It’s not a secret that lots of people think about money as colorful paper rectangles, like cash we use today. But there is no such thing as immutability when it comes to money. In olden days, we used to trade ducks and cows for to pay for commodities and services. Then came durable gold coins, which eventually gave way to paper currency. Nowadays, we have a chance to pay for our pizza or Internet services with virtual currencies like Bitcoin. How come that notwithstanding its wild fluctuations and allegedly dubious nature, Bitcoin is still staying afloat? If you’re intrigued, go on reading our today’s article where we’ll tell you about the legendary Digital Gold and shed some light on its future.
Bitcoin, which is also called Digital Gold, is a relatively new kind of money that’s entirely digital and thus doesn’t require any central authority to work. It’s curious to know that Bitcoin isn’t backed by anything physical. In contrast to its fiat counterparts like as U.S. dollar, pound sterling, or yen, which are all backed by specific countries, Bitcoin lives on its own. But the similar fiat currency idea still applies here. Contrary to the initial Bitcoin prediction, it’s more than evident that Bitcoin still has much to offer. And the main reason Bitcoin remains so popular is because people have trust in cryptocurrency and continue buying it.
So, how does it work? Unlike cash, which is printed by governments, Bitcoin relies on something called the “blockchain.” A simple way to understand this is to imagine a ledger. Every time anyone buys or sells anything related to Bitcoin gets recorded in this “blockchain” ledger. Then it’s copied thousands of times every single hour across multiple computers to make sure everyone’s on the same page. All transaction are grouped into a block and added to the public ledger by a process known as “mining.” This process is used as a way to verify legitimate Bitcoin transactions. They use a different mathematical algorithm to encrypt each transaction and secure it against any fraudulent attempts. All this requires substantial computing power.
Bitcoin has no international transaction fees and, as many would say, no currency regulations either. Just like other cryptocurrencies, such as Litecoin, Ethereum, or Ripple, Bitcoin represents electronic tokens generated by networks of computers to replace traditional money. It has value based on the exchange of conventional currencies and commodities for the tokens through dedicated Internet exchanges. So, should you want to exchange your fiat money for Bitcoin or buy other cryptocurrency, you may take advantage of a reliable exchange.
Bitcoin Price Predictions
In terms of scaling, in 2019, customers saws higher layer infrastructure development rapidly progressing. Suffice it to mention the introduction of sidechain technology including blockstream Liquid network, which gives us a new breadth and depth of use cases of the blockchain. This means that Bitcoin definitely remains a worthwhile investment.
Any seasoned miner knows that the mining reward for Bitcoin or any other cryptocurrency decreases substantially every few years. It’s evident that in 2020, we’ll have much less of a daily supply of Bitcoin that we had in 2019. Alyse Killeen, StillMark Co. founding partner, notes that both cryptocurrency experts and ordinary miners are looking ahead to the 2020 halvening event, which means that the mining reward for Bitcoin will decrease by half. This event is also very likely to lead to the supply shock, which, in turn, will result in greater demand for Digital Gold. So, there’s the anticipation that there will be a broader group of consumers that have access and appetite for Bitcoin and digital money.
Bitcoin Versus Other Cryptocurrencies
Lots of beginner crypto traders wonder if other cryptocurrencies like Ethereum are worth giving a shot. So what actually differentiate Bitcoin from other popular digital coins?
Each cryptocurrency has a different and unique blockchain. Bitcoin was the first blockchain, which cannot but impact its value and overall significance in the market. Bitcoin still remains a dominant leader in the field. It makes almost 55 per cent of the total market cap of the cryptocurrency ecosystem. But what’s the most exciting and uniquely differentiating about Bitcoin is its relatively high level of stability, security, and dependability. Still, this doesn’t necessarily mean that you should forget about investing on other cryptocurrencies. If you set your sights on the cryptomarket, you want to do some research on other cryptocurrencies to minimize the risk of losing your hard-earned money. We suggest that you start off with tried-and-true digital coins like Ethereum, Litecoin, Dash, zcash, Monero, and others.