Being the first cryptocurrency ever, the Bitcoin has been the leader when it comes to market capitalization. Even years after its release, it remains the dominating cryptocurrency. So, why is that?

What is Bitcoin?

Before we dive into the details of why the Bitcoin leads the market, first we need to explain what exactly it is for those that are not familiar with it.

In layman’s terms, a cryptocurrency is a “byproduct” of blockchain technology. Back in 2008, Satoshi Nakamoto released a whitepaper outlining a money transfer system relying on a peer to peer network. The money in question was Bitcoins. The entire principle lies on top of the blockchain technology, where the decentralized network is the one that carries out the transaction.

Being the first cryptocurrency, Bitcoin opened the doors for other altcoins to be created. In those cases, it is natural for people to assume that any altcoin buzz would remove Bitcoin from the throne. Surprisingly, that is not the case. Even with hundreds of altcoins out there, the Bitcoin is still king of the market.

Why is Bitcoin the market leader?

Several factors come into play, and each one carries its weight.

Popularity

The first and most obvious factor is popularity. Being the first leader in something has its perks. As mentioned previously, the first ever cryptocurrency is the Bitcoin. The digital currency, as Satoshi explained in the whitepaper, relies completely on a decentralized network. With that said, the need for a bank as a middleman is obsolete. With that aside, the general principle behind a decentralized network makes the transfer a lot more secure and tamper-proof.

The trend caught up, and years later, hundreds of other cryptocurrencies began to arise each building its own community, which brings us to the second factor – community.

Community

Being the first cryptocurrency means that the Bitcoin has had more time to build a community of followers and keep them. Every new altcoin is gaining attention and people are getting on board with it. With that said, it is highly unlikely that we will see an altcoin that will build a bigger community than Bitcoin.

Stability

Stability is another advantage that Bitcoin has that keeps it at the top. The attention that comes to life every time a new altcoin comes to the market sometimes manages to cripple Bitcoins price, but that rarely has a negative impact in the long run. In the past, the Bitcoin has had its fair share of ups and downs, especially in 2017.

At the beginning of 2017, the price of Bitcoin was still under $1000. The value kept on rising, and by the middle of November, it reached its an all-time high of almost $20000. It all went downhill after that with the bitcoin dropping to below $4000 at the beginning of 2018. These numbers may seem drastic but are nothing compared to the price changes that other altcoins have, especially after the initial excitement is gone.

If we compare Bitcoin to fiat currencies, we see the same stability, as when compared to other altcoins. The Bitcoins does have a volatile history and will continue to, but it is nothing compared to how much a fiat currency can change its value. Take the Venezuelan Bolivar. Venezuela is currently in a state of hyperinflation, meaning that the price of services and products rise. The International Monetary Fund estimates that Venezuela’s hyperinflation may reach 10 million percent in 2019. We don’t see that with any cryptocurrency.

Availability

Most people will say that fiat currencies are still available to everyone and everywhere. That may be true, but it isn’t as simple as that. It is true that almost every person in the world has access to some kind of fiat currency, but the problem is that each country has its own. That complicates things when you are purchasing something from a different country. If you’re from the UK and you want to purchase something from the US, you’d be making a payment with British Pounds, but you’d be charged for a conversion fee. The fees are generally small, but it is a fee none the less.

Bitcoin, being the most widely spread cryptocurrency out there, doesn’t have the need to be converted. It is a digital currency that isn’t bound to any country’s local currency, meaning that people from the Uk can pay in the US with Bitcoins with no conversion fees.

Speaking of payment and purchases, in recent years we began to see more and more companies accepting cryptocurrencies as a payment method. This is where the Bitcoin shines as well. As we keep mentioning, is the first cryptocurrency on the market, the Bitcoin has shown that it is legit, it works, and it is not a scam. Most companies that accept payment in cryptocurrencies do that in Bitcoins. However, the other cryptocurrencies aren’t completely forgotten. Some companies accept Ethereum or Ripple payments, but that is only a small drop in the water.

Conclusion

For years we have seen the Bitcoin as the top dog in regards to cryptocurrencies. It managed to hold on to its position and is gaining more and more attention and applications. Will we see a change shortly? That’s anyone’s guess. With the current flow of events, it is highly unlikely that we will see another altcoin overtaking the Bitcoin.