Things to Know about the Most Popular Cryptocurrency ‘Bitcoin’

Things to Know about the Most Popular Cryptocurrency ‘Bitcoin’

Each cryptocurrency has its own story and characteristics. We will discuss below the history of Bitcoin as the most popular and oldest cryptocurrency. However, we should ask if the world’s largest cryptocurrency lost its leading position.

Bitcoin was not the first coin in the crypto world as it was preceded by two trials; one of them came out with ‘Ecash’. However, it did not survive.    

In 2008, Satoshi Nakamoto has announced the true beginning of the cryptocurrency era with the creation of Bitcoin. Thus, Bitcoin is considered the oldest among the current cryptocurrencies.

As for being the most popular coin, this does not need any justification as many do not know the blockchain on which the Bitcoin is based. However, they just know or hear of the currency.

Despite the currency’s popularity, there are still people who confuse it with other terms. In addition, some confuse Bitcoin with blockchain, and others do know whether it is a cryptocurrency or just a digital currency. This is what we will clarify in this story.

What is Bitcoin? What is the purpose of creating it?

Bitcoin is a cryptocurrency that can be used for purchasing several commodities. It is also used as a reward offered to miners.

The main purpose of the cryptocurrency – as declared by its founder – is to cope with the latest economic developments. As for the main impetus behind Bitcoin, it was the global financial crisis and its consequences, especially as the currencies were controlled by the central banks around the world.

Difference between Bitcoin and blockchain

Blockchain is a technology used in registering data or information. In addition, it can be used in registering cryptocurrencies, as well as taxpayers and the amount of funds they pay.

As for Bitcoin, it is a currency that is produced by miners through solving complicated algorithms. Then, the currency data is recorded like other cryptocurrencies on the blockchain network.

Is Bitcoin a cryptocurrency?

As we mentioned in the “Crypto Capsule” series on Cryptolydian website, every cryptocurrency is a digital currency, and the opposite is not true.

However, the Bitcoin encryption is relative, as the currency owner can be tracked in the case of revealing his Internet Protocol (IP). Thus, some cryptocurrencies like Verge (XVG) and Apollo (APL) managed to veil the IP.

Difference between Bitcoin and cryptocurrencies

The Bitcoin founder could not forecast the developments of the cryptocurrency, especially amid the accelerating development of technology and digitization.

Since cryptocurrencies are transboundary, each one of them must have its own characteristics in order to benefit from ICO.

Therefore, all currencies that came after Bitcoin largely focused on having something that distinguishes them from the most famous and oldest currency in the digital world. Accordingly, each currency has unique characteristics.

Did the Bitcoin lose its leading position?

Since the Bitcoin is the first and oldest cryptocurrency, it may become like the aged lion which may be outperformed by its peers.

However, despite the emergence of thousand cryptocurrencies, the Bitcoin has been the most popular currency among traders after the elapse of more than 10 years.     

Pros and cons of Bitcoin

Actually, every man-made thing has pros and cons, and the Bitcoin is not an exception.

The advantages of the Bitcoin include decentralization, mobility, storage, selection and determination of the amount of transaction fees needed for miners. In addition, users do not have to deposit or withdraw the cryptocurrency using credit, direct debit or prepayment cards as all of which require fees.

Bitcoin is also characterized with transparency as all information of owner is found on the Blockchain although such information is encrypted.  

Moreover, it is difficult to counterfeit such coin as it is protected from double spending by blockchain technology and its algorithms.

What also distinguishes Bitcoin is that it does not inflate because there are 21 million Bitcoin. A total of 18.23 million coins have been mined, representing nearly 86.82% of the total number of Bitcoin to be ever produced, according to bitcoinblockhalf website. 

Once 21 million coins are mined, the network will never produce anymore.

As for the disadvantages of the Bitcoin, the cryptocurrencies still face problems in several countries, especially the emerging ones.

Among the problems or disadvantages of Bitcoin is that losing the password of the e-wallet means losing the e-wallet itself.

In addition, the Bitcoin has suffered from high price volatility, which could result in huge losses.

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.