Bitcoin was launched some 13 years ago, triggering a chain of events that would lead to the birth and development of the cryptocurrency industry. One price jump after another, Bitcoin’s value reached incredible heights in a very short period of time, and so began people’s fascination with the original cryptocurrency.
Shortly after Bitcoin came to public attention, other crypto projects started emerging on the market, all of them aiming to replicate Bitcoin’s success and maybe one day overtake the leader of the pack. So, Bitcoin paved the way for the expansion of the cryptocurrency environment and the evolution of the financial system, and that’s how the whole world got caught up in the crypto whirlwind.
Despite all the trials and tribulations, the growing pains and the numerous fluctuations in the market, Bitcoin remains at the top of the game. And even if the competition in the crypto space is growing more intense by the day, with new projects – over 10,000, to be more precise – and enhanced functionalities, there’s no real threat to Bitcoin’s dominance on the horizon.
Whether you’re a Bitcoin fan or not, you may want to know how this crypto that started from nothing got to maintain its supremacy for so long in less than favorable conditions.
The first mover advantage
Bitcoin has something that none of the other coins have – the first-mover advantage. As the first-ever crypto to gain mainstream recognition, Bitcoin has managed to build a strong brand and become the face of the industry that it created all on its own. By achieving something that no one else had managed to do before, Bitcoin gained an immense advantage over its competitors from the very beginning. You’d think that the increasing number of crypto projects would diminish this advantage, but the exact opposite happened – as time went by, the gap between Bitcoin and its peers got bigger and bigger.
Bitcoin also served as the model or the source of inspiration for the development of other crypto projects. Even though every new crypto that’s being launched on the market strives to bring something new and different, they’re still at least partly based on the ideas and the concepts popularized by Bitcoin.
Most people know what Bitcoin is and tend to associate the entire cryptocurrency space with it. Not the same thing can be said about other coins, which may perform well by looking at the numbers, but they don’t enjoy the same level of popularity. Google search trends further reinforce this superior status. Bitcoin is the most searched crypto-related keyword, compared to other popular terms like Ethereum or cryptocurrency.
A track history of success
Everyone knows that the cryptocurrency market is inherently volatile. Bitcoin price has fluctuated over the years, but that’s something that applies to all cryptos. What separates Bitcoin from the rest of the crowd is that it managed to weather all the storms and still hold on to its position as leader. Other initiatives have either faded into obscurity or got completely erased from the crypto map.
Many argue that Bitcoin hasn’t been around for long enough to prove its utility and reliability. However, Bitcoin is the first and the oldest cryptocurrency on the market. No other project has experienced as many changes or as many cycles of rise and decline as Bitcoin. And after every plunge, Bitcoin invariably recovered and continued to dominate the crypto sphere. It may be true that some of these challenges have brought its flaws and drawbacks to light, but they also highlighted the project’s resilience and thus boosted its credibility.
Decentralization is probably the most important feature of digital currencies and the number one reason for their incredible popularity. Unlike fiat money or other types of assets, cryptos don’t rely on a central authority for validation or transaction supervision. There’s no third party that controls or regulates digital currencies. All transactions are carried out over a peer-to-peer blockchain network, and thus the need for a middleman to facilitate these actions is completely eliminated.
Decentralization has become a major buzzword in the crypto environment, leading people to believe that all cryptocurrency projects are decentralized when in fact, only a handful of them are, Bitcoin included. No one owns Bitcoin, and no one can control it. Being a truly democratic system, there’s zero chance of an entity that may not have the users’ best interest at heart interfering in the functioning of the network.
Community and innovation
Many point out Bitcoin’s outdated technology as one of its biggest drawbacks. Unlike other cryptocurrencies out there, it’s not as easy for Bitcoin to implement updates or make any changes to its network due to the huge number of users it has amassed over the years. In order to make an upgrade, community consensus is required, which is incredibly difficult to achieve.
However, what many believe to be an innovation deterrent is, in fact, a major booster for Bitcoin. Given the large number of users on the network, Bitcoin benefits from something that’s known as the network effect or Metcalfe’s Law which states that the value of a system is proportional to the square of the number of connected users in the system.
In other words, more users translate into enhanced value and utility, which then attracts even more users to Bitcoin’s blockchain and so on. The strong community around Bitcoin and the ever-increasing number of people and companies that make use of it fuel innovation and improve the network’s performance. People need to look beyond Bitcoin’s blockchain and take into account the entire ecosystem that developed around it over time.
In conclusion, Bitcoin possesses many attributes that provide a major competitive advantage over other players in the market. In order for Bitcoin to be torn from the throne, another crypto project with just as much value, credibility and popularity would need to emerge, which is highly unlikely in the current situation.