Cryptocurrency or Crypto is thought to be a future of this world where physical money takes no more place. Yet some people do not believe in this. However, Cryptocurrency upholds a good future.
The word Cryptocurrency comes from two separate words, “Cryptographic Currency”. Cryptocurrency is used as a short word, and it is a type of digital money.
Bitcoin (BTC) came out as the world’s first cryptocurrency ever. And today, there are more than 1500 cryptocurrencies in the market. Other coins are like Ethereum (ETH), Dogecoin (DOGE), and many more on the go.
There is a similarity in Crypto and other currencies. You can use your Cryptocurrency in daily life. You could go to shopping, buy and eat food, buy clothes, and pay the bills. Or, you can store your cryptocurrencies in your wallet.
Cryptocurrencies are Valuable. Why?
Why was there a need of launching a new system? What are the values of cryptocurrencies? There are many more questions. However, the value of Cryptocurrency is based on three principles: Decentralization, Transferability, and Fixed Supply.
Let’s talk about it.
Traditional Currencies as US Dollar, the British Pound, Pakistani Rupee, etc. are controlled by the government – as US Federal Reserve System. Every country has its own banks, as State Bank of Pakistan, Bank of England, and Bank of Canada etc. So, these institutions or banks control the supply of currency. They can print the money whenever need arises, or they like to.
Fiat Money: When a government prints the money, it is called as “Fiat”. On this currency, government puts a stamp, as $100.
Cryptocurrencies are completely opposite to what is narrated above. No one controls the cryptocurrencies. No bank, a specific person or government can control it. Cryptocurrencies are decentralized – Like Bitcoin (BTC), as the control of Bitcoin is shared to the entire network of BTC users.
Whenever we send traditional currency to anyone, we require an assistance from a third party – like bank – to transfer our currency. This is what does not happen when it comes to cryptocurrency. Cryptocurrency requires no third-party to be transferred.
You neither need to prove your identity to any system, nor will you need to be attaching your personal documentation or information to the transaction. So, cryptocurrencies can be transferred to any place of world to anyone without assistance of any third-party.
The best thing about cryptocurrency so far is its fee. The fee to transfer cryptocurrency from place to another is very low. For instance, you may need to pay $50 as a fee when you send $500 from one bank to another bank – like Western Union – but this does not happen in case of Cryptocurrency. If you want to send $2 Million in Bitcoins, you just need to pay $0.05.
This is the biggest benefit to anyone in the world. If you are a businessman, and want to send huge money, you will need to pay a high fee. Rather, you send money in Bitcoin, and not even half dollar of fee you pay.
Cryptocurrencies have fixed supply – like there can be 21 million Bitcoins only. They are not like traditional fiat currencies that can be printed by government whenever they like.
We know that the number of fiat currencies is increasing day by day, and it is leading to inflation. For example, the total number of US bills is increasing gradually, and this is what makes the value of US bills decrease, and when value decreases, it causes inflation. Cryptocurrencies cause deflation, as there is only a fixed supply.
Bitcoin – The First Cryptocurrency
The era of Cryptocurrency began in 2008 when BTC was introduced online. People were so curious about it. The first Bitcoin took birth in January 2009. The first Bitcoin was released in Bitcoin Blockchain. After that, it made progress by leaps and bounds, and it has hit the value of $68,000 in November 2021.
Bitcoin also introduced the concept of Distributed Ledger – knows as Blockchain. DLT (Distributed Ledger Technology) is a digital system that records the transactions of assets. In this, transactions along with their details are kept safe (recorded) in multiple places at the same period of time. DLT does not work like traditional databases. DLT does not have any kind of central data store, or administration.
Bitcoin remains the most popular cryptocurrency so far because of its Market Cap. There are many coins like ETH, BCH, LTC coming closer to BTC.
Bitcoin is popular because of many reasons listed above as easy to transfer, decentralized, and no need of any bank.
Is Bitcoin the Best Cryptocurrency?
Bitcoin is not the best Cryptocurrency. It is a misconception of people that they think Bitcoin is the best Crypto Coin. It is not the fastest Coin in the world of Crypto. Its transaction takes about 10 minutes, and there are high fees for its transaction, while other cryptocurrencies charge you some cents.
Bitcoin has many drawbacks, and everyone knows it. Even then, it remains popular as it was the first cryptocurrency that opened the gate to the new world of digital money. Otherwise, it is not the best coin.
Creation of Bitcoin – Satoshi Nakamoto
Bitcoin holds a very long, mysterious, curious and interesting story about its creation. There are still some questions that need to be answered regarding the birth of Bitcoin. Let’s dig in it.
Satoshi Nakamoto created first Bitcoin. You may be thinking that it was a computer programmer, or something else like that, right? Do you know what is so mysterious about it? We still do not know who Satoshi Nakamoto was. It was either an individual, a group of people, or a company who created Bitcoin.
Satoshi published the first research paper online about Bitcoin on 31 October 2008. The title of the paper was, “Bitcoin: A Peer-to-Peer Electronic Cash System.”
Satoshi kept working on Bitcoin till the mid of 2010. After that, Satoshi disappeared, and never came back. Satoshi left a very mysterious story for everyone. Satoshi contacted the other core developer, and shared Bitcoin source code to him, named Gavin Adnresen. Furthermore, Satoshi gave many domains to the other members of Bitcoin community.
This all works on “proof-of-work algorithm”, a system developed by Satoshi Nakamoto, which conducts the validation process every 10 minutes. This allows networks to validate, and come to agreement about the state of transaction.
Bitcoin became the first, decentralized digital currency that made a use of Blockchain Technology. And after its success, customers, and merchants accept it.
Growth of BTC
The Bitcoin network was launched in 2009, and you could “mine” it by using an ordinary computer. Or, you could buy bitcoin, paying a fraction of a penny.
The retailers started accepting Bitcoins. Furthermore, software developers started developing Bitcoin tools. In this way, usability and value of Bitcoin grew.
Bitcoin users celebrated when Bitcoin hit $1 in February 2011. A few years later, BTC hit $1400. Bitcoin hit $20,000 in 2017. Moreover, the highest value of Bitcoin was seen in November 2021, which was $68,000.
With the passage of time, pre fixed market cap of Bitcoin is decreasing day by day, it causes the value of BTC to grow. Moreover, it becomes the reason behind the deflation. Also, the value of BTC must be increasing in coming years because of restricted supply. It works opposite to the fiat currencies that cause inflation.
You can also study at this website.
For more, visit this website.