Bitcoin Series #3: What Makes Bitcoin Unique?
As of January 2021, there are more than 4,000 cryptocurrencies. While many of these cryptocurrencies have little to no following or trading volume, some enjoy immense popularity among dedicated communities of backers and investors. The most popular of these is Bitcoin. Bitcoin was the first of the cryptocurrencies to gain global attention outside of programmers, developers and drug dealers. Many other cryptocurrencies have emerged with competing platforms, technologies and features.
What makes Bitcoin unique amongst thousands of potentially superior cryptocurrencies? Why is that we continue to see a bullish behaviour from Bitcoin whereas many other cryptocurrencies are subject to mediocre movements? Today we’re going to find out why.
The future applications of altcoins
Bitcoin is so famous that other cryptocurrency are often referred to as altcoins.
Many altcoins were built for a purpose. They offer to do something bigger, better, cheaper and faster. One way to think of these coins is that Bitcoin is the base, whereas the altcoins are the booster packs. So these altcoins should technologically have an edge over Bitcoin. While this is true, it does not explain why Bitcoin has not yet been taken over by a superior altcoin.
One of the reasons is that if an altcoin was launched with a particular feature that would be deemed useful, it can be easily implemented into Bitcoin.
Another aspect that allows Bitcoin to come out on top of other cryptocurrencies is that many altcoins target a very specific niche. They are built to serve a particular purpose. For these altcoins, it is difficult to justify why would someone buy them if they are the same as Bitcoin apart from a few niche features that majority of users won’t use.
For altcoins to compete in this space, they would need to differentiate themselves from Bitcoin in terms of functions and what they can achieve.
Security, anonymity and decentralisation are some of the hallmarks of cryptocurrencies and the reason why people started using them in the first place.
If you search for the most secure cryptocurrencies, Bitcoin doesn’t even make it in the top six. However, the degree of security these cryptocurrencies provide over Bitcoin are marginal and of no special use if you aren’t a drug dealer or someone trying to evade the law.
What Bitcoin going for it, however, is its robust network and a longer history of proven performance. A lot of these ‘most secure altcoins’ are relatively new. So people gravitate towards a proven track record rather than just take someone’s word.
There have also been cases where altcoins have been developed, marketed and offering a number of premised coins for users to start purchasing. Users are attracted to these coins, the value rises, prompting further investment. Then one fine day you find that the developers have stopped further development of the altcoin, cashed out and left all the investors with nothing but less space on their hard disks.
Accessibility and support
Bitcoin is also unique in that it is supported by every major and semi-major cryptocurrency exchange. Along with this, more and more merchants are accepting Bitcoin as a form of currency.
Bitcoin has also been continuously improved upon and supported through software and hardware updates. Bitcoin also has the largest market cap (as of May 2021) of all the cryptocurrencies and hence is the most liquid. It also gets the most attention in the media which makes more people buy it.
The other name of cryptocurrency
As of now, at the time of writing this article, Bitcoin is synonymous with cryptocurrencies. Sure, there are a lot of alternatives like Ethereum, Binance Coin, Dogecoin, Cardano and thousands more, but the fact that I am writing this series of articles to explain cryptocurrencies and I’m mostly talking about Bitcoin should tell you something.
Bitcoin is king! For now at least.
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