase with the passage of time and so far, we have witnessed the BTC growing in an upward market trend, which is also identified as another term – bull market territory. A Final Word Bitcoin was a revolutionary invention, and this daring experiment in crypto is proceeding as envisioned. Now, the thing that is worth the global attention is how the BTC will shape our digital and financial future.
