There is no doubt about the popularity of bitcoin among people of the whole world. The currency comes to the market back in 2009. It is the first digital currency of history. People were not aware of it earlier but then with time, the value of bitcoin start increasing. And now it is the most prized currency in the digital market. However, there is no surety that the currency is valuable for people or not. Moreover, there are lots of faults as well. Let’s discuss everything in detail to know more about bitcoin and its popularity.
Why Is Bitcoin Valuable?
There is no support from the government as well as banks. Hence, it is not famous among all the people. Some people still don’t know about it. In the Bitcoin network, there is an authority that takes care of transactions of bitcoin. There is no authorized authority, such as a government. So even if the transaction goes wrong there is no one to cover it up.
However, some of the features of the cryptocurrency resemble the main currency. It is extremely rare. The only way to make a fake bitcoin is to make a double-spend. This is only possible if the user makes two transactions from the same bitcoin. The system will create a duplicate record then.
Size of the bitcoin network
But the size of the bitcoin is enough to make the double-spending. A total of 51 percent attack is necessary. Here the miner controls half of the network power. By controlling a majority of network power, this group could control the rest of the network and use it to make false records. But this is a very rare case. Because it needs lots of money, efforts, high knowledge or computer. That is something impossible for the same person to have.
Bitcoin fails the utility test. The reason is that there is no use for it in retail transactions. The scarcity of Bitcoin is its main source of value. Only 21 million units can take the benefit from cryptocurrency supply. This is a short number for cryptocurrency.
Scarcity determines the value of the bitcoin. As the supply of cryptocurrency decreases the demand will automatically rise. Investors are ready to invest as much money as possible in cryptocurrency.
Bitcoin, like gold, has limited utility, with primarily industrial applications. Block chain technology is the underlying technology. It is used as a major payment system. One of its most effective applications is in cross-border remittances to increase speed and reduce costs.
Therefore we can say that bitcoin has its perks as well as drawbacks. It depends on people whether they want to see the currency. But the popularity of the currency is still very high among people and is believed to remain the same for this year at least.