Since the creation of cryptocurrencies in 2009, the whole world has been going gaga over it. In the initial days when it was created, cryptocurrencies were treated only as a form of the digital asset. But with time, its value has increased greatly. Cryptocurrencies are now used as a medium of exchange for goods and services as well.
These days, people do not just invest their money in mutual funds or stock markets, rather, they also invest their money in cryptocurrency. In just a decade, cryptocurrencies value has risen and made the investors gain a huge amount of profit. But there are a lot of cryptocurrencies out there in the market, so which one should you invest your money in?
There are a lot of people who will tell you that Bitcoin is boring and not the right cryptocurrency to invest your money in. But in my opinion, Bitcoin is certainly one of the best cryptocurrencies to invest your money in. You must have seen a lot of Youtubers and Bloggers say why investing in Bitcoin isn't the smart option right now. But that is certainly not true.
So, if you are interested in knowing everything about Bitcoin and what sets it apart from other thousands of cryptocurrencies out there in the market, then this article is for you. So, keep reading the article.
How Did Bitcoin Start?
Before understanding why Bitcoin is better than other cryptocurrencies out there in the market, you must have a little knowledge about Bitcoin's journey. Right from the beginning of 2009 when Bitcoin was first created till 2022, Bitcoin's prices have spiked, fallen greatly, crashed, and again gained their value back. The journey of almost a decade has been quite amazing.
The 2008 Great Recession played a huge role in the creation of the first cryptocurrency, Bitcoin. Nobody knows who created the blockchain, but an individual or a group in the name of Satoshi Nakamoto is known to have created it. He aimed at creating a currency that would not be under centralized authority.
In January 2009, the first block of Bitcoin was mined. It was created to form a currency that would establish peer-to-peer transactions without the involvement of third parties like banks. But back then, nobody thought that cryptocurrencies would ever replace fiat currencies.
But that is not the case in recent times. A few years back, major companies like Tesla announced that they would only accept payments in Bitcoin and not fiat currencies. Likewise, El Salvador also became the first country to legally accept cryptocurrencies along with the dollar as a medium of exchange.
Cryptocurrencies like Bitcoin have not just created great opportunities for investors to earn profits, but also, it has opened a lot of job opportunities. This shows that the world is gradually moving towards a society where blockchain and cryptocurrency will undoubtedly play a huge role.
How Do the Bitcoin Wallets Work?
After investing your money and buying Bitcoins for yourself, you must keep them safe in a wallet. This electronic wallet will store all your Bitcoins safely. You will be provided with a private key to access your Bitcoin whenever you want. Every time you generate a transaction, you will have to use the private key to use your coins.
The Bitcoin wallet must be installed on a device that will store only your private key and not your coins. Your coins will always be stored in the Bitcoin blockchain. But every time you try to generate a transaction, you will have to authorize it with your private key.
There are various wallets available out there, but you must choose the one that meets your requirements.
Types of Bitcoin Wallet
There are various kinds of Bitcoin wallets. Some of them are listed down for you -
Mobile wallet - If you use Bitcoin to make daily payments, a Bitcoin mobile wallet is for you. It will work on your smartphone very easily and you will be able to have access to your Bitcoins anytime you want.
Web wallet - This type of wallet stores your private key online where a third party has control over it. You can use this wallet both on your laptop and on your mobile. You can access your coins whenever you are connected to the internet.
Desktop wallet - These wallets are installed on your computers. It then stores your private keys on your solid-state drives. This wallet is completely offline and thus much safer.
Hardware wallet - This is the most secure form of Bitcoin wallet. It stores your private key in a safe physical device. These are not affected by computer viruses.
Paper wallets - This is a form of a physical wallet, in the form of a paper that stores your private keys. These paper wallets have QR code so that you can scan them anytime you want, type the key to the software wallet and make the transactions easily.
So how is Bitcoin different or even better than other cryptocurrencies? Here are some reasons that will help you understand why -
Bitcoin Works on Rules And Not Rulers
History has proved that leaders have always made decisions that can be questioned. All the recessions and economic depressions have been the result of decisions made by powerful leaders.
As long as the monetary system remains under the centralized government, it will undoubtedly be safe, but also such leaders will always have control over our money. Not all cryptocurrencies are free from rulers and their decisions. Most cryptocurrencies are managed by a group of people whose decisions can shape the future of investors.
But, Bitcoin is different from others, its issuance is predetermined and works on a code so that anybody can see it. Anyone who runs a node on the Bitcoin network has equal opportunities. It does not matter whether they own millions of Bitcoin or even 1 Bitcoin.
Not just that, the person who made it, Satoshi Nakamoto has completely disappeared so no one can be dragged to court for Bitcoin's workings.
Bitcoin is Decentralized
It is through Bitcoin that people achieved true financial sovereignty. Nobody is responsible for your Bitcoin asset other than you. Nobody other than you will be able to access your Bitcoin. The private key will keep your Bitcoins safe, but if you lose it, your Bitcoins will be lost forever.
You might be wondering that every other cryptocurrency is decentralized and thus, this feature doesn't make Bitcoin unique. But that is not entirely true. People who prefer a decentralized form of currency admire it as it can make the financial sector antifragile. It saves the market from getting attacked by government policies.
For example, in China, the government banned the mining of Bitcoin but were they successful? No, even though they tried to shut down Bitcoin, miners moved out of the country and kept mining blocks and processing transactions.
But most of the other cryptocurrencies are not completely decentralized. The group of people has the right to shut off the blockchain completely and let the developers fix issues. So, in the crypto market, it is only Bitcoin that is decentralized in the true sense.
Bitcoin is Censorship-Resistant
In Citizens United, the Supreme Court agreed to the fact that money is a form of speech. And Bitcoin completely fits the bill. In the past few years, we have seen how even famous personalities have been restricted in social media apps like Twitter for their speeches.
Even a few doctors have been banned by the social media platforms during the pandemic as they had spread rumors. In fact, some Canadians also found their bank account frozen by the government as they had donated their money for a certain cause.
In such a situation, Bitcoin fulfills the criteria of being censorship-resistant. Nobody on the network can be blacklisted by someone else. But other cryptos in the market are not censorship-resistant. For example, Ethereum has blocked users from Venezuela and Iran using it as both the countries were enlisted on the US sanction.
Bitcoin is Based on Proof-of-Work
Bitcoin is the only cryptocurrency to operate on "proof of work". All other cryptocurrencies in the market work on “proof of stake”. This means that investors who have the most amount of money “stake” in the cryptocurrency will have the right to change the codes if they vote for it.
The major companies in the market pay politicians a huge amount of money to implement regulations that will be favorable for them and their industry. Similarly, even cryptos other than Bitcoin work in the same way. But Bitcoin treats every user or investor the same way. Every investor is equally important in the network.
Bitcoin can only be mined by the use of energy. This means that Bitcoin is fairly distributed to anyone who can pay for the energy costs. Thus, it is proof of work that will always give Bitcoin an upper hand in the market.
Where is Bitcoin Heading?
So what is Bitcoin headed towards? At the beginning of this year, Bitcoin had a major setback. And experts believe that this year either Bitcoin prices will reach the mark of $ 100 or they will diminish to such a point that they might disappear completely. Back in 2021, Bitcoin was doing well. In just a decade, the value of Bitcoin has appreciated greatly.
Recently, the 19th million Bitcoin has also been mined, which leaves only 2 million more Bitcoin to be mined. But experts believe that is not going to happen before 2140. So, there is still a lot of opportunity for the investors. Not just the investors, but the miners are also earning 6.25 BTC per block mined.
Just a few months ago, a video from the game show “Wheel of Fortune” had gone viral on social media. Footage of that show was uploaded on Facebook that showed a part of the show where the contestants had to guess the answer.
Although the video is quite hilarious, it is also true. Bitcoin is the future. It has been only a decade since Bitcoin has been on the market, but even then, it has created a buzz all over the world. There is no human being who hasn't heard about Bitcoin. And some crypto experts believe that there will be a time in the future when cryptocurrencies like Bitcoin will replace traditional currencies completely.