Why is Bitcoin so Famous?

5 min readMay 21, 2022

Why is Bitcoin so famous? Well, there are two main objectives as to why Bitcoin is so famous. The number one reason for its popularity is the peer-to-peer network. While the second reason is its censorship resistance.

The Internet is filled with overwhelming information about cryptocurrencies. However, we talk about cryptocurrency, and the first thing that pops up in our heads is “Bitcoin.” This article will cover everything you need to know about Bitcoins in the laziest possible way.

Bonus: While learning about Bitcoin, you also know Why is Bitcoin so Famous?

What is Bitcoin?
What is The Purpose of Bitcoin?
How Does Bitcoin Work?
Bitcoin’s History
Bitcoin’s Price

What is Bitcoin?

Bitcoin has no one-fit definition. It is often called a digital/virtual currency or cryptocurrency. Bitcoin can not be called a currency as it does not fit into the definition of traditional currencies. Instead, we can understand Bitcoin as a digital currency.

Bitcoin or cryptocurrencies, when looked at from the perspective of money/fiat, you find the followings:

1. Yes, it has established itself as a mode of exchange but is yet to be generalized globally.

2. It has subsequently added considerable value when it comes to the value of cryptocurrencies. However, the market’s volatility makes it difficult to hold onto its value. It can go up to zenith and become meaningless in no time.

3. Finally, the unit of accounts. Due to high volatility, it won’t settle for units of accounts yet again.

Bitcoin is nothing but a digital or electronic asset you can own without the need for any third-party intervention. Therefore, we can take Bitcoin as a highly valuable precious metal or stone. However, there is a twist: the price of Bitcoin does not remain constant; unlike the stones, it is highly volatile.

Anyone can buy Bitcoin and send them to others. The transactions are recorded in Bitcoin’s Blockchain. And everyone can see all the details, maintaining transparency and eliminating one single powerful entity.

What is The Purpose of Bitcoin?

The purpose of Bitcoin is to develop a peer-to-peer network where anyone and everyone can transact with other parties without any intervention from financial institutions. Bitcoin is proposed to solve the problem of double-spending.

The Bitcoin blockchain creates a system of record that is an electrical ledger that can not be changed. To further develop the network, the proof-of-work mechanism is used. Furthermore, the longest chain rule is followed to save the network from hackers.

How Does Bitcoin Work?

Bitcoin operates via softwares on computers that communicate with each other. Hereby forming a network of nodes, that is, computers. Softwares allow for all the functionalities happening in the network like validating transactions, mining, storing transactions, storing the blockchain, new blocks, and many others.

The most used software is the “Bitcoin Core.” The source code for this software is available on GitHub.

Let us try to understand how Bitcoin works with the classical fiat currency. Let us go step by step:

Let’s assume you want to store your cash/fiats. Say you keep it in a bank account. The bank will provide you with an account, username, and a pin or password to authenticate. The bank has the full right to freeze or block your bank account. Considering it has the complete ownership of your money as long as it is stored in the bank.

With Bitcoin, you need not take anyone’s permission. You have complete control over your Bitcoin. Use, receive, and send as and when you like without intermediaries.

2. In the traditional banking system, you have to provide your personal details. With Bitcoin, you need not give out your personal details. Instead, there are public and private keys(a set of numerics and letters)

3. The bank maintains the record of your transaction, and hence there is a point of control yet again. With Bitcoin, there is no single record keeper. Anyone from anywhere can keep a record of all the transactions or read the records. It is difficult to manipulate or censor the data with this many bookkeepers. The network thus built is resilient.

Anyone can join or leave the network without the need for permission from anyone.

Bitcoin’s History

Okay, so let me break the biggest myth around Bitcoin. Most people have known about Bitcoin’s existence since 2018. However, that is not the truth. There were multiple instances of trying to develop digital cash or data that holds value. Bitcoin indeed drew its inspiration from there.

Here’s the list of a few past sources that lead to Bitcoin:

Digicash
b-money
Hashcash
E-gold
Liberty reserve
Napster
Mojo Nation
BitTorrent
Bitcoin( maybe, just a guess)

All of the sources mentioned above were and are decentralized. The trend of decentralization is prevailing in today’s time. What turn this technology takes in the next thirty years or even in a decade is worth thinking about.

There is so much that has happened over the decade in the history of Bitcoin. Hence the history of Bitcoin is a topic in itself to look at and analyze.

In 2013 Bitcoin was classified as a currency in Texas. At the same time, Germany gave it the title of private money in Germany. In addition, Richard Branson, owner of Virgin Galactic, announced Bitcoins as payments for flights to space, Tesla CEO Elon Musk announced that they would accept Bitcoin as a mode of payment, and so much more.

Bitcoin’s Price

The journey of Bitcoin’s price is colorful. Calling Bitcoins’ price fluctuation a cyclonic ride would be perfect. The crashes that have happened in Bitcoin can make you go nuts. The 2013/14 crash was mind-boggling. The price dropped to $200 from almost $1200.

There were multiple times when Bitcoin faced an 80% crash. However, it survived.

And here we are living in the times where Bitcoin has won the beliefs of innumerable people.

Check out the current price of Bitcoin here.