Bitcoin is the most popular cryptocurrency in the world. It is a peer to peer currency and transaction system that uses a decentralized consensus-based public blockchain. This ledger records all transactions. Although the bitcoin was first proposed by Satoshi Nakamoto in 2008, it was the result of decades of research into cryptography. It was the utopian dream for cryptographers and advocates of free trade to have a decentralized, borderless currency based on blockchain technology. With the rise of bitcoin and other altcoins, their dream has become a reality.
Blockchain
The consensus-based blockchain was used for the first time in 2009, and it was also traded the first time in 2010. The price of bitcoin was 8 cents in July 2010. There were fewer miners and nodes than the tens of thousand that exist right now. In just one year, the price of the new alternative currency rose to $1. It was becoming an attractive prospect for the future. Mining was easy, and people were making good cash trading it and even paying with it in certain cases. In six months, the currency had increased by more than 50% to $2. Although bitcoin’s price isn’t stable at any particular price point, it has been growing in an insane way for some time.
The coin reached a record-breaking $31 price point in July 2011. However, the market quickly realized that it was too expensive compared to the gains it had made on the ground. It corrected it to $2. The price rose to $13 in December 2012, but it was soon going to explode. The price had risen to $266 in just four months, which was the same time it reached $13 in December 2012. Although it corrected itself to $100 later, this huge price increase made Bitcoin a star.
Real World Scenearios
People began discussing real-world scenarios with Bitcoin. I was introduced to the new currency at that point. Although I was skeptical at first, I began to see the benefits of the currency. It didn’t have anyone to manipulate it or impose its will on it. It was only possible to do everything with total consensus, which is what made it strong and free. 2013 was the year that the currency made its breakthrough. Blockchain became a popular topic for Computer Science programs and big companies started to accept bitcoin. Many believed that bitcoin had fulfilled its purpose and would now settle down. The currency gained popularity as bitcoin ATMs were set up all over the globe and other competitors began to flex their muscles on different markets. E
thereum was the first to develop a programmable blockchain, and Ripple and Litecoin were created as cheaper and more efficient alternatives to bitcoin. In January 2017, the magical number of $1000 was reached for the first time. Since then, it has increased four times to September. This is a remarkable feat for a coin that was worth only 8 cents seven years ago. Bitcoin has seen a hard fork that took place on August 1, 2017 and has increased nearly 70% in the seven years since. Even bitcoin cash, which was forked on August 1, 2017, has had some success. It is all due to the popularity of the coin and the stellar blockchain technology behind. It is not a bubble, and the entire crypto world would crash. It is obvious that there is no such bubble, as it has, in fact eroded the shares of money transaction corporations and fiat currencies.
Bitcoin Replacement
Bitcoin isn’t only the oldest cryptocurrency, it really is nevertheless the undisputed king with regards to market capitalization. Nonetheless, the world’s initial crypto/blockchain is fighting some obstacles. Nearly 70% of the full total value of all present cryptocurrencies drops on Bitcoin. The task is troubled by huge power consumption, scaling difficulties, and the issue of what goes on when the block reward would go to zero. During writing this, the Bitcoin cost is sitting at USD 26743.
More recent projects make an effort to address these problems. In the centre of Bitcoin, an adjustment of PoW, as well as alternative database structures like the directed acyclic graph.
Proof-of-Stake
The complex component, Like the hash performance, the likelihood of being able to create a block increases with the amount of coins owned. because the coins cost money, it runs on the lot less energy.
Well-known projects that implement PoS are Algorand, Cardano, or Ethereum 2.0. The proof-of-stake itself still includes a few problems for which you can find different solutions. The projects mentioned they support all smart contracts and so are therefore superior to Bitcoin with regards to flexibility. In the next couple of years, we will need to wait and see if they truly have the potential to overthrow Bitcoin from the throne.
Delegated Proof of Stake
DPoS is very much like PoS. The huge difference is that don’t assume all stakeholder operates a node, but instead delegates the energy represented by the amount of their tokens.
This model facilitates high scalability at the trouble of the executing decentralization. Well-known projects that implement this consensus mechanism are EOS, Tezos, Tron, Nano, Lisk, Ark. The Delegated-proof-of-stake solves a number of the PoS problems, but additionally shares the serious ones with it. Additionally it is important to wait and observe how dangerous dPoS projects could be for Bitcoin.
Directed Acyclic Graphs
A lot more than just the consensus mechanism changes with DAGs. You can find no more the chained blocks, however the transactions are directly chained one to the other. The complete database structure is fundamentally not the same as a blockchain. This eliminates the block delimitation and the duty of confirming is bought out by many nodes at exactly the same time. In theory, this type of high scaling can be done.
In theory, the ambitions of the projects are high. There’s also different methods to implementation with DAGs. Still, it really is too early to state whether it’ll be enough to get your hands on Bitcoin. Enough time will tell.
Conclusion
There are many promising technologies that, at the very least theoretically, technology alone isn’t responsible for a big market capitalization. Where Bitcoin is actually ahead.