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Last Updated on August 17, 2023 by Team Spinfuel
It’s hard to find an individual who has heard of cryptocurrency but doesn’t have a minimal understanding of what Bitcoin is. Discussions concerning cryptocurrencies revolve around this asset, whether the topics relate to its price performance or how to buy Bitcoin. Its value doesn’t only derive from its first-mover status but also from the innovations it inspired in the tech and finance industries.
Any other digital coin has never flipped its dominant position, and the likelihood of it happening is minimal, if not nonexistent. There are only a few times its share has declined below 40%, which is impressive considering the high abundance of assets in the industry and the fast rate at which new ones emerge.
So, what fuels Bitcoin’s value, and why is it still one of the most popular assets worldwide?
Ordinals
Bitcoin ordinals are some of the epoch-making achievements in the Web3 space. Surpassing six months of existence, they’ve stirred up quite a stir in cryptocurrency, drawing divided impressions. Ordinal theory existed by 2022, but it wasn’t until February of this year that the project took off. With more than 350.000 daily inscriptions, they’ve spurred great interest and seen significant activity despite the stagnating fees.
According to the data analysis tracker Glassnode, the bubble is split into two parts. High activity has been registered between the beginning of February, when they broke into the market and the end of April.
NFTs on Bitcoin seemed like a cyberpunk dream not long ago, as the chain doesn’t support their utilization. However, this changed in January and appears to give Bitcoin much value, as ordinals have a bright future ahead. While ordinals and NFTs are often used interchangeably, they aren’t the same. There are crucial differences between the two asset categories that set them apart, such as the fact that ordinals don’t use smart contracts and are more than mere digital tokens.
The potential for new practical use cases grows as the Bitcoin-oriented community dips its toes into the Ordinal realm. Various companies drive innovation and enable users to have a source of income from their art and revenue streams outside the traditional area.
Bitcoin Exchange-Traded Funds (ETFs)
The growing fascination with cryptocurrencies and the increasing attention paid to the ruling digital asset has spurred heightened interest from various stakeholders. This surge in interest has led to a greater demand for additional services and products aimed at enhancing access to the industry for both traders and investors alike. An initiative that has garnered both enthusiasm and strife is the concept of Bitcoin Exchange-Traded Funds (ETFs). Despite the controversy, Bitcoin ETF supporters argue that the intricacies of crypto wallets, exchanges and private keys still pose difficulties and are off-putting for newbies trying to join the crypto world.
ETFs enable participants to gain exposure to the token without directly investing in it or holding the asset. Gaining exposure to Bitcoin without actually having to manage it is appealing to numerous investors looking to profit from its notoriety but without all the complexities involved. Plus, approving ETFs is seen in the crypto community as a method to boost the widespread adoption of Bitcoin and make it mainstream.
Bitcoin ETFs are popping up around the world, but applications for them are under regulatory review in the U.S., and the opinions are split. Progress toward a spot in the Bitcoin ETF remains sluggish, with several stakeholders having already put their ideas forward for this investment vehicle. Numerous proposals are crossing the regulatory desk, but they’re all failing so far.
In Europe, on the other hand, the first Bitcoin ETF was welcomed 12 years after its initial proposal. The delay in approval was caused by the winter the market has been through.
Greener mining
Bitcoin has long been put against the wall for using practices that are not environmentally conscious. Its proof-of-work mechanism that enables the creation and addition of blocks to the chain involves consuming large amounts of energy, which brings many criticisms from environmentalists.
While it was founded to have the energy consumption rate of a small country, it has made some pretty impressive improvements. It is now more reliant on renewable energy, with plants using eco-friendly energy resources springing up around the world. It is helping drive the green trend forward, and with this realization, it removes some of the stigma pressing on the cryptocurrency industry.
Decentralization
Decentralization is the feature that prompted cryptocurrency and related products and projects to popularity. In the conventional financial ecosystem, it is impossible to enable transactions without the oversight and participation of a third party, bringing costs and time delays and creating room for errors. Blockchain technology has achieved this, and for this reason, it is held in high regard. Digital cash transactions are impossible without a financial institution, but with Bitcoin, it’s only necessary to have a digital wallet and an internet connection.
Bitcoin’s network is by all means decentralized because confirming blocks involves a unanimous consensus among all the connected computers in the network. Control isn’t held by a single individual, but is shared by all the users.
Censorship resistance
Examples of governing bodies or institutions seizing wealth and private property without justification are never-ending. Under specific circumstances, some countries’ governing bodies can unwarrantedly confiscate property for public purposes.
There are few ways to exchange financial assets without involvement from a corporation or governing body, and Bitcoin transactions are one of the most popular methods in this regard. Censorship resistance is a highly valued and criticized asset feature, depending on the party involved in the debate.
Bitcoin’s censorship-resistant feature enables transactions that are not reversed, modified, or blocked by any institution, governing body, or individual. This achievement is only possible through the blockchain’s native structure and the decentralized nature of Bitcoin.
Bitcoin’s protocol functions on the principle that no transaction can suffer changes once completed.
Bitcoin permits users to transact freely without the involvement of any additional parties straining the process. As such, it continues to boost economic stability and inspire innovations in the financial system. Given all the developments, practical use cases, and features, it will remain one of the most popular assets worldwide for years to come.
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