The first name you think of when we talk about cryptocurrency is Bitcoin. It is the king of the cryptos, but what is BTC getting right?
So many new cryptocurrencies have emerged since the launch of the granddaddy, many with alternative functionality. And yet, BTC remains on top.
What Makes Bitcoin King?
The most obvious answer is that it came first. Bitcoin has been around for the longest, earning it both reputation and trust.
That is one reason it has the largest market share and highest value of any cryptocurrency – currently at least 10 times more valuable than its nearest competitor, Ethereum.
What other characteristics make BTC the most traded cryptocurrency?
Reputation: Cryptocurrencies are, mainly, decentralised. That means a government agency or national bank does not control them. This is one of the attractions of crypto, but also a cause for nervousness among some investors. The fact that Bitcoin has been around such a long time, has become a byword for cryptocurrency, and is so popular, gives wary investors some confidence. The Bitcoin blockchain that BTC is the native token of has shown stability and security, enhancing the currency’s reputation.
Sustainability: Bitcoin is widely bought and sold. It is used by international businesses and even by national governments worldwide. As the most recognised and adopted cryptocurrency, it has, arguably, the best foundations on which to grow its base of users. The growing number of use cases and users points towards a sustainable future. That means BTC could have a potentially profitable future, which investors like.
Scarcity: Bitcoin supply is limited to 21 million. As it has been around so long, more than 19 million of that supply have already been mined. Basic supply and demand rules dictate that the scarcer an asset is, the more people will be willing to pay for it. Of course, the supply of other cryptocurrencies is also limited, but Bitcoin got there first.
What is Bitcoin’s Competition?
Like virtually every cryptocurrency, BTC value took a dive this year as crypto markets sharply declined in the early months.
Despite its value being way below the historic highs, Bitcoin still maintains its crown as King of the Cryptos.
To be honest, it is unlikely to be deposed. But which other coins are considered the biggest challengers in this game of crypto thrones?
ETH
The second-largest cryptocurrency, Ethereum is considered technically superior to Bitcoin by some. Improved transaction speeds have led to some predicting that ETH could replace BTC as a preferred digital currency payment method. If that happens, the value could soar.
XRP
A decade from its launch, XRP is referred to as the ‘establishment’ cryptocurrency because it has support from banks and other financial institutions. Because Ripple is a widely used payment system, with XRP as its native currency, some experts think it could one day challenge the ‘big two’ due to faster and broader adoption.
SOL
Some analysts predict SOL could be more likely to challenge Bitcoin than ETH. That’s because the Solana blockchain, which has SOL as its native token, can complete transactions at a much faster rate. As a guide, Ethereum is said to handle just 15 transactions per second, while Solana can deal with 50,000 in the same time. However, Ethereum 2.0 is on its way, with much faster transactions promised. Co-founder Vitalik Buterin recently claimed Ethereum will be able to handle 100,000 transactions per second when it completes its roadmap, putting it back in contention as heir apparent to BTC.
What is BTC Getting Right?
There are several reasons Bitcoin can be considered the king of cryptocurrencies, including security, scarcity, stability, and ease of use.
The main reason, however, that BTC continues to dominate the market is simple to explain. It has been with us the longest and has been talked about the most.
It has earned a worldwide reputation and many novices see the terms Bitcoin and cryptocurrency as interchangeable.
Think of it like Coca-Cola. Yes, there are many more sodas out there, but Coke was one of the first and has established an international market penetration that few newcomers will ever be able to challenge truly.
However, never say never. Blockchain technology is developing rapidly, and new assets are constantly emerging with important use cases, better functionality, and lower environmental impact.
Cryptocurrency is notoriously volatile, so while Bitcoin rules today, who can honestly say what will happen tomorrow?
