Bitcoin is not a cryptocurrency?

Bitcoin is known as a type of cryptocurrency because it uses cryptography to maintain its security. There are no physical bitcoins, only balances stored in a public ledger to which everyone has transparent access (although each record is encrypted). Let's start with some quick definitions. Blockchain is the technology that allows cryptocurrency to exist (among other things).

Bitcoin is the name of the most well-known cryptocurrency, for which blockchain technology was invented. A cryptocurrency is a medium of exchange, like the US dollar, but it is digital and uses encryption techniques to control the creation of monetary units and verify the transfer of funds. The bitcoin white paper, which sparked the cryptocurrency revolution, envisions an electronic payment system that allows "two willing parties to transact directly with each other without the need for a trusted third party, leaving governments and banks out of the financial loop". In fact, according to Bryan Lotti of Crypto Aquarium, a fraudster who guesses the key code to your Bitcoin wallet has about the same odds as someone who wins the Powerball lottery nine times in a row.

Bitcoin's creator, Satoshi Nakamoto, originally described the need for "an electronic payment system based on cryptographic proof rather than trust". However, bitcoin and other cryptocurrencies are not legal tender, meaning that they are not backed by any government; therefore, consumers or businesses using cryptocurrencies do so at their own risk. If the price of Bitcoin continues to rise over time, users with a small fraction of a single bitcoin will still be able to participate in cryptocurrency-related transactions. Bitcoin is not the only cryptocurrency available, but its market capitalisation is larger than that of the 10 largest cryptocurrencies combined.

Not only is Bitcoin the number one cryptocurrency, but it is also the best known of the more than 5,000 cryptocurrencies that exist today. The market capitalisation of cryptocurrencies follows a trend known as halving, which is when the block rewards received from Bitcoin are halved due to the technologically mandated limiting factors instilled in Bitcoin, which in turn limits the supply of Bitcoin. Ripple uses cryptoassets created by others, rather than mined or earned as in the Bitcoin or Ethereum network. The value argument for Bitcoin is similar to that for gold, a commodity that shares characteristics with cryptocurrency.

The difficulties surrounding cryptocurrency storage and exchange spaces also call into question the usefulness and transferability of Bitcoin. Bitcoin was the first cryptocurrency and is produced using advanced computer software that solves mathematical problems. Bitcoin's technology seems antiquated compared to some of the newer cryptocurrencies that allow greater anonymity for users, faster transaction processing and more sophisticated technical features that facilitate the automatic processing of complex financial transactions. You can also use a service that allows you to connect a debit card to your cryptocurrency account, which means you can use Bitcoin in the same way you would use a credit card.

It designates bitcoin as a commodity, as bitcoin exchanges offer derivative contracts or options on the value of the cryptocurrency.

Faisal Abdul
Faisal Abdul

Extreme internet specialist. Wannabe twitter junkie. Friendly zombie geek. Freelance twitter buff. Professional student. Passionate tv evangelist.

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