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The cryptocurrency space might be going through a ‘DeFi frenzy’ at this point of time, but bitcoin is still the most favorite and the most preferred digital asset amongst traders/investors.
Why? Because bitcoins have value. And why’s that?
Because bitcoin is decentralized, durable, portable, fungible, scarce, divisible, and recognizable. And most importantly, the cryptocurrency’s design is based on the standard principles of mathematics.
If that wasn’t the case then BTC‘s mining space wouldn’t have grown to become a multi-billion dollar industry, and the cryptocurrency would be trading as derivatives amongst institutional investors on Wall Street.
However, there are many more reasons for bitcoin’s popularity.
Pseudoanonymity & Low Transfer Fees
Recent research found out that bitcoin has been functioning as an extremely valuable payment channel. The world’s first cryptocurrency has helped transfer value worth almost $1 trillion between transacting parties.
And all this has happened with moderately sufficient anonymity. Personal details of the sender and receiver remain hidden with the exception of the BTC addresses involved in the transfer.
Apart from this, BTC transactions are cheap, especially for large-scale fund movements. So cheap that it took just $4 to send $1 billion worth of bitcoins. This was last month.
In June this year, again a billion US dollars worth of BTC were moved for just $0.48! That’s right!
Insanely High ROI
Long-term holders of bitcoin have found themselves in a sweet spot, as the crypto asset kept surging in value through the years.
When BTC first started trading on Mt.Gox on July 17, 2010, its price per coin was $0.05. Today it is $11,000. That works out to be an ROI of more than 22 million percent! (Applicable only if the buyer held it/more all through to this date, and didn’t spend 10,000 of them on pizzas)
At the height of the bull run in 2017, one bitcoin costed $20,000. If you do the math on that, you will immediately realize why BTC’s popularity level is 99,000.
Unhackable
BTC is unhackable. Why?
Because of its underlying distributed ledger arrangement. Every network participant (full nodes and miners) on the Bitcoin network is aware of every transaction that happens.
This means that a hacker will have to take control of the majority of the network to hack Bitcoin through a ‘51% attack’.
But carrying out a 51% attack on the Bitcoin network nowadays is no joke. In the last, the BTC ecosystem has greatly matured and has become pretty robust.
Data shows that the cost of carrying out a network takeover attack on Bitcoin would be ~$550,000 an hour.
Now you know why a company like MicroStrategy bought $425 million worth of bitcoins!
Ease Of Storage And Investment
The digital nature of bitcoins makes it a hugely convenient asset for storage. BTC can be stored in wallets and can be carried anywhere, unlike hard assets like gold or cash.
Since bitcoins exist on the blockchain, they can be accessed from anywhere across the world. When you buy BTC, you don’t purchase physical bitcoins.
You pay for a portion of the blockchain network. This is a hugely useful attribute as it means that BTC is not restricted by a physical form or place of storage.
Apart from this, you can invest in bitcoin anywhere, anytime. Unlike, traditional investment options where you have to deal with tonnes of paperwork and unnecessary formalities, you can buy BTC right from the comfort of your smartphone.
Always-On, Never Sleeps
Yes, you read that right! Contrary to conventional markets, bitcoin markets are on 24X7X365. That’s because there is no human interference in it’s functioning, as BTC transactions are cryptographically secured.
And speaking of transactions, since its inception in 2009, the Bitcoin network has processed monetary transfers with 99.98% uptime. Ever witnessed such efficiency in traditional financial systems? Don’t worry you won’t.
Worldwide Recognition
Over the years, bitcoin’s tremendous success as a value retaining asset has led people to take stop finding faults with it and instead take the crypto asset much too seriously.
BTC has made fans out of Twitter founder and CEO Jack Dorsey, Rich Dad Poor Dad Author Robert Kiyosaki, billionaire hedge fund manager Paul Tudor Jones, cybersecurity magnate John McAfee, Kayne West, Ashton Kutcher, William Shatner, Russell Okung, Mike Tyson, 50 Cent, Elon Musk, and Tony Hawk amongst many more.
Usability As Currency
In a country like Venezuela, bitcoin has become the sole currency for availing goods and commodities as the country reels under a gigantic economic crisis and ‘hyperinflation’.
Bitcoin’s security and fungibility made the Venezuelans give up cash. According to the 2020 Geography of Cryptocurrency Report by blockchain data analytics firm Chainalysis, Venezuela is the third country in the world to adopt bitcoin and other cryptocurrencies in a major way.
Even in India, contrary to misconceptions, a large number of people trust BTC. This is perfectly visible from the latest Edelman Trust Barometer Survey.
As per the report, 73 percent of Indians trust cryptocurrencies and blockchain technology. And 60 percent say that the impact of crypto/blockchain will be positive.
Scarcity
The fact that bitcoin has a limited supply of just 21 million BTC, makes it a very popular asset. Creator Satoshi Nakamoto pre-programmed this feature in the Bitcoin protocol right from the start.
Miners help unlock new bitcoins from the pre-programmed supply through proof-of-work mining. Something in which miners contribute/pool together their hardware’s computing power to verify BTC transactions amid rising difficulty. This is how they win bitcoin rewards for their work and then circulate them in the market by selling some, to offset their production costs.
Also, a technical feature even known as halving which reduces the bitcoin block reward every four years, ensures that powerful miners don’t empty the entire remaining supply. This imparts tremendous value to bitcoin which in turn makes it very popular.
Frequently Asked Questions
How Does Bitcoin Technology Work?
The blockchain is the foundation of Bitcoin. It is a decentralized, distributed ledger that tracks the provenance of digital assets. The data on a blockchain can't be changed by design, making it a real disruptor in industries like payments, cybersecurity, and healthcare.
Is Bitcoin Legal In India?
In India, Bitcoin is not illegal. Because of cryptocurrency's rapid evolution, policymakers and regulators seemed to have recognized the chance to accept the new technology early. From the infamous 'RBI ban' in 2018 to reports of an impending bill banning cryptos in 2021 that has yet to develop, India has seen its fair share of ups and downs when it comes to Bitcoin regulation. Last year, the Supreme Court Of India approved the use of Bitcoin throughout the country. According to the Supreme Court, the existence of Bitcoin or any other cryptocurrency is unregulated but not unlawful.
How Can I Convert Bitcoins To Cash?
Bitcoin may be converted to cash in various ways, including crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer to Peer Transactions. You may do this by using Bitcoin exchanges like WazirX. You may also sell Bitcoin for cash faster and more anonymously through a peer-to-peer marketplace.
How To Invest In Bitcoin?
Bitcoin may be invested in two ways: through mining or exchanges. Bitcoin mining is carried out by high-powered computers that solve challenging computational arithmetic problems that are too difficult to complete by hand and complex enough to tax even the most powerful computers. WazirX, a Bitcoin exchange, is another alternative.
Who Created Bitcoin?
Bitcoin is the first application of the concept of "cryptocurrency," first articulated in 1998 on the cypherpunks mailing list by Wei Dai, who proposed a new form of money that relies on cryptography rather than a central authority to manage its creation and transactions. Satoshi Nakamoto published the initial Bitcoin specification and proof of concept on the cryptography mailing list in 2009. Satoshi exited the project in late 2010, with little information about himself available. Since then, the community has evolved, with numerous people working on Bitcoin. Satoshi's anonymity has sparked unfounded fears, many of which may be traced back to a misunderstanding of Bitcoin's open-source nature.
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
How To Create Bitcoin Account?
Firstly, Go to the WazirX website and sign up. Then, a verification mail will be sent to you. The link sent via verification mail would be available only for a few seconds so make sure you click on the link sent to you as soon as possible, and it will verify your email address successfully. The next step is to set up security, so select the most suitable option for you. After you have set up the security, you will get a choice to either proceed further with or without completing the KYC procedure. After that, you will be directed to the Funds and Transfer page, where you could start depositing Bitcoins to your wallet. You can also deposit INR and then use it to buy Bitcoin for your WazirX Bitcoin wallet.
How Many Bitcoins Are There?
There are 18,730,931.25 Bitcoins in circulation as of June 2021. The total number of Bitcoins that would ever be there is just 21 million. On average, 144 blocks are mined every day, with 6.25 Bitcoins per block. The average number of new Bitcoins mined every day is 900, calculated by multiplying 144 by 6.25.
How Can I Get Bitcoin?
To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process. Following that, you'll be sent to the Funds & Transfers section, where you can begin depositing Bitcoins into your wallet. You may also use INR to fund your WazirX Bitcoin wallet and then use it to purchase Bitcoin.
What Is Bitcoin Used For?
Bitcoin was created as a means of sending money over the internet. The digital currency was designed to be a non-centralized alternative payment system that could be used in the same way as traditional currencies. Bitcoin is being used by an increasing number of businesses and individuals. This includes establishments such as restaurants, apartments, and law firms.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
