Bitcoin Dominance is a metric that determines how much share of the overall crypto market share is owned by Bitcoin. Another definition: Bitcoin dominance (BTCD) is defined as the ratio of Bitcoin’s market capitalization to that of the rest of the cryptocurrency markets.
Bitcoin (BTC) is a digital currency that was first introduced back in 2009. It is based on principles (in a whitepaper) given by Satoshi Nakamoto, an unknown and untraceable individual (or probably a group of people), who is (are) regarded as the creator(s) of Bitcoin. Bitcoin provides lower transaction costs than most online payment methods, and as opposed to government-regulated fiat currencies, it relies on the concept of decentralization.
By market capitalization, bitcoin is the most valuable cryptocurrency in the world, accounting for a substantial percentage of the trading activity in cryptocurrency exchanges. While bitcoin was by far the most popular cryptocurrency for many years (still is), its dominance was considerably closer to 100% five years ago than it is now. With the addition of new currencies, such as Ethereum, Bitcoin’s overall dominance has started to crumble.
In 2013, Bitcoin had only a few competitors. It had a 94% market share at the time. Back then, ERC-20 tokens and stablecoins did not even exist, Ethereum was only a dream of Vitalik Buterin’s vision.
All of that changed in 2017, with the altcoin boom. By February 2017, BTC’s market domination reduced to 85.4%, ETH had a 5.7% share of the cryptocurrency market, while Ripple’s XRP enjoyed 1.1% of the share.
From there on, it was only a matter of time as bitcoin’s market share plummeted as a flurry of initial coin offers (ICOs) raised the industry’s market value significantly. As of now, the BTCD is 45.23% at the time of writing, and it continues to go down, as new coins and tokens make their debut in the cryptocurrency markets.
However, no other coin has ever come close to the popularity of bitcoin. This is why when the price of bitcoin plummets, so do the other altcoins in the market and vice versa.
This effect of bitcoin has increased its acceptance as a payment method in most parts of the world. The transactions are processed with a hardware terminal or wallet address using QR codes. An online business can easily add bitcoin to its existing payment methods, such as credit cards, PayPal, and so on.
Regardless of the fact that each bitcoin transaction is recorded in a public network, the identities (names) of the buyers and sellers are never revealed; only their wallet addresses are accessible to the public. While this keeps Bitcoin users’ transactions anonymous, it also allows them to purchase and sell anything without being identified.
As a result, it has become the preferred method of payment for those purchasing narcotics or other illegal goods on the internet. This practice has brought criticism of Bitcoin from regulatory authorities, however, the popularity of bitcoin only continues to rise.
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