Crypto

Could Bitcoin ever lose its unofficial status as the king of crypto?

Could Bitcoin ever lose its status

When we think about it, cryptocurrency and Blockchain are new technologies. The idea of a blockchain technology first emerged in 1991, and the first whitepaper of a blockchain-based cryptocurrency was released in 2008.

This whitepaper was created by an anonymous person under the pseudonym Satorshi Nakamoto, and explained how blockchain technology could make a cryptocurrency, Bitcoin, be a fully decentralized peer-to-peer network. Many people consider the release of the Bitcoin whitepaper as the invention of blockchain technology. The first block ever minted for Bitcoin, the Genesis block, was minted in 2009 and marks the start of Bitcoin’s existence.

Since then, many cryptocurrencies have emerged and failed. According to many analysts, Bitcoin has experienced 4 bull runs so far, and is now in its 5th bull run.

When we pull the historical top 100 coins by market cap during the peak of each of these bull runs, we notice something quite obvious: Bitcoin is always the largest cryptocurrency by market cap; most of the other projects created tend to die away over time.

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Bitcoin is the largest cryptocurrency by market cap

Cryptocurrencies by Market Cap. Via [Coins Market Cap] Note: Past performance does not guarantee future results. Historical Snapshots are for illustrative purposes only.

While many altcoins may rise and fall, Bitcoin remains the largest cryptocurrency by market cap. What is interesting is how dominant Bitcoin has remained in terms of market cap: there was only one point in history when Bitcoin held less than 40% of the entire crypto market cap!

Due to the fact that Bitcoin has been the largest crypto by market cap since its initial launch in 2009, many people have nicknamed it the “king of crypto”. This statement tends to remain true: when Bitcoin falls, altcoins tend to fall faster.

Many people see Bitcoin as the main indicator showing the state of the cryptocurrency market. However, could Bitcoin ever lose its status as the “king of crypto”? We will look at many different factors that will support how Bitcoin might remain the “king of crypto”, and other factors showing that Bitcoin could one day be replaced by another cryptocurrency.

The “Flippening”

Over the past year, the 2nd largest cryptocurrency by market cap has consistently been Ethereum. Ethereum is seen by many as having a very robust community, as people can develop applications on top of Ethereum, unlike Bitcoin which simply acts as a storage of value.

Many people see Bitcoin as just a storage of value, whereas Ethereum is considered to have real-world utility by powering decentralized applications for various projects. Many Ethereum enthusiasts have been talking about Ethereum “flippening”, aka. the day that Ethereum will have a larger market cap than Bitcoin, effectively becoming the largest cryptocurrency by market cap. There are many websites dedicated to this “flippening” phenomenon. So far, a flippening has not yet happened but many people believe that this day will come.

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Loss of Bitcoin Dominance

Looking at the Bitcoin dominance chart, we can see that Bitcoin used to represent 80% of the total crypto market cap. Now, Bitcoin represents roughly 40% of the total crypto market cap:

Bitcoin Dominance Chart

Over time, BTC has had decreased dominance over the entire crypto market. Via [Coin Market Cap] Note: Past performance does not guarantee future results. This graphical representation is for illustrative purposes only.

Seeing that Bitcoin is losing its dominance, people may think that Bitcoin is losing its status as the “king of crypto”. However, Bitcoin is still nonetheless the largest crypto by market cap, representing over 40% of the entire crypto market cap.

With time, more and more cryptocurrency projects will be created. As we can technically create infinite crypto projects, yet there will only be one Bitcoin, it can be seen as understandable that Bitcoin may lose its dominance over time in a sea of altcoins. Even so, although Bitcoin may lose its dominance, it may still remain the largest crypto by market cap, maintaining its “king of crypto” status.

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First Mover Advantage

The original whitepaper for cryptocurrency was released by Satoshi Nakamoto in 2009. Bitcoin is the original cryptocurrency. Although others argue that Zcash was the first cryptocurrency ever created, many people consider Bitcoin as the first decentralized peer-to-peer cryptocurrency that has ever existed. Since its inception, Bitcoin’s value went from less than a penny to around $40,000 per coin today.

Bitcoin’s code is public, so anyone can copy Bitcoin’s code and deploy their own blockchain. This is actually the case with some other crypto projects: they forked the BTC code, changed the name, and people actually went and bought their coin! This website demonstrates the incredible amount of BItcoin forks that exist right now, and it probably does not count every Bitcoin fork that exists.

People can copy Bitcoin, but nothing can replace Bitcoin. Bitcoin is considered by many to be the original cryptocurrency ledger, and therefore the most stable storage of value in the cryptocurrency world.

Wide Adoption

Bitcoin is one of the most popular cryptocurrencies in the world. El Salvador has made Bitcoin legal tender, and just recently the Central African Republic has decided to adopt Bitcoin as legal currency. Most cryptocurrency exchanges offer Bitcoin.

There are over 100 million Bitcoin wallets currently in use. When people think of cryptocurrency, a large majority of them think of Bitcoin. Bitcoin may not be considered as useful as other cryptocurrencies that exist out there, but the brand of Bitcoin may have reached a larger audience than any other cryptocurrency out there. This large amount of adoption can help Bitcoin keep its status as “the king of crypto”.

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Energy Costly

It is no secret that Bitcoin consumes a massive amount of energy. It is believed that Bitcoin mining consumes as much electricity as that of a small country. If the electricity is clean, then this is not too much of a problem, but the reality is that many Bitcoin mining farms are using unclean energy to power their mining farms. This fact can make people stop using Bitcoin and find more energy-friendly blockchain alternatives, just in order to save the planet.

Conclusion

Bitcoin has always been the largest cryptocurrency by market cap. It is considered by many to be the first cryptocurrency ever created. Bitcoin has gathered a large amount of adoption, with two countries officially accepting it as legal tender.

At the same time, many experts say that Bitcoin does not have much utility beyond being a storage of value, and could eventually experience a flippening from other coins which have more utility. Furthermore, Bitcoin is not the most energy-friendly cryptocurrency out there, which means that it could be replaced by a more energy-friendly cryptocurrency in the future.

No matter what, nobody can deny Bitcoin’s existence and the fact that it truly is the first decentralized peer-to-peer cryptocurrency that has ever existed. No matter what happens to the crypto markets, Bitcoin will most likely keep its nostalgic status as “the king of crypto”.

Nobody knows what the future will bring, and Bitcoin may not even be in the top 10 cryptocurrencies by market cap in the future, but even so Bitcoin may very well still keep its status by many to be considered the “king of crypto” because of its brand, what it represents, and what it has already accomplished so far.

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