Why Investing in the First Cryptocurrency Is a Good Idea

Posted by Serup MacLeod on June 9th, 2021

Launched in late 2021 by its elusive creator Satoshi Nakamoto, the original intention of the Bitcoin protocol was to develop an open-source payment protocol based on the peer-to-peer technology of the Internet. The ultimate goal was to build a system that would allow the free flow of money throughout the world without the need for a centralised bank. PG slot called for a "distributed ledger" such as the MetaDisk that was to be used instead of a traditional database. The problem with this approach was that it was very difficult to implement into a use that had any resemblance to the workings of the traditional Internet.

As a result, various teams around the world have worked on different solutions to the problem of storing the ledger and ensuring that it's secure. One of these solutions came from Sunnyvale, California based startup called Bitwarden. The principals of this business are Jon Matonis and Andrew Weaver. These two men have been working on their product, which is called BitTorrent. Their mission was to develop software that allows users of the bitcoin network to transfer funds to any of the 50 states in the US in a matter of seconds. The other option to transfer funds to states across the US was to use wire transfers.

Another problem that most people had when it comes to putting the value of bitcoins into the right perspective is that there isn't any recognised market cap. Simply put, when you're dealing with a decentralized network of computers, then without the intervention of a central administrator, it's not possible to ascertain what the market cap of the bitcoin network is. By default, this means that anyone can create software on the fly and call their software 'bitcoins' regardless of how much actual market cap they have. This has resulted in a very volatile market cap, which has reduced the appeal to investing in this kind of digital currency.

Thankfully though, the developers of BitTorrent have taken measures to ensure that the value of their coins will not be affected by the market cap of the bitcoin network. Their solution? They have designed a new algorithm that determines the intrinsic value of a particular bitcoin. This intrinsic value is based on the number of transactions made throughout the past five years and changes continuously, so as long as the number of transactions performed by users of BitTorrent is increasing then it is worth buying.

So why is this important for investors who are thinking about trading the first cryptocurrency? It all comes down to supply and demand. When you have two currencies, one which is more popular than the other, like the case with BitTorrent, then the less well-known currency becomes more valuable. The same applies to the first cryptocurrency which is a great example of an economic system which is growing in popularity. If there are plenty of new coins being launched then naturally the new coins are going to be more valuable and more difficult to sell on the market.

One of the most impressive things about the bitcoin marketplace is how it is able to work with a very low market cap. This makes it one of the easiest things to invest in and you can see the rewards of your labour just by sitting at home. However it also creates risks that you may not have to worry about if you stick with traditional methods of investing like the stock market. There is no way that you can short sell a cryptocoin and make some money off of it, which is what created the popular stigma surrounding the bitcoin ecosystem. Even though there are risks involved with this form of investing it is still one of the safest ways to get into the world of cryptosystems and potentially create a substantial passive income stream for yourself.