Why Bitcoin Matters
Bitcoin has ushered in the era of cryptocurrency and is widely recognized as the "digital gold". Despite the emergence of many innovative projects this year, bitcoin still ranks at the top by market cap, becoming a cultural symbol of the industry.
Digital gold with the strongest consensus
Despite Ethereum’s initiation of a new era of blockchain 2.0 with smart contracts, some people still adhere to the “bitcoin maximalism“ and believe that bitcoin’s dominant position among the crypto assets is unshakable.
Bitcoin was the first real-world application of blockchain technology and has accumulated extensive consensus and a large community. It enjoys the highest level of security and decentralization in terms of technology. In the crypto community, a wide range of members firmly believe in the future value of bitcoin, and will hold onto it for the long term. This behavior is called “HODL“.
Drawing on the theories of Adam Smith and Samuelson, the value of Bitcoin can be seen as a self-fulfilling prophecy. It is precisely because the entire cryptocurrency community believes in bitcoin’s special status and long-term value that bitcoin truly possesses value.
The fixed bitcoin supply rule protects it from inflation and asset depreciation
Private property rights are the cornerstone of capitalism and a free society. Even if the government cannot confiscate the fiat currency held by the people, the continuous issuance of money and the resulting inflationary effects will continue to devalue all fiat currency assets. Long-term monetary easing policies coupled with the prevalence of capitalism are like an unfair resource grab. Under inflation, the rich benefit first, and centralized financial institutions become the rule makers of the industry, yet they are the true culprits of financial crises.
Others have suffered not only from the impact of inflation on their purchasing power, but also from the disappearance of their lifelong savings in institutions as they go bankrupt one after another. In “Module 1: Getting Started with Bitcoin”, we mentioned that Satoshi Nakamoto created Bitcoin out of dissatisfaction with this situation. In 2008, he published “Bitcoin: A Peer-to-Peer Electronic Cash System”, and after bitcoin was officially launched in 2009, he left a message in the code of the genesis block “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”, as a sarcastic commentary on the vulnerability of the banking system.
The total supply of bitcoin is fixed at 21 million, with 6.25 BTC being added about every ten minutes. The issuance halves every four years. In addition, it is a decentralized and uncontrollable system. All of these factors make bitcoin a “digital gold” that counteracts inflation and stores value.
Bitcoin remains the top spot among cryptocurrencies in terms of market capitalization and market share
Bitcoin remains the earliest and highest-valued cryptocurrency in the market, consistently holding over 40% of the total cryptocurrency market capitalization.
Due to its high market share, the price of bitcoin often represents the latest state and development of the industry. Some people define the ratio of Bitcoin market capitalization as the total crypto market capitalization as the Bitcoin Dominance index.
A decrease in Bitcoin Dominance indicates a strong interest in altcoin among investors, while an increase in the index suggests the arrival of a bear market, with funds flowing back from altcoins to Bitcoin. This is also known as the “blood-sucking effect” of bitcoin.
Symbol of the Cryptocurrency Market
When investors lose faith in the value of altcoins, they will ultimately return to bitcoin, which has a clearer future, more concentrated consensus, and a more defined value. This is the essence of bitcoin’s “blood-sucking effect” on altcoins. As the first cryptocurrency in human history, bitcoin opened the door to the blockchain industry and became a symbol of decentralization. It undoubtedly has an irreplaceable and unique value.
A digital asset that witnesses the rise and fall of the crypto market and survives the bull and bear markets
Bitcoin was the first-ever cryptocurrency to be practically applied. Tens of thousands of people have joined bitcoin to build a global community, laying the foundation for the cryptocurrency industry. Bitcoin’s birth has inspired the human economy, society, and ideology, and has guided us to reach a new level of trust, consensus, value interpretation, and money development.
Bitcoin transactions are secure, anti-censorship, anonymous, and borderless, making it an alternative payment method that has significant advantages in areas lacking financial services. This has given hope to many people in economically disadvantaged regions.
Although the price of Bitcoin has often fluctuated significantly and has been declared dead many times, it is still widely recognized by the public. It has even cultivated a group of believers with strong consensus, who firmly believe that bitcoin can become a decentralized digital gold that can resist inflation and serves an important store of value.
Looking back at the short history of bitcoin’s birth to the present, all its innovations have become indelible in history. It has become a pioneer in the blockchain industry and has given birth to thousands of cryptocurrencies and decentralized applications. In an era of rapid technological advancement, it is fortunate to witness the launch, development, and even the third halving of bitcoin. No matter where bitcoin is to develop, there is no doubt that it will be a major event in human history.
Highlights
- As the first cryptocurrency, bitcoin has the widest consensus and strongest community foundation, and its security has been verified over a long period of time. Its total supply is fixed, with issuance halved every four years, making it widely regarded as “digital gold” that can store value.
- Bitcoin’s market capitalization has long exceeded 40%. A decrease in the “Bitcoin Dominance” generally indicates a hot market for altcoins, while an increase represents capital inflows, which is also known as the “blood-sucking effect” of bitcoin.
- Bitcoin is the earliest and only digital asset that has gone through 14 years of bull and bear markets. Its advantages such as security, decentralization, and borderless transfer are widely known. It represents the origin, rise and fall, and prosperity of cryptocurrencies and is undoubtedly an important chapter in history.
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Why Bitcoin Matters
Bitcoin has ushered in the era of cryptocurrency and is widely recognized as the "digital gold". Despite the emergence of many innovative projects this year, bitcoin still ranks at the top by market cap, becoming a cultural symbol of the industry.
Digital gold with the strongest consensus
Despite Ethereum’s initiation of a new era of blockchain 2.0 with smart contracts, some people still adhere to the “bitcoin maximalism“ and believe that bitcoin’s dominant position among the crypto assets is unshakable.
Bitcoin was the first real-world application of blockchain technology and has accumulated extensive consensus and a large community. It enjoys the highest level of security and decentralization in terms of technology. In the crypto community, a wide range of members firmly believe in the future value of bitcoin, and will hold onto it for the long term. This behavior is called “HODL“.
Drawing on the theories of Adam Smith and Samuelson, the value of Bitcoin can be seen as a self-fulfilling prophecy. It is precisely because the entire cryptocurrency community believes in bitcoin’s special status and long-term value that bitcoin truly possesses value.
The fixed bitcoin supply rule protects it from inflation and asset depreciation
Private property rights are the cornerstone of capitalism and a free society. Even if the government cannot confiscate the fiat currency held by the people, the continuous issuance of money and the resulting inflationary effects will continue to devalue all fiat currency assets. Long-term monetary easing policies coupled with the prevalence of capitalism are like an unfair resource grab. Under inflation, the rich benefit first, and centralized financial institutions become the rule makers of the industry, yet they are the true culprits of financial crises.
Others have suffered not only from the impact of inflation on their purchasing power, but also from the disappearance of their lifelong savings in institutions as they go bankrupt one after another. In “Module 1: Getting Started with Bitcoin”, we mentioned that Satoshi Nakamoto created Bitcoin out of dissatisfaction with this situation. In 2008, he published “Bitcoin: A Peer-to-Peer Electronic Cash System”, and after bitcoin was officially launched in 2009, he left a message in the code of the genesis block “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”, as a sarcastic commentary on the vulnerability of the banking system.
The total supply of bitcoin is fixed at 21 million, with 6.25 BTC being added about every ten minutes. The issuance halves every four years. In addition, it is a decentralized and uncontrollable system. All of these factors make bitcoin a “digital gold” that counteracts inflation and stores value.
Bitcoin remains the top spot among cryptocurrencies in terms of market capitalization and market share
Bitcoin remains the earliest and highest-valued cryptocurrency in the market, consistently holding over 40% of the total cryptocurrency market capitalization.
Due to its high market share, the price of bitcoin often represents the latest state and development of the industry. Some people define the ratio of Bitcoin market capitalization as the total crypto market capitalization as the Bitcoin Dominance index.
A decrease in Bitcoin Dominance indicates a strong interest in altcoin among investors, while an increase in the index suggests the arrival of a bear market, with funds flowing back from altcoins to Bitcoin. This is also known as the “blood-sucking effect” of bitcoin.
Symbol of the Cryptocurrency Market
When investors lose faith in the value of altcoins, they will ultimately return to bitcoin, which has a clearer future, more concentrated consensus, and a more defined value. This is the essence of bitcoin’s “blood-sucking effect” on altcoins. As the first cryptocurrency in human history, bitcoin opened the door to the blockchain industry and became a symbol of decentralization. It undoubtedly has an irreplaceable and unique value.
A digital asset that witnesses the rise and fall of the crypto market and survives the bull and bear markets
Bitcoin was the first-ever cryptocurrency to be practically applied. Tens of thousands of people have joined bitcoin to build a global community, laying the foundation for the cryptocurrency industry. Bitcoin’s birth has inspired the human economy, society, and ideology, and has guided us to reach a new level of trust, consensus, value interpretation, and money development.
Bitcoin transactions are secure, anti-censorship, anonymous, and borderless, making it an alternative payment method that has significant advantages in areas lacking financial services. This has given hope to many people in economically disadvantaged regions.
Although the price of Bitcoin has often fluctuated significantly and has been declared dead many times, it is still widely recognized by the public. It has even cultivated a group of believers with strong consensus, who firmly believe that bitcoin can become a decentralized digital gold that can resist inflation and serves an important store of value.
Looking back at the short history of bitcoin’s birth to the present, all its innovations have become indelible in history. It has become a pioneer in the blockchain industry and has given birth to thousands of cryptocurrencies and decentralized applications. In an era of rapid technological advancement, it is fortunate to witness the launch, development, and even the third halving of bitcoin. No matter where bitcoin is to develop, there is no doubt that it will be a major event in human history.
Highlights
- As the first cryptocurrency, bitcoin has the widest consensus and strongest community foundation, and its security has been verified over a long period of time. Its total supply is fixed, with issuance halved every four years, making it widely regarded as “digital gold” that can store value.
- Bitcoin’s market capitalization has long exceeded 40%. A decrease in the “Bitcoin Dominance” generally indicates a hot market for altcoins, while an increase represents capital inflows, which is also known as the “blood-sucking effect” of bitcoin.
- Bitcoin is the earliest and only digital asset that has gone through 14 years of bull and bear markets. Its advantages such as security, decentralization, and borderless transfer are widely known. It represents the origin, rise and fall, and prosperity of cryptocurrencies and is undoubtedly an important chapter in history.
🎥・Main Video
📄・Related Articles