Bitcoin
Note: All data in this section updated as of March 30th, 2022
What is Bitcoin?
Bitcoin (“BTC”) is the grandfather of all cryptocurrencies. It was created in 2008 by an unknown person or group of people using the alias Satoshi Nakamoto and currently has the largest market capitalization of any asset in the space.
Bitcoin’s Market Cap is Nearly $1 Trillion
Satoshi created the currency to combat what they saw as the perils of unchecked spending by the government. As such, Bitcoin famously limits its supply to 21 million coins, and often earns the moniker “digital gold” as a result.
A few local and national governments are officially using Bitcoin in some capacity, with one country, El Salvador, adopting it as a legal tender.
What are the Benefits of Bitcoin?
Bitcoin proponents believe that the currency is unique among its peers. The most extreme of them, often called “maxis”, argue that anything else is a “shitcoin”.
While that may be a bit extreme, the currency does have its strong points, including:
Network effect: Bitcoin is by far and away the market leader with over 40% share of all cryptocurrencies and almost 90% share of digital currencies. Although this percentage has been steadily declining, it will likely serve as one of the dominant forces in the spaces for years to come.
Decentralization: While most cryptocurrencies are migrating to a Proof-of-Stake system to lower transaction costs, Bitcoin will continue to use proof of work. While this means that the currency might be more expensive and less environmentally friendly, proponents argue that it’s the most secure and most decentralized method, as it would be extremely difficult for anyone to monopolize the supply of electricity.
Inflation resistance: Many Bitcoin enthusiasts believe its strongest benefit is lies in inflation resistance . In his book The Bitcoin Standard, Saifedean Ammous argues that fiat currencies have been “unsound money” since they went off the gold standard in the 70s. According to Ammous, unsound money leads to recessions and debt, hyper-inflation and even war! By limiting its supply to 21 million BTC, the currency reduces the threat of inflation and therefore (hopefully) mitigates these downsides.
Although Bitcoin is by far the largest digital currency, there are a few other players in the space.
Who are the Other Players in the Space?
Bitcoin dominates the digital currency market holding almost 90% market share. In addition to Bitcoin, other notable projects that can be considered pure “digital currencies” (as opposed to smart contract platforms, stablecoins or tokens designed to run a specific protocol) are Ripple, Dogecoin, Shiba Inu and Wrapped Bitcoin.
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