Litecoin Review and Price Prediction 2022

Litecoin (LTC) is a quite popular and widely accepted cryptocurrency and one of the oldest altcoins. Since its release in 2011, Litecoin has successfully become the world’s top 20 cryptocurrencies with considerable gains. If you are a new investor willing to make Litecoin (LTC) your investment option in 2022, you might find this article useful.

What is Litecoin (LTC)?

Litecoin (LTC) is a cryptocurrency which was launched on October 7th, 2011. It offers a faster, safer, and cheaper payments than Bitcoin. If we compare it to Bitcoin, Litecoin (LTC) block time is only 2.5 minutes and with reduced transaction fees.

Litecoin was created by former Google employee and Director of Engineering at Coinbase, Charlie Lee. Litecoin is one of the most prominent altcoins, and it was the first to change Bitcoin's original concept and the most significant difference is that it takes 2.5 minutes for Litecoin to generate a block, or transaction, compared to Bitcoin's 10 minutes.

Litecoin released its MimbleWimble (MW) protocol testnet In 2020 October. This newly created privacy protocol was created by the developers to test confidential transactions and compress the data for verification purposes through the so called "Cut Through" function.

The fundamentals of Litecoin

According to Investopedia, Litecoin cryptocurrency is an evolution to Bitcoin. It was born after its own popularity in the crypto community as an alternative or ‘altcoin’ that has emerged to allow investors to diversify their digital currency portfolio.

As discusses above, Litecoin can not only transact funds way faster than Bitcoin, but there are also a number of other very important characteristics. Litecoin has the ability to handle higher volumes of transactions in it's mempool, because of the capability of transacting quicker and if Bitcoin attempted to transact on the scale of this altcoin, a code update would be required. However, Litecoin’s blocks would be larger, but with more ‘orphaned blocks'. Litecoin reduces the risk of double spending attacks with it's faster block time theoretically, if in this case both networks have the same hashing power.

Litecoin Technical Details

Litecoin has a transaction confirmation time of 2.5 minutes on average (in comparison to Bitcoin's 10 minutes). The Litecoin network has a cap of 84 million crypto units. 

Many other popular altcoins were inspired by Litecoin, because of its Scrypt hashing algorithm in order to prevent ASIC miners from mining those coins. A very good example is Dogecoin which was originally a Litecoin fork. However it's important to be aware that by the end of 2022, Scrypt ASIC miners are likely enter mass production and the market.

Price movements of Litecoin in the last couple of years

First when introduced in 2011, only 2 years after Bitcoin's release, this altcoin rapidly gained followers and buyers in the crypto community thus reaching a price of half a dollars.

Litecoin's price jumped to more than 4 USD in mid-November 2013. Litecoin price skyrocketed to more than 100X until it reached a top of 50 USD within less than 2 weeks.  However, the price quickly fell until it was worth less then 10 dollars.

Needles to say, in December 2018, Litecoin again managed to surpass it's previous all time high record when the price jumped to more than 100 american dollars. A few weeks later, the coin price bounced by 240% and hit its all-time high record at around 340$. Unfortunately, it only strengthened for a short time as the price fell again.

In the November of 2020, this altcoin was traded at around 55$. Litecoin once again became bullish and skyrocketed to hit $240 in early 2021. 

Litecoin price prediction 2022

Let's see some charts first. Technically speaking, we are in a triangle phase right now, and anything can push the price to either direction, even a small news, or the general behavior of the crypto market.

From all things considered it looks like early April is going to be key play here, we may have a breakout or dip, but I am going with a dip, wishing for a steady breakout.

Mid April looks quite interesting, May is going to be a following trend it seems. At the moment it looks like end of June is where the magic should finally happen. Bear traders hit the last technical target, and I don't believe they will have enough confidence to hold leveraged short position considering it's now Russia's time to get into Cryptocurrencies.

According to the technical analysis of Litecoin forecast, in 2022 the LTC price is expected to cross an average price level of $148, we can expect a minimum price value of Litecoin by the end of 2022 to be around $140. Additionally LTC can reach it's maximum price level of $180.

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BlackRock CEO Hints That Cryptocurrencies Are the Future

Could the world’s largest asset manager overseeing $10 trillion in client funds finally be warming up to crypto? 

The CEO of the world’s largest asset management firm, BlackRock, is bullish on cryptocurrency and believes that the ongoing Russia-Ukraine crisis has boosted the case for blockchain-based currencies as a tool of settlement for cross-border transactions.

In the latest letter to shareholders, CEO Larry Fink noted that the ongoing war would give nations no choice but to reevaluate their currency dependencies which could potentially open up opportunities for a global digital payment network.

Fink said:

“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.”

Fink’s observation is spot on seeing that the sanctions on Russia have already led to many countries that import oil and gas from them to look for alternate payment channels beyond the centralized SWIFT framework.

It is also rumored that Ripple partner, The Clearing House, is in talks with Wells Fargo to develop a SWIFT alternative.

The local trading volume in Russia also spiked in March following a constant decline over the past year. On the other hand, Ukraine legalized cryptocurrencies on the 16th of March this year after receiving millions of dollars in cryptocurrency aid from people across the globe.

Ukraine has also raised more than $100 million in cryptocurrency donations, which the nation has used to reinforce their army and supply.

Although cryptocurrency has proven to be a great hedge against troubling times over the years, the recent, ongoing Ukraine-Russia crisis has shown that cryptocurrencies can become a prominent tool for international settlements and a way to send out quick relief.

The war in Ukraine is the latest accelerant that can hasten the trend towards crypto.

Concerns have arisen Russia, the eleventh largest in the world, might attempt a pivot to crypto after its access to the SWIFT global payment system was withdrawn as penalty for its invasion.

The EU Commission said on March 11th it would make sure that the country and its elites can't use crypto assets to circumvent economic reprisals put in place. 

PancakeSwap Price Prediction 2022 March

Below, you will see the key metrics that we have taken into consideration upon coming up with our CAKE price analysis and prediction.

Over the past few weeks, the cryptocurrency market seems to be making a rapid recovery. After the dip in the past 2 months, the crypto market has either remained stable or growing steadily. Right now, it seems that the digital asset industry might finally be on the up and up again. The price of CAKE has reduced by 33.8% in the last one year.

The question remains: will CAKE experience the same price volatility? We’ll find out soon in this CAKE price prediction article. But first, let’s have a look at what CAKE is.

What is PancakeSwap (CAKE)? 

As appetizing as it sounds, PancakeSwap or CAKE doesn’t have anything to do with food. It’s an automated market maker and a decentralized finance (DeFi) crypto application. The platform is a Binance Smart Chain-based Decentralized Exchange (DEX) which is very popular nowadays. It’s regularly compared to Ethereum’s Uniswap and SushiSwap because of its many similarities, but it also has lots of additional features that allow users to earn rewards.

What is an automated market maker (AMM)? If you haven’t encountered this term yet, here’s what it means. An AMM is different from traditional centralized exchanges. It's possible to trade digital assets on this platform. However, there is no order book where you are matched with fellow traders. In an AMM, you are trading against a liquidity pool which is simply a bunch of funds thrown together in a large digital pile. It’s an essential element of Decentralized Finance (DeFi) protocols. 

The liquidity pool is combined using other users’ funds. These users deposit them in the liquidity pool and they receive Liquidity Provider (LP) tokens in return. These tokens can be used to claim their share and a part of the trading fees. 

CAKE is the native token of the PancakeSwap platform. It’s the BEP-20 Pancake token (CAKE). This token is one of many tokens that are used within the PancakeSwap protocol and is made available for token swaps within the exchange. 

PancakeSwap (CAKE) Current Market Status

As of the time of writing this Aave Token price analysis, CAKE trades at $6.71 with a 24-hour trading volume of $213,6043,164. The price of CAKE has increased by 2.36% in the last 24 hours. Currently, the top cryptocurrency exchanges for CAKE are Binance, Kucoin, Bithumb, Mexc, Gate.io and others. Now, let’s go to the next part of this CAKE technical analysis for 2022.

That said, is CAKE a good cryptocurrency to invest in 2022? Let’s find out in this CAKE Token price prediction 2022 article.

PancakeSwap (CAKE) Price Analysis 2022 March

Currently, CAKE holds 57th place on CoinMarketCap. But will the latest upgrades, development, and changes in the CAKE blockchain help the cryptocurrency price to reach higher? Let’s proceed to the charts in this PancakeSwap price prediction article

The Relative Strength Index (RSI) measures the relative momentum in the magnitude of recent price changes so as to deduce oversold or overbought assets. The RSI value of 1-day chart is 54.13.  This shows that CAKE is showing a strong trend since it is between 50 and 70. This value might trigger a bullish run soon since it seems that more buyers are repositioning as the value is moving towards the 70 RSI value which is the overbought region.

Keltner channel is a technical analysis indicator that is used to determine trend directions by measuring the volatility above or below the candlesticks. From the Keltner Channel signals for CAKE/USDT, we can deduce that the price of CAKE might experience a bullish run since it is consolidating at the middle of the channel. However, in the long-term, the price might get bullish since top cryptocurrencies like Bitcoin and Ethereum are already getting bearish from the recent bullish run.

VERDICT:

The point is, if the investors turn against the crypto, the bears might take over and push CAKE from its uptrend position. In simpler terms, the price of CAKE might decrease to almost $5.09, a bearish signal.

Meanwhile, the long-term CAKE price prediction 2022 is bullish. It has a high possibility of reaching new heights. However, that will only happen if it breaks many previous psychological resistances.

Bitcoin's Network Activity Is Increasing. What will the future bring?

Key Takeaways

Bitcoin has risen by nearly 13% over the past week. 

A spike in network growth and open interest point to further gains.

Breaching the $42,100 resistance level would validate the optimistic outlook. 

Several on-chain metrics suggest that Bitcoin is gaining strength for a significant bullish impulse. Still, the top crypto has a big hurdle to overcome first. 

Bitcoin On-Chain Metrics Pick Up

Bitcoin looks like it’s gaining strength again. 

The leading cryptocurrency has enjoyed an impressive uptrend over the past week. It’s gained nearly 5,000 points in market value, rising from a low of $37,600 on Mar. 14 to a high of $42,400 on Mar. 19. 

Although prices have retraced by roughly 5% in the last 48 hours, Bitcoin’s uptrend appears to be gaining strength. 

The number of new addresses joining the Bitcoin network has significantly increased since Feb. 21, making a series of higher highs and higher lows. The uptrend in this on-chain metric suggests growing interest from sidelined investors who appear to be re-entering the market. 

More than 480,000 Bitcoin addresses were created in Mar. 17 alone, which is a strong positive signal for further upward price action.  

Network growth is often considered one of the most accurate price predictors for cryptocurrencies. A steady uptrend in the number of new addresses created on a given blockchain often leads to rising prices over time.

A similar uptrend can be seen in the futures markets, where the number of open positions, including both long and short positions, has been steadily rising since Mar. 7. As open interest increases, it indicates more liquidity, volatility, and attention is coming into the derivatives markets. A continuous increase in open interest to surpass 12.36 million could support Bitcoin’s recent price increase. 

Still, transaction history shows that Bitcoin has one substantial resistance wall to break to be able to advance further. 

IntoTheBlock’s In/Out of the Money Around Price model reveals that 1.57 million addresses have previously purchased nearly 760,000 BTC between $40,900 and $42,100. A decisive daily candlestick close above this hurdle could give Bitcoin the strength to break the next critical barrier, which is sitting at $46,500. 

The IOMAP also shows that the top-ranked cryptocurrency is holding above stable support as over 1 million addresses have previously purchased 1.23 million BTC at an average price of $40,300. As long as Bitcoin remains trading above this foothold, it has a chance at advancing further. However, failing to do so could result in a downswing to $37,500. 

GameStop Teases NFT Marketplace Later This Year

Key Takeaways

GameStop revealed its plan to launch its NFT marketplace by the end of Q2 this year.

The company noted that it had hired dozens of employees working on Web3 gaming.

The company has had plans for its own NFT marketplace for nearly a year now.

GameStop has published its Q4 and fiscal year 2021 results. In the report, the game company notified the public of its intention to launch its NFT marketplace by the end of Q2.

GME NFTs

GameStop has announced its intention to launch its long-teased NFT marketplace sometime in the second quarter of this year. 

In its fourth-quarter overview, the company highlighted the fact that it “hired dozens of additional individuals with experience in areas such as blockchain gaming, ecommerce and technology, product refurbishment and operations.” 

Moreover, the firm emphasized its partnership with the Ethereum-based NFT scaling solution Immutable X, which would involve Immutable X facilitating the development of the NFT marketplace GameStop had in the works. As part of this deal, GameStop would receive as much as $150 million worth of IMX tokens. As of the following day, GameStop had sold nearly 15 million of the IMX tokens it had received as part of the partnership.

GameStop ended last year with $1.271 billion in cash and cash equivalents. 

As far back as May of last year, GameStop had been taking steps towards its own non-fungible token marketplace. As was highlighted in its report, the company made many hires related to its marketplace for NFTs, including eight more job listings just last October. As of Dec. 28, GameStop was attempting to find NFT content creators. 

At press time, shares of GME had rallied on the day, up over 7%. 

GameStop's journey to NFTs

The video game retailer's stock made headlines in 2020 as one of the primary assets fueling the meme stock frenzy in financial markets. 

Other equities including Blackberry, AMC Theaters, Nokia and Bed Bath & Beyond surged as rookie investors poured money into these stocks. Some of these firms also used this momentum to push into the wild west of crypto. 

GameStop's upcoming NFT launch is one example, but the AMC Theater chain also began accepting crypto payments, including meme coin Dogecoin, for ticket sales. They even offered shareholders free NFTs.

However, it remains to be seen if other members of the meme stock caste will also pivot to crypto.

CPU mining in 2022 – List of CPU mineable coins & CPU only algorithms

 Lot of people when they talk about crypto mining they discuss things like: ASIC mining profitability, Bitcoin mining machines, FPGA mining, building a profitable Ethereum GPU mining rig, mining BTC with Nicehash, GPU mining altcoins etc. All of that relates to GPUs and ASICs. But what about CPU mining? Is CPU mining still relevant in 2021 or is it a thing of a past?

CPU mining profitability in 2021, what its like? Are there coins that you can really CPU mine Today and is it really worth it to build a CPU mining rig? Here, this post is all about CPU mining.

CPU mining

Did you know that in early days Bitcoin was only CPU mined? One could mine Bitcoin using their Intel Pentium CPU and generate over 100s of BTC back in 2010. But that’s not possible anymore. Not just with Bitcoin but for almost every altcoins.

Most of the popular coins that were initially mined using CPUs are no longer CPU mineable. There are two main reasons for this. 1. Rise in network difficulty and 2. Rise of complex ASIC (Application Specific Integrated Circuit) miners. Both these factors rendered CPU mining largely on a vast majority of coins

Anyways even Today there are certain cryptocurrencies that are still focused on CPU mining. One such popular coin is Monero (XMR, RandomX algorithm), the biggest and easiest coin to CPU mine. Monero mining is profitable on AMD Ryzen CPUs and certain Intel processors. But does it pay off and will you be able to make the ROI?

Sure, but this is not going to work for all CPUs. Particularly cheap lower end CPUs are not profitable anymore when it comes to mining. But at least Ryzen CPU would pay off but then at current network difficulty it will still take more than a year for you to earn the ROI.

Also Monero is not the only coin that you can mine with CPU. There are many other profitable CPU mineable coins and CPU only algorithms. If you are searching for CPU algorithm or CPU only coins that you can mine with your CPU then the following post is for you.

In this article, we have listed down some of the cryptocurrencies that are possible to mine through CPU even today. If you don’t have an ASIC hardware or fast GPU then not a problem. You can still use your CPU power to mine these altcoins. They provide GPU / ASIC resistant and are only designed to allow CPU mining.

Now before we list the CPU only mined cryptocurrencies let’s look at what is CPU mining.

What is CPU mining?

As you know, mining is the act of allowing computer power to solve complex mathematical puzzles aka algorithms. By doing so miners verify / validate a block of transactions on the blockchain and for doing this process they mint new coins from a block as a reward. To know more learn about block rewards.

Usually to mine altcoins miners use ASIC machines and allocate their computers GPU power. But there are specific altcoins that are possible to mine with CPU.

CPU mining is a process that utilizes CPU (Central Processing Unit) cores to verify transactions on the blockchain and to create / mine new coins. CPU mining involves using everyday computers or setting up CPU mining rigs to make use of their power mainly as a mining devices.

One CPU, One Vote:

During earlier days cryptocurrency mining was originally carried out only using CPUs. However some years later GPUs replaced CPU mining. Because of the limited processing power and speed compared to GPUs; CPU mining process slowly became inefficient.

The idea behind CPU mining is “one processor, one vote” which is a consensus mechanism proposed by Satoshi Nakamoto in the Bitcoin whitepaper. But that principle got broken for Bitcoin. As of now only certain altcoins allow for CPU mining.

CPU Altcoins

When it comes to CPU mineable coin the first crypto that comes to everyone’s mind in Monero. Monero is the only popular coin with the most CPU hashrate. It is currently the best CPU coin on the market and it is the most successful CPU coin around. In order to allow CPU mining Monero uses RandomX hashing algorithm which completely resists ASICs and holds very well against GPUs.

Other than Monero there are few more coins using the same Random X algorithm which also allows for CPU mining. Plus there are a lot of coins coming out with unique hashing algorithm which only supports CPU mining. During the initial stages the difficulty on such coins will be very low and you can even make a profit mining with your Laptop. But remember that mining such coins are extremely speculative as only very few coins will take off in price.

So in general CPU mining is not left out and is not outdated just yet. There are a lot of developers still support for CPU mining. Even in 2021 there are still active CPU mineable cryptocurrencies. You can use your home computers to participate in CPU mining. However just because you can mine using using CPU doesn’t mean its a good idea to mine them.

Problem with CPU mineable coins

First of all let’s understand why Monero is successful. Monero is the only CPU coin that gets actively developed and it constantly works upon improving their PoW (Proof of Work) algorithm to stay ahead in the game.

In the past they’ve tweaked their PoW algorithm many times. The recent switch from CryptoNight to RandomX has completely stripped off ASICs from their network and additionally brought in more competition to GPU miners. This change allowed CPU miners to largely participate in the blockchain consensus. Since it provides active development and brings in more innovation it is the only CPU based coin that has been successful so far. However this is not the case with other CPU based coins and smaller blockchain networks.

Market price of a coin remains one of the main factor when it comes to mining. So what determines the price? Its the interest from people. Only if there is some kind of active development there will be some adoption. If there is no development the coin will simply fail in the long run.

The problem with mineable coins is that most projects will be largely abandoned by its developers. When it comes out initially it might seem like a good choice to mine them. Especially in the past during 2017 cycle many small-scale miners use to jump into those early coins to rack up on profits. But this strategy is not going to work anymore.

Most coins today are not available on major exchanges. Even if you find an exchange you’ll not be able to sell them due to low trading volume or market activity. Also since most CPU coins have low hashrate it gets easy for someone to 51% attack and is more susceptible to botnet attacks.

Before you start mining with your CPU use mining calculators to estimate the profitability. Check the coins popularity. Make sure it is listed on major exchanges. At least it should be listed on some exchange for you to sell your mined coins. Only then you should pursue them in mining.

So what are the best cryptocurrencies that you can mine with CPU?

Cryptocurrencies For CPU Mining

In order to allow CPU mining developers should design a Proof of Work algorithm with CPU in mind. The algo should mainly allow CPU and keep ASIC miners at bay.

There use to be many such algorithms supporting CPU mining such as: CryptoNight, Dcrypt, Bcrypt, X11, Wild Keccak, Argon 2d etc. Among them CryptoNight is the most popular algo. For CPU mining one often looks at coin using CryptoNight. Even though CryptoNight is GPU mineable it largely favors CPU miners. Most of the CryptoNight coins are mineable by CPU and one could make a decent enough profit with the right CPU.

Popular CPU coins such as Monero (XMR), Bytecoin (BCN), AEON were all using CryptoNight algorithm until ASICs came in. Now all those CPU algos are no longer CPU mineable.

If you want coins that are solely mineable with CPU then you should look for the ones using CPU only algo. Since CryptoNight got affected by ASICs Monero switched to RandomX – A new hashing algorithm designed specifically for CPU mining. Anyways it also supports GPU mining.

The problem with Monero mining is that it is hard to mine with CPU these days, especially with low power CPU. If you are looking to mine for fun then sure you can but don’t expect to make the ROI on your CPU. At current hashrate and network difficulty the best way to profit from Monero is by using GPUs to mine which is much stronger than CPU. But then if you got a GPU, there are much better coins like Ethereum, Ravencoin etc. in which you can profit more than Monero mining.

A CPU that was pulling like $2 to $3 a day once now barely earns $.10 cents a day. In current scenario only if you allocate more hashrate you’ll be able to run a profitable mining operation. For this a home PC or Laptop computer is not sufficient. You need several powerful processors. Only people those who have already built a CPU mining rig or runs a server are capable of CPU mining.

So before you look for CPU coins to mine ensure whether if your CPU is profitable or not. There are many CPU mining profitability calculator like for example you can use Nicehash profitability calculator. On this site you can find out the income from mining on different processors and algorithms.

List of altcoins for CPU mining

Monero (XMR)

Verus Coin (VRSC)

Nimiq (NIM)

WebDollar (WEBD)

Gulden (NLG)

PascalCoin (PASC)

Banano (BAN)

Myriad (XMY)

Dynamic (DYN)

Credits (CRDS)

Scala (XLA)

Arionum (ARO)

CPU Chain (CPU)

Nerva (XNV)

VERDICT:

To summarize, CPU mining is a simple way to earn few cents a day. But only if you got the right hardware and can find the right coin. If you come across such coins and if your CPU is profitable at mining then put your CPU to work. Else it is better to keep them sitting idle. All that money, energy and time spend on some random shitcoin is not worth it anymore.

Jack Dorsey’s Block Bitcoin (BTC) Wallet Project To Use Fingerprint Technology for Security

Jack Dorsey’s upcoming Bitcoin (BTC) wallet product will be outfitted with fingerprint sensor devices for security, according to a new update.

Dorsey’s company Block, formerly known as Square, first announced plans to develop a wallet last summer.

In a new update, the team behind the BTC wallet announced that the project will include both hardware and a mobile app to enable customers to set their own preferences in terms of convenience and security.

In the new update, the project notes that the fingerprint sensor data will never leave the hardware device.

“For transactions that require using the wallet hardware, we want our customers to be able to unlock their wallets securely, but with ease – an unlikely combination that historically has not existed in the market. We believe PINs, passwords, and seed phrases are confusing and often not secure given the workarounds normal people have to create given all the friction. This compounds when the need for those passwords are more rare…

Every authentication technology comes with tradeoffs. We’re excited about the security against theft or misuse that [fingerprint sensor data] will provide, the peace of mind that will come from not needing to remember yet another PIN, and the ease of placing a finger on the sensor rather than manipulating tiny, failure-prone buttons on a difficult-to-read screen.

… of course, fingerprint sensor data will never leave the hardware device.”

The project also plans to “evaluate additional access methods that customers could opt into” in case they want to share access to their wallets.

Dorsey has mentioned in the past that Block plans to integrate the Bitcoin wallet with smartphones.

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Why is Bitcoin valuable?

So you’ve been reading the latest news and can’t help but wonder: how has Bitcoin become so powerful?

What we can see from outside the blockchain is a digital currency that amassed great attention, going so far as to spike institutional investors’ interest. 

But if we look a bit deeper, it appears that the Bitcoin boom wasn’t just a fluke.

On the contrary, Bitcoin has a lot going for it. 

Initially, it seems to have been a necessary development in the global economy, presenting a new, courageous model of decentralized financing. Bitcoin was primarily popular among the tech-savvy population, but it gradually gained strength as the entire world moved in a virtual direction. Somehow, the ongoing pandemic happened to be the turning point when everyone started talking about Bitcoin. 

The truth is, it only accelerated the rise of this virtual space and the rush for high adaptability. 

However, ever since its introduction, Bitcoin’s purpose has remained the same: an alternative to fiat money with a precisely outlined set of rules, free from central banks and corporate regulators. 

Hence, apart from all feverish popularity and influencers’ tweets, certain traits give Bitcoin a currency value, the very same we consider when discussing all other fiat currencies. 

And as most Bitcoin-related statistics show, the interest, usage, and ecosystem surrounding cryptocurrency have grown significantly.

Here, we’ll discuss on what basis Bitcoin keeps shaking the ground of the international economy. What does make Bitcoin valuable?

Bitcoin as a Currency 

Bitcoin was designed to perform the same role as money. In general terms, money features three main functionalities: they serve as a store of value, a medium of exchange, and a unit of account. 

No legislation across the globe recognizes Bitcoin as a legal tender, nor does it forbid cryptocurrencies to perform both functionalities.

Or that was the case until June 2021, when El Salvador adopted Bitcoin as a legal tender.

Store of Value

Frequently referred to as the digital gold, Bitcoin seems to be fitting better in its role as store-of-value so far. But why is that? 

Despite being present for over a decade, Bitcoin and other cryptocurrencies are usually referred to as the money of the future. 

If we observe the price history of Bitcoin, it’s clear that it’s been heading in a positive direction despite the sharp and frequent fluctuations. Most price estimations based on technical analyses project realistic expectations that one unit of Bitcoin will reach around 100,000 USD by 2025. So, it’s a simple turnaround: people invest in Bitcoin expecting new all-time highs values in the years to come.

Medium of Exchange

On the other hand, Bitcoin doesn’t seem to be fully prepared for its role as a regular medium of exchange. The reason is rather understandable: short-term price shifts discourage people from using crypto assets for buying goods and services even though an increasing number of retailers allow crypto payments. 

Based on Bitcoin’s chronological price graph with a valuation from $0.0008 to $63,774, the amount of Bitcoin you’d spend on monthly rent in 2019 could easily have paid off your mortgage at the beginning of 2021.

In this regard, it’s noteworthy that Bitcoin has turned out to be a “jackpot” asset for seasoned traders diving into the newly discovered crypto-exchange marketplaces with great enthusiasm.   

The immense market caps and trading volumes of well-established trading platforms such as Binance and Coinbase Pro clearly prove that the volatile market provides a suitable environment for those who want to earn from price speculations. Furthermore, Bitcoin has become commonly used as an underlying asset by several financial products such as futures, ETFs, and derivatives.

Scarcity

The fundamental factor determining the currency’s existence is its supply. A good example would be diamonds – the reason they are so expensive is that they seem to be scarce. Thus, the limited supply drives the diamonds’ price higher.

In any case, excessive supply of a currency will result in devaluation, leading to huge spikes in the price of goods and services, which can, in turn, lead to a financial crash. 

The opposite scenario is also unfavorable for economical maintenance. When it comes to Bitcoin, the creator(s) specified its supply in the protocol according to which Bitcoins total supply would be limited to 21 million Bitcoin units.

To get a clearer picture, currently, there are approximately 18 million BTC in circulation, coming out at a decreasing release rate called halving. 

More specifically, since this asset is primarily acquired through Bitcoin mining, each time a Bitcoin miner provides a solution to a complex puzzle, they are rewarded with a certain amount of Bitcoin known as a subsidy. Every four years, the subsidy is halved. At the moment of writing, it’s around 6.25 BTC.

Utility

Utility represents the currency’s effectiveness. I.e., the ability of a currency to allow its users to trade its units in exchange for various goods and services. 

In fact, this was the reason why currencies were initially created. This is where Bitcoin and all other altcoins like Ethereum (ETH), Litecoin (LTC), and Ripple (XRP) show their strength.

Cryptocurrencies are run on a blockchain network, which by its very nature is completely trustless, meaning that transactions don’t need to be based on trust in order to be executed seamlessly. The Bitcoin network does so through a robust system consisting of automated verifications and checks and shows extraordinary flexibility to maintain utility outside the crypto ecosystem.  

Divisibility

An affluent currency must feature a flexible system concerning divisibility in order to set a convenient basis for fulfilling its role as a medium of exchange. As a result of the strictly limited supply, Bitcoin fractions are substantially smaller than US dollars, British Pounds, and all valid cryptocurrencies worldwide. That being said, the smallest unit to which Bitcoin can be broken into equals 0.00000001 BTC. That subunit is called a Satoshi, named after its founder(s).  

Counterfeitability

The complex blockchain technology and the ledger on which transactions are recorded don’t allow Bitcoin to be easily “counterfeitable.” 

Technically, when somebody produces a fake Bitcoin, it can be done only through the double-spend method, meaning that the scammer managed to create a double record. If this happens, the user will spend the same unit of Bitcoin several times in different settings. However, such a situation is almost impossible to come true in reality, as the blockchain is designed to prevent it.

Durability

In order to achieve proper effectiveness, a currency has to maintain decent durability. Bitcoin doesn’t have a tangible representative in the actual world, so it automatically passes the durability test. This means that Bitcoin can’t be physically damaged, lost, or stolen. 

However, this shouldn’t lead you to the wrong conclusion that Bitcoin is by any means invulnerable to malicious actions. 

Bitcoin is stored in a digital wallet that keeps records of your Bitcoin transactions and encrypted private keys. Once you lose your private keys, you lose ownership of your funds. The Bitcoin, however, is not destroyed in this case; it’s just you that don’t have access to it.

Transportability

People are massively shifting toward digital payments, and e-shopping routines, so easy transportability is a key feature of a valuable currency in a world where virtual payments have already beat cold banknotes. Cashless payment is a typical example of the so-called “Network Effect,” which suggests that the value of a particular product increases as more people are utilizing it.

In the cryptocurrency sphere, the existence of different sorts of wallets and cryptocurrency exchanges have upgraded this feature, allowing funds to be transferred in real-time, irrespective of the type and the size of cryptocurrencies being exchanged. 

Exchanges also offer fiat gateways with multiple payment methods such as credit cards and PayPal. On top of all that, costs for such interparty crypto transactions are drastically lower than regular transnational orders. 

Final Thoughts

After all, it’s simple math: as Bitcoin is getting closer to the maximum limit, the demand for it is reaching new heights. 

The favorable ratio between its supply and demand is reliable proof that the value of Bitcoin is likely to grow even higher than we could possibly imagine. Furthermore, corporate investors are putting considerable trust in this new wave of financial practices, setting a solid ground for Bitcoin’s utility as a medium of exchange despite the initial lack of intrinsic value.

Nonetheless, nothing can be taken for granted in the volatile field of cryptocurrency. Just a single tweet from Elon Musk, announcing that Tesla wouldn’t accept Bitcoin payments any longer, managed to affect Bitcoin’s price negatively, and then another one to shift the attention to Dogecoin. However, nothing seems to affect the level to which Bitcoin has been incorporated into mainstream culture.

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