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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 Bitcoin Works?
Bitcoin is based on the blockchain, a distributed digital ledger. As the name implies, blockchain is a connected database made up of blocks that hold information about each transaction, such as the date and time, total value, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological sequence, forming a digital chain of blocks. Blockchain is decentralized, meaning a centralized institution does not own it
What Type Of Currency Is Bitcoin?
Bitcoin is a type of digital currency or cryptocurrency. In January 2009, Bitcoin was established. It's based on Satoshi Nakamoto's ideas, which he laid out in a whitepaper. The name of the individual or people who invented the technology remains unknown.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
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.
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.
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.
Is Bitcoin Mining Free?
Bitcoin mining isn't free, but it can be tried on a budget. Bitcoin mining is an essential part of the blockchain ledger's upkeep and development and the act of issuing new Bitcoins. It is accomplished by the use of cutting-edge computers that tackle complicated computational arithmetic problems. The effort of auditor miners is rewarded. They're in charge of ensuring that Bitcoin transactions go off without a fuss and that they're legal.
How Much Is 1 Bitcoin Worth Today?
Check out the current price of Bitcoin on the WazirX exchange. Bitcoin's value is primarily determined by its supply and demand in the market. Other elements have an impact on its worth. Its intrinsic value can also be calculated by calculating the average marginal cost of producing a Bitcoin at any given time, based on the block reward, electricity price, mining hardware energy efficiency, and mining difficulty.
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 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.
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.
