The Players of the Cryptocurrency Market
Cryptocurrency has become a global phenomenon, and it’s no surprise that the market has grown exponentially over the last decade. As of now, there are over 20,000 different cryptocurrencies and tokens listed on the popular crypto site coinmarketcap.com. With such a vast number of cryptocurrencies, it can be daunting to know which ones to keep an eye on.
The goal is to understand the biggest players since these are the ones that have proven themselves in the market. Let’s start with Bitcoin, which is the original cryptocurrency and has been around for 13 years. For comparison, the first Euro banknotes were launched in 2002. Bitcoin takes up nearly half of the total market value of all cryptocurrencies, including the 20,000 or so coins and tokens listed on coinmarketcap.com.
What is Bitcoin (BTC)?
BTC, or Bitcoin, was initially created under the pseudonym Satoshi Nakamoto as digital cash to be used globally and to circumvent every bank and government entity. Its purpose is to be usable by everyone without any limits and without having to trust any third parties. In recent years, however, it has been considered more like digital gold – a store of value – bought and stored away to hedge against hyperinflation and diversify investment portfolios.
What Makes Bitcoin So Valuable?
The perceived value of Bitcoin comes primarily from two factors: the reliable and trustless nature of the bitcoin network and the scarcity of coins. The bitcoin network is reliable and trustless, meaning transactions are always verifiable and execute definitively and cannot be undone, making it a secure and reliable means of transferring value. This is made possible by the open-source code that underpins the Bitcoin network, which is auditable to anyone with basic knowledge in computer coding. The decentralized nature of the network, with no central authority or intermediary, adds to its security and trustworthiness.
Furthermore, there will only ever be up to 21 million bitcoins created. This feature is hard-coded and cannot be changed, which makes Bitcoin effectively the only asset of its kind with verifiable scarcity. On the other hand, fiat currencies like dollars and euros have been printed to infinity and beyond. For example, 80% of all dollars in circulation have been created in just the last few years. Then there are precious metals like gold and silver, arguably much scarcer than fiat currencies. However, there is no way of knowing how much gold and silver is still to be found in the ground. Large new findings of precious metals can greatly upset the scarcity factor.
In conclusion, with so many cryptocurrencies available in the market, it’s important to understand which ones are worth keeping an eye on. By understanding the biggest players in the market, we can gain insight into which cryptocurrencies have proven themselves over time. Bitcoin, the original cryptocurrency, has continued to be a prominent force in the crypto space for the past 13 years, taking up nearly half of the total market value of all cryptocurrencies. The reliable and trustless nature of the bitcoin network, along with the scarcity of coins, are the two primary factors that contribute to Bitcoin’s perceived value. As a decentralized digital asset, Bitcoin has become a symbol of individual freedom and sovereignty from government control and central banking restrictions. Keep an eye on Bitcoin as it continues to prove itself as a valuable asset in the cryptocurrency market.