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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 Is Meant By Bitcoin?
Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.
How To Convert Bitcoin To Cash?
There are many ways of converting Bitcoin to cash, such as crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, Peer to Peer Transactions. You can use cryptocurrency exchanges such as WazirX for this. Unlike typical ATMs, which allow you to withdraw money from your bank account, a Bitcoin ATM is a physical location where you may buy and sell Bitcoins using fiat currency. Several websites provide the option of selling Bitcoin in return for a prepaid debit card that may be used just like a standard debit card. You can sell Bitcoin for cash through a peer-to-peer platform in a faster and more anonymous manner.
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 Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
Can Bitcoin Be Converted To Real Money?
Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.
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.
What Is The Meaning Of Bitcoin?
Bitcoin is a type of cryptocurrency that was first introduced in January 2009. It is invented based on the key concepts and notions presented in a whitepaper by Satoshi Nakamoto, a mysterious and pseudonymous figure. The name of the individual or people who invented technology is yet unknown. Bitcoin promises reduced transaction fees than existing online payment methods, and a decentralized authority controls it, unlike government-issued currencies.
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.
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.
