Everyone has been a witness to the meteoric rise of the Bitcoin in recent months. What has been most surprising is how this crypto managed to hold its ground at a time when the global pandemic had ravaged most economies. Bitcoin emerged as a safe haven asset much like gold. It was the first decentralized cryptocurrency to make its debut in 2009 when Satoshi Nakamoto created it.
The idea behind the Bitcoin was to have a peer-to-peer payment system. It originated as open-source software for facilitating money transfers. Transactions could be conducted between parties without the presence of an intermediary. The crypto was founded on the blockchain technology. The blockchain was a distributed ledger offering a secure and low-cost method for conducting P2P transfers.
How Bitcoin differs from other Cryptocurrencies:
- Bitcoin was created to streamline and quicken transactions in the absence of government regulations. Cryptos were introduced to provide secure and low-cost transfers.
- Bitcoin continues to dominate the crypto world as the most popular crypto till date. Other cryptos have been launched since the Bitcoin but their shares are far less compared to Bitcoin.
- Bitcoins seeks to lower cost of influencers and lessen transaction times. Cryptos seek to exchange goods or services in a secure environment with zero or little governmental intervention.
- Bitcoin seeks to be anonymous; while we can view transactions we cannot identify the parties engaged in them. Many cryptos that were launched afterwards follow transparency in transactions making them suitable for application in different industries.
- Investors have started buying altcoins to hedge against the Bitcoin. The reason behind this is that even if Bitcoins start to plummet the altcoins will not have a setback. It is also hoped that altcoins will have future utility that will probably allow them to surpass even the Bitcoin. For instance, if the Bitcoin were to die because of a technical glitch, an economic, or consensus flaw, altcoins could survive. Technical flaws may make the coin vulnerable and the consensus code could be exploited. When this is detected on time, it can be resolved. But if not detected, it can lead prices to plummet.
- Most altcoins will have technical distinctions when compared with Bitcoins. This is exactly why investors choose to buy them. There is hope that one day altcoins will take over because they will turn out to be more useful. But if altcoins do show more utility, chances are that the Bitcoin will also incorporate those features to become more useful. So, altcoins basically have to compete against Bitcoins and also entrepreneurs who are constantly upgrading Bitcoins.
- The biggest advantage which Bitcoins enjoy over others is proven security and network effect. Bitcoin has proved to be a store-of-value and has retained this position for the last decade. Moreover, Bitcoin is more accessible as it is available in more exchanges and more merchants handle it. Bitcoin boasts of the biggest developer ecosystem and has far more implementations compared to any altcoin.
These are some of the striking differences between Bitcoins and other cryptos and altcoins. With Bitcoin growing further, new utility can be discovered in the future. Other cryptos are threatened by the prospect of them falling into disuse. Bitcoin has managed to take over the field and established an ecosystem complete with resources to back it. It is backed by entrepreneurship and stability making it rather difficult for altcoins to compete against it.