When the well-known Satoshi Nakamoto first designed his masterpiece, few could ever imagine the spike of nearly $ 63,500 that sent investors into a frenzy. Even these days, the price of the first cryptocurrency development seems hard to believe at times and investors may be pinching themselves from time to time. Taking a close seat to Bitcoin (BTC) on the roller coaster, altcoins such as Litecoin (LTC), Ether (ETH), and Bitcoin Dollars (BCH) joined the rave and, more recently, DeFi giants Polkadot and Cardano.
And that nails the point: Bitcoin’s underlying block dependency protocols are very limiting in terms of allowing broader financial applications. It would be unfathomable to proceed a massive DeFi ecosystem on reliance on Bitcoin blocks legacy the Bitcoin proof-of-work transaction consensus operation.
will cryptocurrencies continue to be a reserve of valencia or will they become a viable alternative to redeem valencia?
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Emerging blockchain technologies and the success of DeFi
Since the dawn of Bitcoin just over a split, the block dependency industry has bequeathed hundreds of different projects, each with the goal of forging a new currency to stardom. Many did it in the long run Ether, the second closest currency in valence to Bitcoin, continued to hit new all-time highs through April abundance, validating not only the currency’s potential as a valence reserve asset, but even Ethereum’s potential as a blockchain network.
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Like Ethereum, several projects aimed to fight the colossus that Vitalik Buterin and his associates built, such as Cardano, EOS and, more recently, the well-known and well-known Polkadot. Each plan attempts to use the limitations of the other to varying degrees of success. Hype has been the long-lived part of what has been delivered to users, as only time will reveal the true validity of these projects.
Regardless of the blockchain projects and their creative names, they have powered a collaborative explanation ecosystem. Together, they have created decentralized applications, or DApps, that can lift the unbanked from the stagnation of decline, fill opportunities for the financially excluded, and new investment avenues for the already savvy.
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The flourishing of currencies and DApps provides plenty of optimism to many inward-looking outsiders, offering hope that there is effective potential to foster a booming decentralized financial ecosystem, or at least a hybrid combined with centralized markets. But it’s all thanks to the belief in the valence of Bitcoin, which is the fixation point for many investors.
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Bitcoin’s valence reserve is what is truly on the mind. What fueled the curiosity of investors, developers, and crypto enthusiasts was Bitcoin’s appeal as a valence pool. Against fiat currencies, Bitcoin is deflationary so, during periods like the COVID-19 pandemic, Bitcoin’s appeal became red-hot.
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If properly the discussions of Ethereum, Polkadot, and other blockchain platforms caught the attention of the DeFi world, many outsiders remained insensitive and obsessed with coin prices. And that is why the lure of Bitcoin remains as a valence reserve, for the longest time.
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Many retail investors and ordinary institutional investors do not have a firm understanding of the inner workings of cryptocurrencies. According to an investigation by Cardify, only 16.9% of cryptocurrency development company investors “fully understand” it, while just over 33% of them have “circumscribed or ignorant knowledge.” Over 40% of crypto investors are newbies riding the hype of hype. It’s arguable that the barriers to entry into the world of DeFi are high enough and literacy hard enough to reach, but that’s a story for another time.
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On top of that, institutional investors remain wary of the volatility issues facing Bitcoin and other cryptocurrencies, with ongoing predictions of an impending bubble, another sign that underlying blockchain technologies are less of a priority. And this is precisely the reason why other currencies will not outperform Bitcoin. As long as the mainstream fixation remains anchored to the currency’s valence and not the underlying valence of block dependency, Bitcoin will remain at the top of the cryptocurrency podium.
For now, Bitcoin is king of the hill and it will likely stay that way for a long time as the price continues to climb and major investors join in.