Bitcoin is the world’s first successful decentralized cryptocurrency and payment system launched in 2009 by a mysterious creator, Satoshi Nakamoto.
This cryptocurrency led to the entire industry's growth and set a precedent for dozens of future decentralized currencies.
In addition to setting trends, Bitcoin established the de facto benchmark for cryptocurrencies by launching a wave of them over a decentralized peer-to-peer network. (1)
The influence of bitcoin on the global economy
Bitcoin significantly impacts the world economy because it was created to change the current financial system and eliminate financial intermediaries. In some circumstances, it might serve as a safe-haven asset.
It is an alternative approach to the world financial system in several ways. This cryptocurrency has garnered immediate interest from the banking industry, investors, governments, and businesses.
Economic agents' engagement with society and markets has revolutionized due to cryptocurrency advancements. Due to its significant market capitalization and technological infrastructure, bitcoin has been deemed one of the most significant global cryptocurrencies in today's economic environment.
In addition to being a virtual currency, Bitcoin is a technological advancement that uses blockchain computing, which functions similarly to the Internet in conventional computer networks. The ability to maintain simultaneous copies of the complete system on millions of computers anywhere makes blockchain computing special. (2)
Bitcoin’s recent decline
According to the New York Times, the price of Bitcoin just decreased by $24,000, or 17 percent, which was the lowest decline since December 2020.
According to CNBC, more than $200 billion was only recently taken from the cryptocurrency market due to turbulence in the market. According to Coin Market Cap, the market value of cryptocurrencies fell below $1 trillion for the first time since February 2021 due to this "great withdrawal," marking another depressing turning point in the industry's history.
Why is this happening?
According to experts, this is due to the general global climate. Things do not just look bad in the cryptocurrency sector but in all sectors around the globe.
Living expenses are growing, interest rates are rising, a recession is approaching, and inflation is skyrocketing. Additionally, stock markets are shaky, with the US S&P 500 now in a bear market.
The decline follows the steep rise in inflation that has troubled investors worldwide in the cryptocurrency market. According to CNBC, many people have sold their stocks out of prudence due to the U.S. Federal Reserve's expectation that they will need to raise interest rates to deal with the rising costs.
In this environment, a decline in Nasdaq exchanges is predicted, but people are noticing that this decline also affects the cryptocurrency market.
Because Bitcoin's value is linked to its appeal, the more people sell it, the less it is worth. Because they see the value declining, more people decide to sell, and the cycle continues.
Unlike other more conventional assets, Bitcoin lacks an intrinsic worth that supports it. There are no physical assets, revenue streams, or underlying businesses. (3)
Which currencies are outperforming Bitcoin?
For all its glory and popularity, Bitcoin was by no means the top-performing cryptocurrency over the last year. It was outperformed by Cardano (3 674%), Binance Coin (1 892%), Polkadot (1 174%), Ethereum (1 133%), and Chainlink (1 111%).
Let's take a closer look into some of the cryptos that are outperforming the Crypto giant Bitcoin.
Ethereum is a decentralized blockchain platform that creates a peer-to-peer network for safely executing and validating smart contract application code. Participants can do business with one another using smart contracts without the need for a reliable central authority.
Participants have complete ownership and visibility over transaction data since transaction records are immutable, verifiable, and securely distributed across the network. Ethereum accounts that users have created both send and receive transactions. As a cost of processing transactions on the network, a sender must sign and use Ether, Ethereum's native coin.
Using the native Solidity scripting language and Ethereum Virtual Machine, Ethereum provides a remarkably flexible platform for developing decentralized apps. The robust ecosystem of developer tools and well-established best practices that have emerged with the protocol's maturation benefit decentralized application developers that implement smart contracts on Ethereum.
With wallets like MetaMask, Argent, Rainbow, and others offering straightforward user interfaces through which to interact with the Ethereum blockchain and the smart contracts deployed there, this maturity also extends to the quality of the user experience for the average user of Ethereum applications. (4)
The Binance exchange and trades issue the digital currency known as Binance Coin under the symbol BNB. The total supply of this coin, which uses the Ethereum network and standard ERC 20 tokens, is 200 million BNB tokens.
The Binance currency is anticipated to improve the environment and efficiency of the Binance exchange. It supports various services like trading fees, exchange fees, listing costs, and other Binance exchange fees. Numerous partnerships have backed the Binance coins, assisting in expanding their use.
The value of BNB skyrocketed as Binance, and its blockchain network gained more notoriety. By the end of the year, investors who purchased at the beginning of 2021 had earned more than 1,200% returns. (5)
The token that drives the Cardano network is called ADA, and Cardano is a blockchain. This resembles ether and the Ethereum blockchain in certain aspects.
A unique cryptocurrency called ADA will be used to handle transactions on the Cardano blockchain platform.
While the Cardano platform can handle any type of transaction, its ultimate goal is to establish an ecosystem that enables smooth interoperability across various blockchains or the "Internet of Blockchains."
The fact that Bitcoin and other well-known cryptocurrencies' blockchain networks, which rely on proof-of-work consensus processes, waste a significant amount of energy is one of the main accusations against them. Cardano offers a more resilient and scalable blockchain using a proof of stake consensus process. (6)