Binance is the world’s leading exchange and many people use it to trade and track the price of Bitcoin.
Bitcoin is by far the most popular and powerful cryptocurrency available today. From its decentralized nature to the limited security of supply through cryptographic technology, Bitcoin has disrupted the typical financial landscape. Furthermore, it has captured the imagination of investors and enthusiasts alike.
Now, what makes Bitcoin such a special and unique cryptocurrency among hundreds of others? Next, let’s explore the answer to this question.
Decentralization and Peer-to-peer Transaction
Unlike typical currencies, which are issued and regulated by central banks, Bitcoin runs on a decentralized network that runs on a peer-to-peer protocol. It means that all transactions on the Bitcoin network are between users and there is no need for intermediaries such as banks or payments.
Limited and Deflationary Supply
The total supply is around 21 million, which means that only 21 million Bitcoins will exist. This is in stark contrast to typical currencies that may be printed or even issued by central banks. Bitcoin’s limited supply has several implications.
First, it makes Bitcoin a deflationary currency since the supply is fixed and cannot be inflated by monetary policies, including quantitative easing.
The limited supply will also create scarcity, which will increase the price of bitcoins. It has led to speculation and investment in Bitcoin as a potential asset class.
Security and Cryptographic Technology
Bitcoin’s security is another important element that sets it apart from typical currencies. The Bitcoin network uses the latest cryptographic techniques to secure transactions and prevent any type of fraud.
Transactions on Bitcoin networks are verified through challenging mathematical algorithms, which require huge computational power to solve. The process, which is generally known as mining, is where the math puzzles must be solved. The first to solve will validate the transaction and add it to the user’s Blockchain.
Privacy and Pseudonym
Bitcoin transactions are basically pseudonymous. Thus, there is a certain level of privacy to all Bitcoin users, since the real-world identity is not tied to your transactions next time; however, it is important to know that Bitcoin transactions are not completely anonymous, as anyone can view the transaction history and track the flow of funds from one address to another.
Bitcoin users can take steps to improve their privacy. For example, they may use different Bitcoin addresses for different transactions to make it challenging to link Transactions to a single user.
Global Accessibility and Transactions without Borders
Bitcoin is basically a global currency that is not geographically limited. Transactions can be made between users from various countries without the need for intermediaries.
This feature makes Bitcoin transactions fast and cost-effective, compared to typical cross-border transactions, which can be time-consuming and expensive due to the fees and exchange rates involved.
The global accessibility of Bitcoins also makes it one of the best options for people who live in countries with restrictive financial systems or unstable currencies and allows them to have more control over their finances.
All in all, Bitcoin is a revolutionary digital currency that significantly differs from typical currencies and the financial system. It is decentralized and the most prominent way to participate in the Bitcoin ecosystem is through trading and mining.
By Audy Castaneda
