Why is Bitcoin Still the Top Cryptocurrency?

[TL;DR]
Bitcoin is common knowledge at this point: Bitcoin is by far the main access point for anyone getting into crypto whether they are fans of the technology, the communities or just looking to invest and make a profit (which is the case for most investors). Since cryptocurrencies became truly mainstream, the term has been immediately associated with Bitcoin.

Bitcoin’s blockchain has never made a mistake nor suffered an exploit: Nearly all crypto projects, including the likes of Ethereum and Solana, have faced transactional, scaling and programmatic errors at several points of their development. Bitcoin hasn’t, ever, in 13 years.

21 million BTC limit + mining halving = deflationary asset: Bitcoin’s perpetual limit of 21 million units mined plus its mining difficulty being doubled every four years or so (coinciding with market bull runs) makes it a no-brainer when it comes to a solid crypto investment.

Bitcoin is truly, completely decentralized: Most projects are either not fully decentralized or even have very known public figures, such as Ethereum co-founder Vitalik Buterin. While that may sound more attractive for investors at first glance, it’s actually the opposite. No one knows who was behind the development of Bitcoin, and that leaves no opening to put its leadership into doubt - as there isn’t any. All development is anonymous and everyone is pleased as long as Bitcoin works, which it does.

Keywords: Bitcoin still the top cryptocurrency, why is Bitcoin, Bitcoin blockchain, Bitcoin market cap, Bitcoin dominance, Bitcoin investors, Bitcoin halving, Bitcoin mining, 21 million Bitcoin, satoshi nakamoto, Bitcoin is decentralized

[Full Article]
The cryptocurrency market is currently 13 years old. In January of 2009, the very first Bitcoin block was mined along with the activation of the very first blockchain network. Since then, the market has changed to something beyond recognition for those that started off a decade ago; decentralized finance, NFTs, metaverse, Web3, crypto gaming, the list could go on for this entire article.

And yet, there is still one very clear crypto king on top of that hill: Bitcoin. Regardless of how much the market develops, Bitcoin continues to take the podium as the preferred digital asset to invest in and use - with a current market dominance of around 46% compared to the entire market and an average daily trading volume of $18 billion dollars.

It’s natural for the pioneer of any new technology that surfaces in the mainstream to eventually be overshadowed by new competitors; it has happened with browsers after the creation of Netscape, video rentals with Blockbuster, mobile phones with Nokia and Motorola, etc. Why is that not the case for Bitcoin?

In this article, we explain what makes Bitcoin special and why Bitcoin is still the top cryptocurrency - with its top advantages to the general public.


Bitcoin is common knowledge at this point

---

Although this has no relation to the technical aspects that make Bitcoin the top cryptocurrency for so many years, it is the main one that must be addressed. If you ask someone who is not crypto-savvy what the cryptocurrency market is, they’ll most likely reply one of the following two: say they don’t know or respond “it’s like Bitcoin, right?” even though they’ve had no experience with the asset - and they wouldn’t be wrong.

Bitcoin is by far the main access point for anyone getting into crypto whether they are fans of the technology, the communities or just looking to invest and make a profit (which is the case for most investors).

Crypto became legitimately mainstream back in 2017, during the ICO boom when Bitcoin almost hit 20k dollars by the end of the year. At the time, the asset had a much higher market dominance and, since then, it was introduced to people from all walks of life as the reference for the so-called “cryptocurrencies.” Such reference may change someday for future generations, but for the adults present during this period of introduction to the crypto world, the term “crypto” will always be followed in our minds by the word “Bitcoin.”


Bitcoin’s blockchain has never made a mistake nor suffered an exploit

---

New technologies always come with uncertainty and plenty of trial-and-error, and that also applies to Bitcoin and the crypto market as a whole. New blockchains, Layer-1 or 2 projects, and ways of transacting and scale projects have always come with the same old problems that tech has faced since its conception. Mostly, it comes down to hacks and programming errors.

Congestion, transactional problems and scalability issues have happened with Ethereum many times over the past seven years. Solana, currently the people’s favourite “Ethereum killer,” has had its network shut down several times over the past two years either from congestion or programming errors. Cardano, the promised project that would supposedly take over all of crypto by storm, still has not managed to provide anything that certifies its actual utility.

Bitcoin and its blockchain, however, have faced zero transactional errors or exploits in 13 years. Zero. Sure transactions may be slow at times, or a bit more expensive than usual, but nothing ever came to actual faults in the framework. Not a single banking system in the entire world’s history has managed to do that. Not even for a year, let alone thirteen.


21 million BTC limit + mining halving = deflationary asset

---

Such perk that makes Bitcoin a deflationary asset inevitably comes with the presumption that people are also engaged in its value and economy. An asset, like gold, can be deflationary on paper - but that seldom matters if the market itself doesn’t take it’s valuable. Given Bitcoin’s stratospheric rise to its all-time high of 69k dollars per coin, it’s very clear that the market does perceive it as an important asset.

With that in mind, Bitcoin’s creation of an asset limit and halving make it extremely attractive to anyone looking to make a solid long-term investment.

Every four years or so, Bitcoin goes through a process called “halving” - where the computational power required to mine a single Bitcoin doubles - which results in the usual reward being only half of what it previously was, therefore halving. The last halving occurred in 2020 and the next one will be in 2024. Investors have always correlated these halvings to the market pumping into a bull run. The 2016 halving was right before the 2017 bull run, 2020’s almost immediately before and 2024’s… well, who knows, but you get the idea.

Simultaneously, the fact that there will only be 21 million Bitcoin in existence - once they have all been mined, for all eternity - puts a very clear deflationary status to the currency. Sure, gold is labelled as deflationary since it’s limited. Same for silver, copper, what have you. But we don’t really know how much there is of them out there. With Bitcoin, it’s very clear - doesn’t matter if one BTC will be worth 100 thousand, 1 million dollars, any amount of money in the next few years. If you hold one entire Bitcoin, there are only 20.99 million left for billions of people.

There are countless other crypto projects now that hold these same properties but remember; Bitcoin did it first, and it’s still the worldwide reference for what “crypto” means.


Bitcoin is truly, completely decentralized

---

Crypto is often related to decentralization, not only for decentralized financial services and tools, but for the origin of the projects themselves. However, you might be surprised to hear that most projects are not decentralized when it comes to their actual development. Even Ethereum, under development under the Ethereum Foundation, has suffered many centralization issues in the past. Not only so, but the figures behind these major novelties are very public. Vitalik Buterin for Ethereum, Charles Hoskinson for Cardano, Do Kwon for Terra, the list goes on.

Bitcoin, on the other hand, is fully decentralized to the core. Not only is the project and its contributors without a fixed hierarchy of development, but even the creators behind the cryptocurrency are still completely anonymous. It’s been 13 years since Bitcoin’s conception and no one has any idea who Satoshi Nakamoto is. Decentralization is this magic word in crypto that is not quite understood by most investors, but Bitcoin really takes it to the extreme by being an entirely anonymous project from the very start.

You might be asking yourself, isn’t it better for people to know the faces behind those projects so investors feel more confident to invest? It’s a reasonable rationale but, as it turns out, not really. In fact, it might work the other way around. One example of that is with Elon Musk. An amazing entrepreneur, for sure, but one that loves to get involved in several controversies - and most of such make investors and stakeholders pretty angry.

Under full decentralization, it leaves no room for their public personas to put the projects into question and it also doesn’t matter who is behind them as long as it works. In the case of Bitcoin it does work, and it works flawlessly.






Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.