How Did Bitcoin Become a Top 10 Currency in 2020?
Cincinnati Ohio, December 15th 2020, ZEXPRWIRE, Viewed for a long time as an asset that will face a bubble greater than Dotcom, Bitcoin has against all odds proved its value to the world. This year, we are yet again seeing the same prices that were once massively celebrated only three years ago.
But the environment is far better than what it used to be. Following a decade of market turbulence, Bitcoin is now a top 10 currency that competes with the U.S. dollar, Euro, and the Yen. Ranked as the sixth-largest currency by market cap, it is only a matter of time before this cryptocurrency, which was once valued at pennies, overthrows the traditional financial system.
The question remains, how did Bitcoin achieve such a high growth rate, and is it in any way desired by nations and banks? Contrary to popular opinion, cryptocurrencies may be valued more than institutions and expert economists rather than just retail investors.
In this article, we will take a deep dive and explore these questions in hopes of finding out how close the disruptive asset became with some of the largest economies and institutions in the world.
How Bitcoin earned its spot as a top 10 Currency
Bitcoin arrived on the internet following one of the greatest economic crises in modern history. With a whitepaper published in 2008 by the anonymous creator Satoshi Nakamoto, the asset itself arrived only a year later. Known at the time solely by cryptologists and the cypherpunk movement, Bitcoin was completely anonymous and remained in a small part of the internet for a long time.
Following more than 10 years of being traded on the open market, the leading cryptocurrency has moved far and even beyond the scope of its original environment. Today Bitcoin is ranked as the sixth-largest cryptocurrency in the world, on par with the USD, EUR, CNY, JPY, and INR.
Apart from an enormous market capitalization of $354 billion, larger than even some fiat currencies, Bitcoin is valued at an incredibly high price as well. At $19,000 the digital asset is priced higher not only compared to currencies but assets as well.
Naturally, fiat currencies have a much better spot in the overall state of things. They are accepted by every country and bank in the world and are used massively by the general population. The same cannot be said for Bitcoin, at least for the time being.
But then again, if you imagine cryptocurrencies being used on the same level as fiat money, it becomes much more obvious that digital assets have a far more important place in the world.
However, fiat and digital currencies cannot be compared with each other. While fiat is prone to inflation and is continuously printed, cryptocurrencies such as Bitcoin are designed to offer the exact opposite experience. Hard capped at 21 million coins, the leading digital asset has an incredible potential for not only fighting inflation but for rising higher in value as well.
Most investors compare Bitcoin with gold due to its high price and limited supply, although even in this case one asset has a much higher value. Nevertheless, gold is pretty much the standard for a long duration of human history.
A majority of fiat currencies are backed by gold, therefore we see banks buying more and more gold each year to protect their economies. Is a similar pattern happening with Bitcoin? And if so which banks or nations are interested in Bitcoin?
Which countries hold Bitcoin and how much?
Bitcoin has surpassed its original design as a currency and is now being accumulated as a high-grade investment asset that enables its holders to hedge against the market. In the cryptocurrency sector, these large investors are given the moniker ‘whales.’
But who are these so-called whales? A majority of users believe that they represent a small community of individuals who joined the market early on when no one has even heard about Bitcoin. Either through mining or simply buying, they have accumulated enough coins to be referred to as whales. Having the ability to move markets while selling or buying thousands of coins at a time, large holders are hailed as sleeping giants.
But are anonymous individuals really the ones to own massive amounts of digital money? Are they the ones who accumulate Bitcoin or do we have larger entities at play here?
Based on the distribution of the global hash rate (the power that Bitcoin miners have) we can see three countries leading the race. China utterly dominates over the mining sector by controlling 71.7% of the global hash rate. Other important players such as Russia and the United States only own 6.08% and 5.29% respectively.
As such, we can see that China deeply values Bitcoin and other cryptocurrencies. Their interest has been proved time and time again, especially in the last couple of years. In October 2019, President Xi Jinping announced a national blockchain program created to bolster the adoption of decentralized technology. China is even paving the road towards launching a digital yen, which may soon launch in 2021.
The United States may have the most Bitcoin investors after China, but its population of miners is insignificant in comparison. It is also noticeable that miners are more concentrated in regions where electricity costs are incredibly low.
Due to that reason, mining farms in Kazakhstan, Malaysia, and Russia may be operated by foreigners. But then again we do have certain countries in this list whose governments have interacted with Bitcoin.
For example, Iran is famous for being crypto-friendly. After discovering in 2019 that a large number of its citizens are mining Bitcoin, the government began to regulate the industry. However, the implemented laws were not as strict as most people expected. In fact, Iran is more progressive in this context than other certain liberal countries.
Are banks interested in cryptocurrencies?
Apart from political institutions, we have also seen financial institutions, primarily banks, being interested in cryptocurrencies. Since the bear market of 2018, we have seen numerous mentions of central bank digital currencies (CBDCs). These assets are created to digitize fiat currencies and make them capable of being transferred over the blockchain.
In the previous section of this article, we have mentioned China as a significant economic superpower that develops a digital currency. But while the country dominates the scene of CBDCs development-wise, we see equal interest coming from central banks all over the world.
So far, the EU and its European Central Bank appear to be the keenest on developing a digital euro in the near future. In a new ‘Report on a digital euro,’ the central bank revealed that it plans to finish reviewing the capabilities of digital currencies by mid-2021.
If the CBDC successfully passes tests in experimental use cases and regulatory sandboxes, the ECB may begin developing a digital euro.
On the other hand, the United States and its Federal Reserve do not seem to be interested. Recently, chairman Jerome Powell stated that the U.S. central bank is not developing a digital dollar at the current time. However, it may do so if there is a need.
In the context of Central and institutional banks owning cryptocurrencies like Bitcoin, there is not that much information, at least publicly. However, a set of U.S. regulations from July is set to change that.
A document published by the Office of the Comptroller of the Currency (OCC) revealed a new policy that enables banks to store cryptocurrencies. With that in mind, we can soon expect banks to start holding cryptocurrencies – if they are not already doing so.
Interested in buying Bitcoin? Mine instead!
When discussing which countries own the most Bitcoin we have briefly mentioned mining. Besides investing through an exchange, it is also possible to acquire cryptocurrencies by simply mining them. As previously mentioned, most of the whales that accumulate Bitcoin are miners from regions such as China, Russia, and the United States – not investors.
So, what is mining? It may sound complex when you first encounter the concept but it is rather simple. In the blockchain industry mining is a mechanism through which individuals verify transactions on networks. Miners are the only reason why we can even make transactions and payments with Bitcoin since they support the network.
From the perspective of wishing to acquire Bitcoin, mining is a great passive investment through which it is possible to accumulate cryptocurrencies without having a huge capital. Due to this reason, people often prefer mining Bitcoin rather than investing in it.
When creating Bitcoin, Satoshi Nakamoto designed the digital asset in such a way that miners would earn 50% lower rewards every four years. The most recent halving happened in 2020 when rewards halved from 12.5 BTC to 6.25 BTC.
Why is this important? Because it shows that mining is extremely competitive and that users take part in this process on time. After all, Bitcoin has a limited supply and in a few years, there will not be that many coins left to be mined.
For some, the complexity of mining is the number one reason why one would not become a miner. But thankfully, certain companies offer colocated mining services which enable you to passively mine Bitcoin without actually operating over a mining farm. In the next section, we will feature such a company that stands out by offering a truly unique business model.
Mining Bitcoin passively with Crowmining
The main problem behind mining Bitcoin is that the activity is not accessible to everyone. Whether we are talking about technical knowledge, the space required for mining farms, or high electricity costs, mining is a form of passive investment that is exclusive for a specific group of people and environments.
But why give up on mining altogether when there are companies who can alleviate your problems?
Crowmining is a Bitcoin mining service provider operated by the Elevate Group, a company based in the U.S. For those who want to become a professional miner without possessing the technical knowledge and space required for mining farms, Crowmining offers colocated mining.
Their business model boils down to you purchasing mining hardware and using it to mine Bitcoin without actually managing it. Operating in the middle of Siberia, Crowmining hosts a gigantic mining facility filled with thousands of ASIC mining rigs. So, what is the deal here?
Upon ordering an ASIC machine, which is signed to be under your ownership, the product is shipped to Crowmining’s main facility in Siberia. There, the company will set up the machine and mine Bitcoin instead of you. In the meantime, all you have to do is relax in your comfortable home and watch as the number of coins in your wallet piles up.
But why pick Crowmining? First off, their service is easily accessible through an intuitive online dashboard through which you control your funds and can check the miners – which are monitored 24/7 by a team of professional and experienced engineers.
Compared to other platforms, Crowmining does not offer cloud mining. All the hardware purchased by yourself is under your personal ownership. These products have a lifetime of three to four years and are upon ordering delivered to Crowmining’s facility. The company handles everything from the very start, including shipping, customs, delivery, and setup.
Low power costs
Since the mining facility is based in Siberia, the cost of mining is severely reduced. With electricity costs averaging at around 5.5 cents KwH, you are paying almost 3 times less than if you were to mine in the U.S. Due to this reason, the profits that you earn each month are drastically increased.
Real passive investment
Miners who mine on their own lose a lot of time operating their mining farms. One must spend the time to monitor the equipment, make it more efficient, and maintain it on a daily basis. In the case of Crowmining, the company turns mining into a truly passive investment as it handles everything required to successfully mine Bitcoin.
Besides paying for the ASIC miners, Crowmining only charges a fixed management rate of 20% for each month. Note that hosting and maintenance are already included in the management fee. There is no need to pay for additional costs such as electricity.
Which ASIC miners can you buy and where?
At the time of writing Crowmining offers two ASIC machines produced by the reputable mining hardware producer Bitmain. Specifically, you are able to mine Bitcoin either with the Bitmain S19 Pro 110 T/H ($2,999) or the Bitmain S19 95 T/H ($2,399).
Issued By –
Business / Company / Brand Name: Crow Mining
Contact Person Name: Jason Appleton
Contact Person Title: Partner
Contact Person Department: Marketing
Contact Person E-Mail: [email protected]
Contact Person Telephone: 12708754439
Amber Wilson is working in England as a medical doctor. She has deep knowledge about medication, health, how to live well and genetics. She writes articles about that medication field as a part-time service which is required to needy people. In recent months, most of her writing has been in collaboration
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Digest Express journalist was involved in the writing and production of this article.