What Is Bitcoin: Defining What Makes a Cryptocurrency Bitcoin

What is Bitcoin: Defining What Makes a Cryptocurrency Bitcoin

Bitcoin is the most widely used cryptocurrency across the globe. This is attributed to its value, both in price and market cap. With over 10 million Bitcoin wallets in existence, many people have clearly invested in the technology and are eager to make use of its easy and secure transactions. The impressive user base adds up to the credibility of bitcoin and attracts more and more investors and trade participants. But, what makes it Bitcoin?

What Makes Bitcoin Bitcoin?

Bitcoin has continued to grow in popularity, and several investors are trading bitcoin on various exchanges on a daily basis. The magnificent growth that bitcoin experienced in 2017 is unrivaled, and even with the emergence of more than 1,700 rival cryptocurrencies, bitcoin’s value remains superior. Here are some features that make bitcoin bitcoin:

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Bitcoin is a virtual currency that isn’t regulated by any central authority, meaning that buyers and sellers have the full control of bitcoin operations. Nobody and no country can control bitcoin prices by flooding the market with more units. Since only 21 million bitcoins are in circulation at any given time (until more is mined over time), bitcoin is a truly global currency that will still be robust when the world’s economies fail.

The Valuable Nature of Bitcoin

It is crazy that a single bitcoin can be worth hundreds of dollars. So, what makes bitcoin valuable? First, bitcoins are scarce and useful. Let’s consider gold as a currency. The amount of gold on earth is limited, and as people strive to mine more gold, there is always a diminishing amount of gold left and it becomes even harder and more expensive to mine. Bitcoin is based on the same concept. There are only 21 million bitcoins in existence, and as time goes by, it becomes more difficult to mine.

Other than being scarce, bitcoin is very useful as it provides sound and predictable monetary policy that allows all stakeholders to verify any transaction. Bitcoin holders can see when new blocks are created and how many bitcoins are in circulation. Bitcoin is a censorship-resistant currency, and no third party entity can block your transactions or close down your account.

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Advantages of Bitcoin Over Other Cryptocurrencies

What makes bitcoin bitcoin is the fact that it’s embraced and accepted by many people from across the globe, and there are several reasons for that:

Freedom to Pay. You can send or receive bitcoin payments from across the globe without worrying about limitations of cross-border transactions. Since Bitcoin has no central regulatory authority, you have full control of your money.

Transparency of Information. Bitcoin runs on blockchain technology which allows the public to see the final transactions while keeping your personal information secure. In other words, your wallet address is visible, but your details are not.

Vendors Have Fewer Risks. More online vendors are now accepting bitcoin payments due to the reduced risks. Once a client makes payments in bitcoin, the transaction cannot be reversed. Sellers are therefore protected from losses that often arise from fraud.

Low Fees. Bitcoin offers low fees, though the charges will depend on the exchange you’re using. However, there is very little or no fee for bitcoin to bitcoin transactions. Transactions with higher fees are often prioritized in the network, making the transaction times shorter.

Disadvantages of Bitcoin

With the above fabulous advantages, everything might seem rainbows and sunshine with bitcoin. However, bitcoin still has a few hitches that need to be ironed out. The risk and volatility of the cryptocurrency is still something to worry about. Some investors argue that the volatility is both an advantage and a disadvantage depending on how you look at it. Bitcoin prices are still very volatile for a few reasons, however, when more businesses, vendors, and agencies accept the coin, prices might eventually settle.

Finally, some experts believe that bitcoin is not fully developed to handle a myriad of current and future challenges. More features, tools, and services are still being developed to reap maximum benefits from the impressive potential that the cryptocurrency exhibits.

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Jack Warner is an accomplished cybersecurity expert with years of experience under his belt at TechWarn, a trusted digital agency to world-class cybersecurity companies. He’s passionate about all things digital, from Bitcoin to Android apps, and loves sharing his ideas online.