Bitcoin is a digital currency alongside decentralization and anonymous characteristics. As a result, the market cap of bitcoin, in contrast to other cryptocurrencies, is higher. In a nutshell, bitcoin is the leading cryptocurrency in the entire cryptocurrency market in terms of market cap or store value.
According to ample trustable exchange, altcoins can dominate bitcoin in terms of return of investment. Still, no cryptocurrency or altcoin can dominate this pinnacle in the cryptocurrency industry. The store value of bitcoin nears $50000, regardless of a crash, which means the demand for bitcoin is enormous.
Since bitcoin is free from third parties and intermediations, all the more government authorities, bitcoin has a compassionate store value. There is software that can help you in getting profitable results in your bitcoin expedition. However, factors like supply and demand, cryptocurrency regulation, security breaches, and hard forks affect the store value of bitcoin to an exceeding extent.
There are no government authorities and organizations to support bitcoin, which sounds like a drawback of bitcoin. However, the decentralization of bitcoin is an advantage. Here is an utter portion demonstrating the fact that bitcoin decentralization is an advantage for bitcoin users. So why are you waiting? Let’s jump straight to facts.
How does Bitcoin Complete decentralization?
Decentralization is the utmost scorching feature of bitcoin; Government authorities of different regions and countries control almost every activity of an individual. Therefore, forming a decentralized complex in such a decentralized world was very complicated.
However, Satoshi Nakamoto gracefully helped bitcoin in achieving decentralization with comprehensive technologies. For example, Satoshi Nakamoto added a peer-to-peer network, blockchain, and proof of work complex. In a nutshell, technical aspects like proof of work, peer-to-peer network, and blockchain help Bitcoin achieve decentralization.
Blockchain is a public distributed ledger, and this public ledger broadcasts information regarding bitcoin transactions. The peer network is a complex computing entity that is responsible for regulating transactions.
All the more, every node has a blockchain copy. Proof of work is a mechanism that necessitates solving a math puzzle to prove the involvement of the computing power invalidation process. Proof of work rewards bitcoin miners with a precise amount of block reward.
Advantages of decentralization
Most of the perks of the bitcoin complex are mere because of the decentralization aspects of bitcoin. Here are some of the prominent advantages of the decentralization feature of bitcoin.
Fewer transaction fees
You are familiar with the traditional banking system that levies considerable transaction fees while receiving transactions. The prominent reason behind this is that several third parties are in between a single transaction in the traditional banking system.
However, bitcoin is entirely free from mediators and third parties, the transaction fees of processing transactions in the bitcoin complex are significantly less. All the more transaction fees go to bitcoin miners in the form of the block reward. The fact might amaze you that a trustable exchange charges less than 1% of the entire transaction as a transaction fee.
Since bitcoin is free from the involvement of government authorities and financial authorities, the ease of processing international transactions using bitcoin is much higher. The traditional banking system charges a considerable amount as transaction fees in international transactions.
However, in bitcoin, the transaction fees for both international transactions and domestic transactions are the same. All the more, you can increase the pace of transactions by increasing the transaction fees. Moreover, there are no limitations while processing international transactions in the bitcoin complex.
Are there any limitations of decentralization?
Since bitcoin is a decentralized currency, multiple factors can affect the store value of bitcoin. Due to decentralization, bitcoin’s store value is very volatile. Undeniably store value of bitcoin is a blessing for bitcoin traders. But it declines the significance of bitcoin as a payment method.
El Salvador recently adopted bitcoin as a legal tender. All the more, government authorities of this country have promised to offer the best-in-class liquidity. If El Salvador resolves the bitcoin’s volatility, the bitcoin as a payment method will become more superior and robust.
These are some of the advantages of bitcoin decentralization.