The 3 Bitcoin’s Properties That Make It Unique In The Industry
The combination of these 3 properties makes all the difference for Bitcoin.
Bitcoin is the hegemonic leader in the cryptocurrency industry. If you still doubted it, I simply invite you to look at the domination of Bitcoin on the whole market at the end of 2019. Thus, it is again above 65%.
Despite this, many people still doubt Bitcoin and continue to look for cryptocurrencies that could do better than Bitcoin and why not supplant it in the future. Indeed, the Bitcoin seems to them less technologically advanced than the much more recent cryptocurrency projects that promise mountains and wonders.
These promises are tempting, but you must not forget that they are only promises.
Bitcoin is not a promise but a reality today with a capitalization that exceeds 135 billion dollars.
In the same way, some are also looking at what The Next Big Thing could be that would replace the Bitcoin even though the Bitcoin is already The Next Big Thing.
The success of Bitcoin is exceptional and will continue to be so in the future because Bitcoin has 3 fundamental properties that make it unique in the industry.
1. Bitcoin Is Scarce
When the Bitcoin was designed, Satoshi Nakamoto decided to set the maximum quantity of Bitcoins that could be put into circulation at 21 million. Satoshi Nakamoto’s choice was refuted and aimed to make Bitcoin a deflationary currency.
The money supply of Bitcoin is known to all and will not change.
This scarcity of Bitcoin is essential and gives it its full value. Indeed, everything that is scarce is de facto precious. Another point to consider is that nearly 4 million Bitcoins would be lost at the moment.
Thus, the maximum quantity of Bitcoins that will be put into circulation will be well below 21 million and probably closer to 17 million BTC.
In addition, Satoshi Nakamoto has planned a gradual reduction in the number of Bitcoins that are granted as a reward to miners in charge of validating transactions on the network. This reduction occurs every 210,000 mined blocks and is called Bitcoin Halving.
The next Bitcoin Halving is expected in May 2020 and will decrease the reward from 12.5 BTC to 6.25 BTC. The creation of new Bitcoins will become even scarcer, which will drive up the price of Bitcoin. And this will continue until 2140 when all Bitcoins will have been mined.
Finally, the way in which new Bitcoins are created through mining is also specific and contributes to the value of Bitcoin.
The creation of new Bitcoins, via mining, consumes a lot of energy.
The good news is that a recent study has just shown that Bitcoin’s carbon footprint is not as excessive as expected and that 74% of the energy consumed by Bitcoin mining is generated by renewables.
2. Bitcoin Is Decentralized
The second major property at the base of the immense Bitcoin is its decentralization. Bitcoin is a Blockchain permissionless and trustless that allows anyone to become a node in order to participate in the validation of blocks of transactions.
The validation of Bitcoin transactions is performed by computers around the world.
With Bitcoin, there is no need for trusted third parties to validate transactions. It is the network, based on the Bitcoin source code, that decides whether or not a transaction is valid thanks to the computing power of the participating computers.
Some sad minds question the decentralization of Bitcoin by arguing that mining activities are now centralized within large mining farms.
While it is true that mining activities on the Bitcoin Blockchain may have tended to be centralized for several months, this situation is by no means definitive.
There was nothing to prevent new mining farms from starting up, as will soon be the case in Texas, and registering on the Bitcoin network in order to better distribute mining activities throughout the world.
3. Bitcoin Is Digital
Bitcoin is the first successful implementation of a digital, Peer-to-Peer and decentralized currency. In addition, Bitcoin is totally transparent since everyone can access all Bitcoin transactions carried out since its creation. Finally, Bitcoin transactions are unalterable, which guarantees the reliability of the network.
The Millennials generation is in demand for a fully digital payment solution like Bitcoin.
The Millenials who are expected to take power in the future are particularly fond of Bitcoin and cryptocurrencies in general. Indeed, Bitcoin corresponds perfectly to their consumption patterns.
Bitcoin will therefore see its use increase as Millennials and future generations enter the workforce.
Thus, it is quite likely that this future generation will require to be paid in Bitcoins in the future. In the long run, Bitcoin could well become a real alternative to the current monetary system, which many consider deficient.
The Combination Of These 3 Properties Makes Bitcoin Unique
There are already different things that have one or two of the properties I have just described here. Thus, gold is something very scarce, just like Bitcoin, but also decentralized. In this sense, it constitutes a real store of value.
However, gold is not digital unlike Bitcoin.
The shares of a listed company are limited and therefore scarce. In addition, they are digital. However, they are centralized. The securities therefore do not have the 3 properties that make Bitcoin unique.
The Peer-to-Peer BitTorrent data transfer protocol makes it easy to download a wide range of audio and video content. This network is totally decentralized and digital. Nevertheless, all the content is available in abundance, so there is no such scarcity that would give value.
Bitcoin is unique in the industry because it combines these 3 properties: scarcity, decentralization and digital.
Bitcoin is already The Next Big Thing and you should not look any further for the great revolution that will happen in the future. It is already there before your eyes and you must absolutely grab the moving train while it is still possible.