Bitcoin as the Reserve Cryptocurrency

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Is Bitcoin the reserve cryptocurrency? Many people have asked this question due to Bitcoin’s dominance. Here is the answer.

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Most people know Bitcoin as a decentralized virtual currency and the first successful blockchain. This digital currency has an open-source code. That means it has many experiments and adaptations that people call altcoins.

And altcoin enthusiasts have always made wild-eyed proclamations that some other cryptocurrencies will eventually dethrone Bitcoin. However, Bitcoin has always been the most dominant digital currency. Some of the available altcoins today are pure hype because their developers copy the source code to make quick money by scamming individuals on their pump and dump programs.

Some coins offer better features like smart contracts, scalability, and speed. Some even have increased innovations. However, Bitcoin continues to dominate the cryptocurrency world. And this makes Bitcoin the decentralized reserve digital currency.

People measure value in the markets by comparing the value of one item to that of the other. And one currency always becomes a dominant option for comparing other tradable items’ values. And in the cryptocurrency world, people compare the altcoins’ values to that of Bitcoin. You will notice this when buying cryptocurrencies on platforms like¬†Crypto Revolt. Such platforms allow you to purchase cryptocurrencies like Bitcoin with fiat money. Here’s why Bitcoin is the reserve cryptocurrency.

 

Secure Blockchain

Bitcoin represents a time-tested and peer-reviewed blockchain. This cryptocurrency has functioned correctly for over a decade, and it has also survived several network attacks. What’s more, Bitcoin has a high hashing power for securing transactions. And this makes it an expensive blockchain for conducting a 51% attack.

Some individuals think Bitcoin is an outdated blockchain because it doesn’t have the sophistication of new blockchains. But this cryptocurrency’s simplicity is its strength. That’s because it minimizes security vulnerabilities for network users.

New blockchains could pave the way for innovations. However, they are experimental, and some have suffered multiple bugs in their initial stages.

 

Stability and Liquidity

Bitcoin beats all the other cryptocurrencies when it comes to price stability and liquidity. Most people use Bitcoin as the gateway for purchasing other cryptocurrencies. That’s because most crypto exchanges feature Bitcoin with fiat pairings.

When crypto prices go sideways, Bitcoin remains at the top in terms of trading volumes. Most crypto exchanges pair other digital currencies against Bitcoin. And this counts towards its large trading volume.

Liquid markets have improved price stability. But a stable price for Bitcoin can create bad trading conditions while giving it more utility as a worldwide currency. Bitcoin’s stability minimizes the merchants’ risks while enabling traders to calculate price movements for the other digital currencies before locking in profits.

 

Value Storage

Liquidity, stability, and security make Bitcoin a long-term value storage asset. Other digital currencies may have bull runs. However, users have not determined the ones that retain value over the long run.

Mathematics regulates Bitcoin’s inflation due to its fixed supply. Unlike most new digital currencies and ICOs, Bitcoin has completely voluntary development, and no centralized entity or organization can control the network of this cryptocurrency.

Unlike most new digital currencies, Bitcoin has the most robust infrastructure. And this adds to its use as a currency. Most traditional investors see Bitcoin as a unique asset class. That’s why finding it in the current economy is not easy.

 

Final Thoughts

Developers may come up with more blockchain projects and try to beat Bitcoin. However, the best approach is not attempting to beat Bitcoin but trying to meet the needs of their other markets. Bitcoin has the highest market capitalization. Since Bitcoin is the dominant currency that traders and investors use to measure the values of the other virtual currencies, it qualifies as a digital reserve currency.

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