Bitcoin: The Leading Cryptocurrency
Zelcore
Dec 29, 2021 · 4 min read
Bitcoin (BTC) is the undisputed leader of the cryptocurrency market.BTC accounts for nearly half of the total market capitalization of the crypto market.Given the fact that there are more than 10,000 crypto coins and tokens, with dozens of new projects launched on a daily basis, the influence of Bitcoin on the whole market is huge.Thanks to the high value of BTC and its market dominance, every price change of Bitcoin also influences the rest of the market.Altcoin prices jump or crash when the BTC price fluctuates.
It took se v eral years for Bitcoin to become a widely accepted financial asset, especially since it was the first cryptocurrency in the world.At the time of its launch, Bitcoin was judged by many traditional financial experts and stockbrokers as an unsustainable asset that won’t manage to achieve any considerable adoption rate.
Let’s take a closer look at the history of Bitcoin, how it works, why it is so popular and how it compares against altcoins.
Bitcoin History Bitcoin was launched back in 2009, as the first cryptocurrency in the world.
Before it was launched, the anonymous developer behind the project, Satoshi Nakamoto, who’s real identity remained unknown to this day, published the Bitcoin whitepaper , explaining what BTC is and how it works.
The idea behind Bitcoin was to create the first type of digital cash, based on a decentralized peer-to-peer network that allows users from all over the world to transfer funds between any two digital locations on the BTC blockchain.
After the initial launch of BTC, rarely anyone besides a small community of crypto enthusiasts used the coin as a financial asset, but the situation soon started changing, because the BTC blockchain proved to be a very reliable, and at that time a quite fast network.The fact that people could send each other funds in just 5 to 10 minutes, without the use of central banking systems was something that started gaining the interest of developers and financial experts.
Soon enough, in 2010, the first Bitcoin exchanges were launched in order to provide users with a medium for practical Bitcoin purchases and sales.As Bitcoin started gaining popularity, new cryptocurrency projects were developed and launched, with the aim of providing the market with new functionalities, however none of these altcoins managed to endanger the leading market position of BTC.
How Bitcoin Works Just like other cryptocurrencies, Bitcoin uses blockchain technology to operate.The key difference between BTC and all altcoins is the fact that the BTC blockchain is the first cryptocurrency blockchain in the world.The blockchain operates like a distributed public ledger of transactions, run by independent network nodes, that are actually Bitcoin miners with their computers.
The chain is composed of a linear string of data blocks that are chronological from first to last.Each data block contains 1MB of transaction data and the block is immutable, which means that after a block of data is approved and added to the blockchain, it can’t get changed.
This makes the BTC blockchain extra secure, since no one can tamper with approved transactions and manipulate the data.
When a user initiates a Bitcoin transaction, it needs to go through the proof-of-work consensus mechanism to get approved.Bitcoin miners need to verify the validity of each transaction by finding the appropriate 64-digit transaction hash for a transaction.Once a miner finds the right hash, they present it to the rest of the network as a proof-of-work and additional miners verify it.
This mechanism makes sure that every transaction is legit.Many altcoins, such as Litecoin (LTC), Ethereum (ETH) and Bitcoin Cash (BCH) copied the Bitcoin blockchain operational model and added their own improvements to the mechanism.
Bitcoin Popularity During its first years, the market price of Bitcoin was barely a couple of US dollars, but as BTC popularity increased, so did the price per coin and its market cap.
Cryptocurrency exchanges and the ease of Bitcoin use have hugely contributed to BTC popularity.
The fact that people could quickly conduct transactions and payments, without complicated bank transfer procedures and the potential profitability due to high Bitcoin volatility are just some of the factors that contributed to its popularity.
Most recently, Bitcoin managed to break through the 50,000 USD per coin threshold in 2021, setting constant all time highs that went even further up, cementing Bitcoin’s position as the digital gold of the 21st century.
Bitcoin Compared to Altcoins Compared to altcoins, Bitcoin’s market capitalization is something no other cryptocurrency project can compete with, but combined, altcoins do hold a larger portion of the market cap than BTC by itself.
Bitcoin holds absolute financial asset superiority compared to all other cryptocurrencies, because it is used as the main cryptocurrency on the market.However, besides digital cash services and as a store of value, BTC doesn’t offer many functionalities.
Altcoins such as Ethereum (ETH), Solana (SOL), Polkadot (DOT) and numerous other projects offer services with which BTC can’t compete.These services include smart contract capabilities and development tools for decentralized apps, which can be used to launch all sorts of DeFi, gaming, educational and production management apps, among other use cases.Such projects attract multimillion dollar investments on a daily basis and they have considerable market caps, but even so, Bitcoin’s position isn’t endangered, thanks to its immense popularity and adoption rate.Altcoins have a long way to go before they can really compete with Bitcoin as individual projects.
Conclusion Despite being launched by an anonymous developer and encountering a lot of opposition during its first years, Bitcoin managed to introduce cryptocurrencies as an asset class accepted by millions of people worldwide.
It remains to see whether altcoins will manage to steal Bitcoin’s spotlight in the future, but for now , BTC is definitely the king of crypto..
