Why is everyone scrambling to get a piece of the Bitcoin? What makes it a powerful currency that has potential to replace traditional financial systems? It is these questions that are uppermost in the minds of keen investors. The Bitcoin was first launched a decade ago by Satoshi Nakamoto. It was to be a decentralized digital currency founded on the blockchain that wasn’t issued or regulated by governments.
What gives Bitcoin its power?
- The founder of the Bitcoin stated that it was to have a finite supply. There could only be 21 million Bitcoins and no more. As of now almost 18 million Bitcoins are in circulation. Every 4 years the value of BTC is being halved; supply should not go beyond 19 million by 2022. This is in keeping with this protocol. To change this would need agreement amongst majority of miners. This is again an unlikely occurrence.
- Depending on monetary policies, governments have control over their currencies and make adjustments subject to economic factors, like, the pandemic, for instance. But the Bitcoin is beyond such control; it is not open to inflationary policies of the governments. Until now, the ready-presence of tokens has continued to encourage people to mine. This will change once 21 million coins have been mined. The last coin is expected to be mined in 2140; the scarcity, as a result, will continue to push its prices higher, just like gold.
- If you look at 21 million, the number is much smaller than other currencies. But, interestingly, Bitcoin can be divided up to eight decimal points. Satoshi is the name given to the smallest Bitcoin unit. This also means you can own only a fraction of the Bitcoin, if you cannot afford to own one entire Bitcoin. Since Bitcoins keep going up in terms of value, anyone with even a tiny fraction of this coin is entitled to take part in transactions.
- Bitcoin investments have a higher profit potential, which has been proven to be successful with the use of automated crypto robots. One of the most popular bots in the cryptocurrency market is bitcoin profit. By continuously monitoring price swings, this bot has a high ability to perform autonomous trades. Visit the bitcoin profit website for detailed information.
- The biggest reason for Bitcoin’s power is of course the blockchain. This is a public distributed ledger which is trustless and decentralized. It is governed by a system of verifications and checks that are needed to approve of transactions. Once a block is successfully mined after miners verify it, new coins are generated. The blockchain is one of the most disruptive technologies in recent times which have applications in industries even beyond the crypto world.
- Bitcoins are easily transferred between parties in record time, thanks to cryptoexchanges, wallet apps, and other tools. No matter how big or small the transaction, it is easy and fast. Money-transfers through traditional mediums like banks take longer because processing period is time-consuming. Besides, high fees are involved when transfers take place through credit cards. For any currency, transferability is crucial and the Bitcoin serves this purpose.
- Since the Bitcoin is founded on the blockchain, counterfeiting it is next to impossible. To do that, it would need participation of all miners in the network. Double-spending cannot be done with Bitcoins. This would need a 51% attack where miners have more than 50% control over the network. That is also not possible to achieve because of the amount of computing power it would require.
- Finally, unlike paper currency which can get destroyed or damaged, Bitcoins have no physical existence. They cannot be therefore physically destroyed. This makes the Bitcoin so valuable and powerful. However, they can be hacked or misplaced when an exchange is hacked or if you lose the private keys for accessing your funds.