The cryptocurrency wave is one that many are keen on riding. Ironically, this number includes those with little or no knowledge of the subject; people with too much money to throw around and scant little interest, or even desire to conduct apt research before splashing the cash on investment.
Bitcoin is the world’s foremost cryptocurrency today, and for a reason: it is the first of its kind. Created in 2009 by the anonymous Satoshi, the concept of a digital currency as proposed in Satoshi’s Bitcoin Whitepaper relies on the idea of a virtual, digital ledger powered by multiple computers or servers, each working in tandem as one to process the items on the ledger.
The idea of a decentralized financial network, i.e., the blockchain, has completely revolutionized corporate finance as we know it. Now, it is possible to transact payments in an anonymous, speedy, and secure way: one not reliant on a middleman such as a Central Bank.
What is Bitcoin Used For?
As a cryptocurrency, Bitcoin is used as an investment alternative. Investors use it as a way of diversifying their portfolios, away from regular bonds and stocks.
In addition, Bitcoin is an accepted means of payment on different platforms and industries. You’d be surprised to find that your local grocery store actually accepts Bitcoin as a form of payment. Companies such as AT&T, Twitch, Paypal, and Overstock accept Bitcoin payments too.
Another use of Bitcoin is that it is an excellent platform with which people can store financial value without relying on fiat currencies backed by the government. This is a huge benefit, especially in countries with unstable currencies and economies. Thus, Bitcoin allows people to hedge in the case of inflation.
Alternatives to Bitcoin: Altcoins
You’ve probably heard about altcoins and wondered what they were. Altcoin refers to cryptocurrencies other than Bitcoin. After its founding in 2009, it was quite natural that several new blockchain-based technologies would spring up, some of them coming as hard and soft forks of the original Bitcoin (BTC).
Today, there are thousands of altcoins, the most prominent of which is Ethereum (ETH) so far. However, Bitcoin outstrips the others in terms of trading volume, financial value, and market capitalization.
There are many ways to buy Bitcoin, with there being specialized brokers online who offer fiat to Bitcoin conversions. These brokers also offer trading options, with investors allowed to buy XRP, for instance, and then trade it for Bitcoin.
For investors looking to invest in Bitcoin or altcoins, here are some things to consider:
Benefits of Bitcoin
Compared to altcoins, Bitcoin has several benefits, many of which are essential to potential investors:
Bitcoin has a clear advantage over altcoins due to its status as the first cryptocurrency. Folk looking to invest in cryptocurrency would do well to choose Bitcoin, as it continues to attract the very best developers.
Its large user and developer community has contributed to making the brand easily recognizable, compared to the slew of obscure altcoins struggling for visibility out there.
Bitcoin is highly reliable, despite having come up against external attacks, internal protocol disputes, and bans from governments around the world. Due to this, it is much less volatile than altcoins, with its market value remaining reliably stable even in the face of inflation.
3. Market Value
Bitcoin’s sheer financial value should indeed be the biggest tipping point for investors seeking to make a decision. In early 2021, Bitcoin hit record highs of over $50,000. While its value has dropped slightly since, it still hovers relatively around the $40k mark, which is impressive still.
To put this figure in perspective, in the cryptocurrency market, the coin that comes closest to Bitcoin, Ethereum (ETH), is valued at only a little over $3k. The massive gap is one huge indicator, a sure sign of Bitcoin’s edge over altcoins.
As the first and largest cryptocurrency token on the blockchain, Bitcoin is also the most secure of the lot. The security of a cryptocurrency contributes to a large extent its financial value. No one wants a currency that can be forged, after all.
Security translates to financial transactions on the blockchain, with zero chance of hackers breaking through military-grade encryption.
Just as well, the size of its developer community is contributory to its level of security. Bitcoin has a vast team of developers working every day to update its protocol to conform with the best technologies available today. Impressive, huh?
It is clear that Bitcoin is ahead of altcoins in more ways than one. Its network is by far the largest. And in the eyes of institutional investors, it is the most legitimate, being based on the most foolproof database ever created by man.
Bitcoin is an alternative to real money, a groundbreaking innovation, and Bitcoin price will only gain in the future.