Bitcoin is growing in popularity thanks to its latest bull cycle, which
promoted its status as an investment of choice for both retail and
institutional investors. The huge popularity of Bitcoin was also
reflected in the growing number of cryptocurrencies (over 20,000) on the
crypto market as well as the blockchain-based solutions, and we're even
seeing better regulations regarding crypto in general.
New
Zealand is also no exception to the worldwide crypto craze, especially
for Bitcoin mining. In this article, we will take a look at the main
factors which boosted Bitcoin's popularity in the world as well as in
New Zealand.
Cross-Border Transactions
One of the
major reasons why Bitcoin is popular for cross-border transactions in
New Zealand and the rest of the world is the low transaction fees that
are associated with cryptocurrency. Namely, Bitcoin was developed with
the main goal of being used as a payment method for the transfer of
funds over the Internet.
It was created during the financial
crisis in 2009, which is why it is powered by decentralized blockchain
technology. The blockchain network is essentially a distributed ledger
where the blocks of transactions are processed and added to the network.
Each incoming transaction and its data are viewable to every
participant in the network.
Because the blockchain network is
peer-to-peer based and distributed on a cluster of computers, the
processing time is much shorter compared to a decentralized financial
system. At the same time, the transaction fees are also significantly
lower, which is another major reason why Bitcoins transactions are quite
popular among users that want to send and receive funds online safely
and quickly.
Business Support
Whether your business
is located in New Zealand or it's an online shop, Bitcoin allows you to
easily receive payments from a worldwide audience. It is another factor
that promoted the popularity of Bitcoin in New Zealand. You only need a
Bitcoin wallet in order to receive the BTC, and that is easy to do,
particularly for online businesses.
For example, you can find
many
Bitcoin casino sites that accept BTC payments and provide a variety
of casino games to their online members. As we know, online casinos
have always worked to include the latest innovations in their platforms,
and accepting BTC further proves that many businesses are open to
Bitcoin's integration in their establishments. Some of the famous
businesses that accept BTC are Bookabach, Abalone Thai, Electrolux NZ,
and many other brands.
Bitcoin Halving
Bitcoin
halving is a significant event that was programmed to occur in the
network roughly every four years, or more specifically, when the number
of blocks reaches 630,000. Satoshi Nakamoto (the creator of Bitcoin)
capped the entire supply of Bitcoin to 21 million and designed the event
as a way to control the inflation rate by halving the reward for the
miners.
As the supply of BTC is restricted, and already 18.5
million BTC are in circulation, the price of Bitcoin rises even further,
with each passing halving. In other words, due to the decentralized
blockchain network, the market demand and supply are the main forces
behind Bitcoin's value. When the market supply is on a lower level
compared to the demand, which has steadily increased over the years, the
price rises accordingly.
The first time that the halving
happened, very few BTC supporters were aware of the halving's impact in
November 2012. The price of Bitcoin spiked to $11, while the reward that
the miners were cut in half to 25 BTC. With the subsequent halving, the
price surged to $664.44, and the latest halving was the one that set
the crypto world on fire. It occurred in May 2020; the reward was
diminished to 6.25 BTC while the price increased from $8,500 to $9,500.
Although
it's expected after the halving for Bitcoin to enter a bull cycle, no
one could have predicted the latest
bull market phase, which has swept
up not only the Bitcoin market but also the crypto market as well.
Over
the course of the following months, Bitcoin's price has increased by
170% and resulted in a price higher than $20,000 by the end of 2020.
Moreover, due to the incredible business support, the price of Bitcoin
continued to surge and reached a record-breaking high price of around
$65,000 in April 2021. So, one of the primary results of the incredible
interest of institutional and
retail investors was the money-making
potential of Bitcoin.
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