If you are planning to invest in cryptocurrencies then first question that will come up in your mind will be about which cryptocurrency to invest in. Well, Bitcoin (BTC) should be your first preference, let us look at the reasons in the following sections.
How bitcoin different from other cryptocurrencies?
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There are two very basic reasons why BTC should be your first preference when you decide to take the plunge and buy a cryptocurrency. The first is the network effect and the second is its proven and well-documented security. We will explore both these factors in greater detail in the next few sections.
To start with, Bitcoin with its proven and well-known usage case is considered to be much more valuable in comparison to other altcoins. On the other hand, other coins attempt to differentiate themselves on the basis of a lot smaller use cases.
As for instance, other altcoins showcase user cases like ability of users to purchase things anonymously, presence of prediction markets and addition of decentralized name servers.
A Longer Existence
“Bitcoin is a technological tour de force.” – Bill Gates, Microsoft co-founder
Moreover, Bitcoin has a strong leading edge over other coins due to the fact that it has been in existence for over eight years without any failure. If we look at the other aspect, BTC has been a lot more secure than other altcoins. Few of the other factors worth mentioning are:
- BTC is a lot more accessible, having plenty of exchanges, more software, more merchants and hardware to support it.
- It is a lot more liquid along with larger volumes as compared to other altcoins.
- Bitcoin also boasts of biggest developer ecosystem consisting of more implementations and software in comparison to other altcoins.
Let us look at an example which highlights the important position Bitcoin has gained overtime.
Let us suppose, someone creates an altcoin which can be used for email spam filtering. Let us name it BlockCoin. The main purpose of this coin is to allow users message another person only when a payment is made to the other person in the form of BlockCoin. Let us also assume that this altcoin becomes very popular and a lot many people make use of it on regular basis. Now what?
In this situation, it is likely that some entrepreneur would take the lead and work on development of a similar service for Bitcoin. When this service becomes functional, it would have greater user base to begin with and in addition to it, there will be lesser entry barrier. As such, this servicer will be able to utilize a network effect that will not be available to BlockCoin.