Bitcoin dominance: The world's top cryptocurrency at your fingertips

ProductNov 18, 2022
Bitcoin dominance: The world's top cryptocurrency at your fingertips

Despite thousands of coins and tokens following in its footsteps, Bitcoin is still the dominant digital asset. This pioneering cryptocurrency epitomizes decentralization: ruled by the free market, it supports quick and secure online transactions from anywhere in the world. Discover how to buy Bitcoin and harness its potential with CoinLoan in our guide.

What is Bitcoin?

Bitcoin is the first fully computerized currency existing on a blockchain. Cryptography and open-source software for peer-to-peer transactions allow it to operate without centralized control.

Furthermore, all transactions are transparent (recorded in a public ledger) and immutable (may not be altered or manipulated). Any changes to the protocol require a majority consensus.

How does Bitcoin work?

Blockchain technology is based on a distributed record (ledger) of blocks, each containing a summary of specific transactions. The entire Bitcoin network relies on nodes — computers with Bitcoin mining software that validate transactions, powering up the blockchain. Its security relies on a consensus algorithm called Proof of Work (PoW).

Mining, the bedrock of PoW, includes adding and verifying a new transaction record after solving a complex puzzle generated by the blockchain. Miners scattered around the world are crucial for Bitcoin's decentralization. No single entity — neither a bank nor a company or government — can control or shut this network down.

Basic principles of Proof of work. Adapted from Ledger
Basic principles of Proof of work. Adapted from Ledger

Validating transactions is not the only way to get BTC. Users can quickly get existing coins from their peers on online exchanges. Hence, one could buy Bitcoin with credit card, debit card, Apple Pay, and other methods.

Bitcoin halving and block rewards

The first node to solve an equation gets a reward, currently 6.25 BTC per block. This amount is cut in half after every 210,000 blocks or roughly every four years, in an event known as Bitcoin halving.

Substantial energy costs and the need for mining rigs are barriers to entry. For example, a 2022 study across 198 countries reveals an average cost of $35,404.03 per BTC, between $1,393.95 (Kuwait) and $246,530.74 (Venezuela).

In terms of energy, mining a single coin requires an estimated 1,449 kilowatt hours (kWh), comparable to the consumption of an average US household over 13 years. Thus, it is an expensive venture to get into, which is why Bitcoin miners join pools.

When was Bitcoin created?

In October 2008, on the heels of the global economic meltdown, an author named Satoshi Nakamoto submitted a Bitcoin whitepaper to a crypto mailing list. This work described the original plan and protocol for the first decentralized currency, "a peer-to-peer electronic cash system."

In the first few years, Bitcoin was worth almost nothing. Then, as the protocol attracted more and more contributors, the coin's monetary value grew along with its use cases.

Who created Bitcoin?

Today, almost 15 years after the coin's inception, the identity of the Bitcoin creator is shrouded in mystery. Nobody knows who Satoshi is, whether it is a group or an individual. The last known communication involving Satoshi dates back to April 2011.

Theories abound, including the one about Satoshi Nakamoto being an acronym for Samsung, Toshiba, Nakamichi, and Motorola. Some believe it was a pseudonym used by a cryptographer like Nick Szabo or Hal Finney. Estimations of Satoshi's holdings also vary from 300,000 to 1,000,000 BTC.

How many bitcoins are there?

According to Satoshi's design, the blockchain will only produce 21 million BTC in total. The current circulating supply is 19.21 million BTC, with an increase of 1.77% year-over-year. This number changes roughly every 10 minutes, as each block adds 6.25 BTC.

Dynamics of Bitcoin supply as of November 17, 2022. Source: YCharts
Dynamics of Bitcoin supply as of November 17, 2022. Source: YCharts

Advantages of Bitcoin

While the user base of all crypto nearly tripled between 2018 and 2020, the veteran coin is still the most popular digital asset. Around 46 million US citizens — over a fifth of the adult population — own some BTC.

Statista's Bitcoin 2022 figures show roughly 80 million wallet users on Blockchain.com as of August 22, 2022. Other estimates mention roughly 200 million BTC wallets held by 106 million users. Here are the four primary advantages that draw people and companies to BTC:

Accessibility

The Bitcoin revolution enabled anyone to exchange funds over the internet beyond the oversight of governments and banks, using only a Bitcoin wallet. By design, BTC is immune to censorship. The blockchain does not allow freezing or reversal of transactions, and it works 24/7.

Since BTC transactions take only a few minutes, the coin facilitates payments for goods and services, cross-border payments, and exchanges. Users can buy or sell BTC quickly at any moment.

Quick and cheap transactions

Using a Bitcoin wallet is faster and cheaper compared to fiat transfers. The Bitcoin transaction fee for a transfer worth hundreds of millions could be as low as $1, depending on the transaction volume and the desired speed.

The average confirmation time as of November 16, 2022, is 143 minutes. Meanwhile, the average Bitcoin transaction fee is $2.207, as opposed to 0.000044 BTC, or $0.957, on August 23, 2022.

Secure transactions

Blockchain technology prevents fraud as every transaction is an encrypted and digitally signed order. Instead of centralized oversight, Bitcoin relies on the mathematics of its transparent algorithm with verifiable predictability. It gives users complete control over their funds.

Only wallet owners know how many bitcoins they have, and they can generate new addresses to protect their data. These addresses work like pseudonyms, as transactions do not require sharing personal information. Unless a wallet address becomes public — for example, if it is shared on social media — transactions may not be linked to the owner's identity.

Transparency

All transactions are public and traceable via Bitcoin block explorer. Using this online tool, you can search for various blockchain data, both real-time and historical, concerning specific blocks, transactions, addresses, and more. For instance, you can check all the received funds and outgoing transactions by pasting a BTC wallet address or a transaction ID into the search box.

  • As the market sees bullish and bearish phases, Bitcoin's volatility can temporarily work against hodlers.
  • There is no guarantee of a minimum valuation as BTC is not pegged to any real-world asset.
  • Given that crypto transactions are irreversible, users should be cautious. If they happen to send BTC to the wrong address or get scammed, it is impossible to freeze or reverse those transactions.
  • Users must safeguard their private keys to maintain access to their Bitcoin wallets.
  • Mining is extremely energy-intensive and, therefore, unsustainable.

Where to buy Bitcoin

The easiest way to get bitcoins is by swapping them for fiat or other assets on a trusted Bitcoin exchange. Depending on the platform, users can buy Bitcoin with debit card or credit card, make a bank transfer, buy Bitcoin with PayPal, and more. Alternatively, they can use a Bitcoin ATM — a kiosk that works like an automatic teller machine.

Some ATMs support both buying and selling of BTC, while others are purchase-only. These machines are found in retail stores, restaurants, malls, and airports in 78 countries. Instead of a bank account, they connect every user to a Bitcoin exchange, letting them pay in cash or by credit card.

Where to store Bitcoin?

You can store your bitcoins in a hardware wallet or keep them on licensed and regulated exchanges or crypto lending platforms. Each Bitcoin wallet has a public address — a string of numbers and English letters. One person can open as many Bitcoin wallets as they wish.

How much is Bitcoin worth?

As of this writing, Bitcoin/USD is trading at $16,521.30, with a 7-day change of +4.9% and a 30-day change of -15.5%. You can use the CoinDesk Bitcoin calculator to see the equivalent in any other fiat currency.

The current price is 76.1% below the Bitcoin all-time high of $69,045 on November 10, 2021. However, Bitcoin dominance (the ratio of BTC market cap to total crypto market cap) stands at 40.59%, and the coin's market cap of over $321 billion is the biggest.

Bitcoin price chart. Source: CoinGecko
Bitcoin price chart. Source: CoinGecko
  • The first milestone for the Bitcoin price was its parity with the US dollar achieved in February 2011. Since then, BTC has seen meteoric, albeit non-linear, growth.
  • In late 2017, BTC started a spectacular surge that created the first Bitcoin billionaires. On November 17, 2017, one BTC was worth around $8,000, and an all-time high of $19,850 came in December. Three years before that, BTC had cost merely $410.20.
  • In 2018, as the first bull market fizzled out, BTC plunged into a nearly 18-month-long “crypto winter.” This bear phase stemmed from multiple factors inherent to the industry, such as a high failure ratio of crypto ICOs, overleveraged investor profiles, and uncertainty about impending regulations.
  • In December 2020, the Bitcoin value returned to the previous all-time high of $19,850 seen in 2017.
  • After rising above the $20,000 level, BTC gained enough momentum to set a new record — $69,045 on November 10, 2021.
  • In May 2022, BTC fell on the news of Terra's collapse. On June 23, 2022, its price descended below $20,000.

Why is Bitcoin going down?

The latest Bitcoin crash was triggered by the downfall of FTX, a global crypto exchange, and Alameda Research, a trading company linked to it. At its peak in 2021, FTX had over one million users. The company's bankruptcy precipitated assets across the crypto market, causing the cumulative market cap to sink.

What market analysts consider?

As of November 17, 2022, the full extent of FTX fallout is unclear, mainly due to the sheer size and interconnections of FTX and Alameda Research with other crypto entities. However, short-term Bitcoin predictions by JP Morgan strategists mention $13,000 as a possible support level. Meanwhile, Tim Draper, a prominent blockchain investor and billionaire, expects BTC to soar to $250,000 in 2023.

The FTX fiasco is not the first shock in Bitcoin price history, as the cryptocurrency is known to be highly volatile. For example, in early 2014, it sank following the hack of Mt. Gox — an exchange handling 70% of BTC transactions. Hundreds of thousands of coins had vanished from its hot wallet, and BTC lost as much as 23% as the website went offline.

According to Google Trends, the search term why is Bitcoin crashing spiked multiple times since 2004, including in 2018, 2021, and (most recently) in May 2022.

Global interest dynamics for why is Bitcoin crashing since 2004. Source: Google Trends
Global interest dynamics for why is Bitcoin crashing since 2004. Source: Google Trends

How to use in Bitcoin on CoinLoan

BTC works with all CoinLoan products — you can exchange, borrow, collateralize, or deposit the coins. For example, users may buy bitcoins for fiat or other digital assets in seconds and grow their crypto via Interest Account. We also accept Wrapped Bitcoin (WBTC), an ERC-20 token pegged to BTC, and Bitcoin Cash (BCH), a Bitcoin fork focused on transactional capabilities.

Our platform offers competitive yield rates, multi-layer security, and the benefits of a regulated financial institution with a zero-incident record. Here are three ways to use BTC on CoinLoan:

BTC loans

You can borrow BTC or WBTC using any asset as collateral. Decide how much room to leave for value fluctuations —  we offer flexible LTV rates from 20% to 70%. In addition, borrowers can choose a standard or customized period from one month to three years.

Alternatively, you can borrow other crypto, stablecoins, or fiat using BTC or WBTC as collateral. Our instant loans work without lock-ins or credit checks – all you need is a registered account with collateralizable assets.

Unlike selling, collateralizing BTC does not trigger a capital gains tax while ensuring asset protection. As a result, some of our users get BTC loans backed by BTC and WBTC loans with WBTC collateral.

BTC, WBTC, and BCH deposits

Move your coins to Interest Account to earn a yield on Bitcoin. CoinLoan provides state-of-the-art asset protection and attractive rates. Pick your flexible deposit option:

  • 5.2% standard APY
  • Up to 7.2% APY with CLT Staking

BTC on CoinLoan Exchange

Buy Bitcoin on our trusted exchange by swapping it for fiat, stablecoins, or other crypto. We offer dozens of asset combinations, including BTC/XRP, BTC/ETH, BTC/XRP, BTC/BCH, BTC/USDT, and BTC/EUR. Our Bitcoin converter is intuitive: Choose the Bitcoin symbol and the second asset ticker, enter the desired amount, and click Exchange.

For wrapping and unwrapping (conversion to WBTC and back), CoinLoaners may use bridges, crypto exchanges like Binance, HitBTC, or Kraken, and exchange sites like Binance Convert, Changelly, or ChangeNow. They may also convert BTC to BCH and BCH to WBTC on our Exchange.

Is Bitcoin a good choice?

Bitcoin is the embodiment of crypto philosophy and free market capitalism. Its spectacular rise has underpinned the growth of the crypto economy. Yet there is still debate over the classification, and while Bitcoin itself is decentralized, laws regulating crypto businesses are fragmented.

Dealing with Bitcoin, like any crypto, is not for the risk-averse. In the past the coin has proven resilient as it recovered from each drop. In the fall of 2022, it even showed an increasing correlation with stocks, moving along with macro drivers.

Still, as the return on investment is not guaranteed, holders should be ready for some downturns in the Bitcoin future. Diverse crypto portfolios mitigate the risk, while regulated platforms ensure secure services. As a licensed financial institution, CoinLoan will safeguard your BTC so you can store it hassle-free. Take advantage of our products to unlock its full potential, and keep track of Bitcoin news to make informed decisions!

Disclaimer:

The information provided by CoinLoan (“we,” “us,” or “our”) in this text is for general informational purposes only. All investment and financial opinions expressed by CoinLoan in this text are from the personal research and open information sources and are intended as educational material. All outlined information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in this text.

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