As we all know, bitcoin is a popular cryptocurrency, and everyone has heard the name of the bitcoin cryptocurrency. Bitcoin became very popular after its launch, and now it is only one of the currencies with substantial market capitalizations than other cryptocurrencies. There are a lot of factors that help bitcoin to grow because bitcoin is an open-source currency that means anyone in the globe can send and receive it from anyone. Therefore, you can use bitcoin anywhere in the world because it is a global currency. The price of bitcoin at the time of launching was less than one dollar, but the current price of bitcoin at the time of writing this article is 64,775 US dollars, and you can see the enormous price changes. In this article, we will discuss how bitcoin got popular and turned into a considerable value. So without wasting time, let’s explore the absolute truth behind the rise in value.
What is bitcoin?
Bitcoin is the first cryptocurrency that came into existence in 2008 by Satoshi Nakamoto, whose name was listed in bitcoin’s white paper. However, the study does not show whether Satoshi is a single person or group of individuals. Anyways, bitcoin is one of the more popular cryptocurrencies that became more popular a few years after launching in 2008 than other cryptocurrencies. Bitcoin is a decentralized currency that means it is open source, and there are a lot of computers working behind it for smooth functioning. Visit cryptocurrency trends to learn more about bitcoin.
How the price of bitcoin become skyrocket:
The price of bitcoin skyrocketed after a few years of launching because bitcoin is opposite to fiat currency, and there were a lot of problems with the fiat currency. To understand the price boom of bitcoin, first, we have to understand the difference between fiat currency and cryptocurrency and fiat currency problems. Bitcoin has solved all the problems of fiat currency and become a popular currency in the world. So let’s go back to the fiat currency problems that made bitcoin a popular currency after launching. There are the following problems of fiat currency that people face before the bitcoin given below:-
- Domestic currency:- Fiat currency is a domestic currency that means it is different in different countries. Different countries have different currencies, such as India has INR, United states have US dollars, Europe has EURO, England has POUNDs, etc. You cannot use US dollars in India, and you cannot use INR in the United States. It is the biggest problem of fiat currency that many people face, especially people in business or companies because they have to convert the currency, which takes a lot of time and money. But bitcoin is a global currency that means the value of bitcoin will never change in another country. For example, if you send one bitcoin to an outside country, you will receive one bitcoin.
- High fees or charges:- Fiat currency is regulated by third parties such as the government, banks, or financial institutions. You have to pay charges or fees to the third parties for sending, receiving, or storing your money to the banks or in a virtual wallet. When you want to send money abroad, these third parties will charge high fees for converting the currency that is not convenient for everyone, and everyone cannot afford the fees. But bitcoin is an open-source system that means no third parties are involved, so there are no high charges or fees per transaction.
- Low speed: When you use third parties such as banks or other financial institutions for international transactions, the transaction speed will be low because they have to verify the payment from different departments. Still, the bitcoin transactions will verify within ten minutes that is high speed.
- The price will rise in future:- The price of money will decrease with time because it is inflation currency; that is the most significant limitation, but bitcoin is a deflation currency that means the price will increase with time.
So the above are the four problems with fiat currency, but there are a lot of problems, and we cannot explain them in one article. When bitcoin comes into existence, all the problems disappear like magic because bitcoin is only the solution to the problems. When people start using bitcoin, they get a lot of benefits, and by increasing the use, demand starts increasing. By raising the demand, the price also starts rising, so the price of bitcoin has increased unexpectedly.