The world is slowly drifting towards implementing digital economies and continues to explore the various scopes of cryptocurrencies. With the growing trend, there also comes the need to learn about the growth associated with cryptocurrencies such as Bitcoin.
The prominence of cryptocurrencies has surfaced since late 2017 and the growth has been unfathomable. Owing to the easy accessibility and freedom that cryptocurrencies offer, its rise can be agreed with.
Increment in Bitcoins by value has given the majority an unimaginable experience, where several economies have adopted the virtual currency and have also accepted it for daily transactions.
Bitcoin vs fiat currencies
Whenever you hear of Bitcoin your mind automatically goes back to the efficiency of money transfers on the internet. A decentralized currency has several benefits apart from having a transparent set of principles. This is very much the reason why cryptocurrencies offer an alternative to fiat currencies which are directly controlled by a centralized banking institution.
When determining the value of a new form of currency it automatically gets compared to fiat currencies which have been in circulation for several decades.
It is the very nature of cryptocurrencies that makes them so interesting and popular on trading platforms register now. Here is a list of the reasons that made cryptocurrencies such as Bitcoin prominent.
The key to maintaining the value of a currency is its supply. When the coin was first created in 2009 it was estimated by developers that the supply of Bitcoin tokens would be around 21 million.
Currently, the supply of Bitcoin is estimated to be around 18 million and is expected to rise by another 1 million by the year 2022. Since the approach to supplying Bitcoins is different from fiat currencies (mostly involving mining), it makes digital currency a more feasible option for the upcoming generations.
One of the key characteristics that help sell Bitcoins is its use of blockchain technology. Most people nowadays are reluctant to use fiat currencies which are governed by a banking institution or the government.
Thus, the decentralized and distributed ledger system makes third party participation difficult meaning that engagement in the Bitcoin network needs to be established on trust in one another, rather than on any other financial institute or the government.
An elaborate protocol of verifications and checks makes it possible for Bitcoins to be secured from interference. This particular flexibility of cryptocurrencies within blockchain technology has helped it gain significant prominence among its users.
When it comes to fiat currencies, durability causes a major problem. Fiat currencies can be manipulated, burned or made unusable. That is not the case with digital currencies since it is not vulnerable to any manual harm. For this very reason, cryptocurrencies such as Bitcoin are gaining tremendous prominence.
Neither can cryptocurrencies be destroyed physically nor can they be misplaced. The only way Bitcoins can be lost is when the user loses the cryptographic password. Unlike fiat currencies, cryptocurrencies exist as long as their record is on the blockchain.
Cryptocurrencies have also gained prominence since they can be exchanged or transferred between parties effortlessly, irrespective of the volume of the transaction. Fiat currencies where transaction of money is expensive, cryptocurrencies offer low transaction fees which makes it a highly acceptable form of currency.
Individuals are often reluctant to carry cash around since it is susceptible to risks such as getting stolen or misplaced. Bitcoin offers a more feasible transaction method which is highly crucial for inaccessibility of currency.
The prominence of cryptocurrencies such as Bitcoin has started to surface as an incredible currency system keeping aside all the confusions and difficulties that one has to face with fiat currencies.
The overwhelming benefits of cryptocurrencies have separated them from fiat currencies although initially, the grounds of comparisons were similar. Bitcoins will continue to hold intrinsic value in the coming years and will continue to remain the same.
An author of Namaste UI, published several articles focused on blogging, business, web design & development, e-commerce, finance, health, lifestyle, marketing, social media, SEO, travel.
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