There are over 10,000 cryptocurrencies in existence at the moment, and the market keeps expanding with new tokens. But when someone utters the word crypto, there’s one specific coin that comes to mind, the one that started it all and wrote history – Bitcoin. No other digital currency enjoys the same level of popularity or has managed to surpass its value, although many have tried, so Bitcoin remains the king of cryptocurrencies.
More than a decade has passed since the first blockchain transaction, and Bitcoin is still the leader of the crypto space by market cap and user base, despite the many ups and downs it has experienced over the years. Thirteen years ago, the idea of trading and investing in digital currencies would have sounded outlandish to anyone, even though the concept was not new, and there had been several not-very-successful attempts at creating digital currencies previously. Fast forward to today, and we’re trading cryptos left and right, with Bitcoin as the frontrunner of the cryptocurrency phenomenon.
So, the obvious question is, how did we get here? How did an inconspicuous crypto project pick up steam and manage to attract so many followers? In order to find the answers, we have to take a look back at Bitcoin’s history and the unique characteristics that established it as the most sought-after cryptocurrency.
Bitcoin’s origin story
Bitcoin’s birth remains wrapped in mystery. The project was launched in 2009 by a person or a group of people under the pseudonym Satoshi Nakamoto as an innovative payment system that allowed the transfer of decentralized digital currency over a peer-to-peer network. This meant that people could make transactions without the involvement of third parties like banks or government bodies. The control was entirely in the users’ hands.
Bitcoin emerged at a perfect moment in time, right after the 2008 global financial crisis, so the world was ready to embrace any measure that could provide a solution to the financial hardships it was going through. And a new class of assets backed by groundbreaking technology that provided protection against inflation and could fix many of the shortcomings in the traditional financial system sounded pretty tempting. There was a need in the market, and Bitcoin was conveniently there to fulfill it.
One would think that a project with a creator that no one seemed to know much about would sow mistrust and suspicion among the public, and it did to some extent. But the aura of mystery that surrounded the unknown inventor also ignited people’s curiosity and imagination. All kinds of stories started to emerge, each one more captivating and incredible than the last, fueling the intrigue and interest around Bitcoin.
However, the large-scale adoption of Bitcoin didn’t happen overnight. It was a gradual process that spanned several years, with the Bitcoin price rising steadily after it went live on online exchanges in 2010. As Bitcoin’s value continued to increase, investors took notice and started adding Bitcoin to their portfolios. The project gained visibility, and people got more and more excited about it, which eventually led to the 2017 boom when Bitcoin experienced a record price surge. And just like that, the hype had been created.
The first-mover advantage
While technically, Bitcoin is not the first digital currency created, it is the first one that actually had success. By the time other cryptocurrencies entered the market, which happened in 2011, there were already 8 million Bitcoins in circulation. People had already heard of Bitcoin and were familiarized with the idea of digital currencies.
Other coins emerged in the following years, trying to reiterate Bitcoin’s success, some with better chances than others. The only other cryptocurrency that posed a real threat to Bitcoin’s supremacy was Ethereum, which was launched in 2015. However, Bitcoin managed to preserve the huge advantage it had gained by being the first established digital currency. Bitcoin started in the race long before any other contenders entered the competition, so it had more than enough time to mature and find its way into investors’ portfolios and people’s lives.
Bitcoin as a model and an icon
People tend to associate the entire crypto industry with Bitcoin, which has turned the coin into the image and symbol of the crypto space. Bitcoin was the coin that introduced the concept of digital currencies to the wide public, and that will forever remain embedded in the people’s collective memory.
All the other cryptocurrencies that came after Bitcoin tried to follow in its footsteps. Obviously, each project had its own particularities, and plenty of innovations were brought to the market. But it can’t be denied that Bitcoin served as a source of inspiration and a model for all of them. Even Ethereum’s founder, programmer Vitalik Buterin, who managed to create a network that does a lot more than enable financial transactions, launched his project after being involved in the Bitcoin community and closely studying the famous crypto and its mechanisms.
Although Bitcoin is no stranger to criticism and a lot of crypto enthusiasts deem the technology as outdated, this doesn’t seem to reflect the view of the majority. And that can be proved by the difference in market cap between Bitcoin and the second-largest crypto, Ethereum, which is quite large. The bottom line is that Bitcoin remains far superior to all other crypto networks of today, and there’s no sign of that changing anytime soon.
Bitcoin provides a host of advantages, but the main reason why it’s valuable is that people think it is. It’s that simple. As long as people will foster this belief, Bitcoin will continue to maintain its worth. This seems like a rather weak foundation to build upon and is also one of the reasons why Bitcoin and cryptocurrencies at large are so unpredictable. But it’s this precise volatility that gives Bitcoin and other digital assets their power, as it can lead to substantial returns. Bitcoin embodies the high potential of the crypto market, and people will never grow tired of playing the crypto trading game.