It may be said that the future of Bitcoin is determined by individuals who believe in blockchain technology and the potential of digital money, rather than by speculators. The DeFi market frenzy, which can be considered as the future of the cryptocurrency market (Crypto) in particular and the financial market in general, is one manifestation of this notion. The DeFi mania was responsible for the birth of a new trend: Tokenized Bitcoin.

The popularity of Bitcoin in the cryptocurrency market

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4 main reasons for the popularity of Bitcoin

Bitcoin’s popularity stems from the fact that it is a decentralized digital currency. In fact, Bitcoin is popular for a variety of reasons. Bitcoin is popular among some users because it is not regulated by governments or banks, which is called uncontrollable. Maybe they like it because it allows them to use Bitcoin anonymously. Even though every transaction is recorded, no one can tell which “account number” belongs to you unless you tell them, which is called anonymity. Some people are attracted to Bitcoin because of its security. Because every transaction is publicly recorded, creating fake transactions is difficult. Many Bitcoin proponents refer to the virtual currency as a “store of value,” a designation usually reserved for traditional safe-haven investments such as gold. They also frequently argue that Bitcoin is an effective tool for anti-inflation.

Some billionaires’ views on Bitcoin

  • Elon Musk: In a January 2021 online chat with social media users, Musk stated that he was a big fan of Bitcoin. He believes that “Bitcoin is a good thing” and that he “was late to the party” by not purchasing Bitcoin eight years ago. Bitcoin’s price soared to $34,500 per coin after Musk’s statement. After Musk added the word “Bitcoin” to the description of personal information on his Twitter account on January 29, this virtual currency rose by up to 16 percent, or more than $38,000.
  • Billionaire Cuban: Bitcoin is similar to gold in that it is a store of value, but because its supply is limited, the price fluctuates rapidly when demand fluctuates. 
  • Michael Saylor: He shows his support for Bitcoin by changing his Twitter profile picture to “laser eyes” (the symbol of Bitcoin supporters) and posting statuses like “Bitcoin is the currency unbreakable behind a wall of encrypted energy,” or famous Bitcoin quotes with the hashtag # Bitcoin.

What is the purpose of Bitcoin?

Bitcoin mining is a term that refers to the processing and confirmation of payments on the Bitcoin network system, which aids in the authentication and storage of transaction data on the blockchain system.

Users can obtain bitcoins in addition to mining them by exchanging them for bitcoins when selling other currencies, goods, or services.

Why is Bitcoin tokenized on Ethereum?

Bitcoin is the most popular, first-born, and most widely used cryptocurrency in e-commerce. As I mentioned above, Bitcoin is mainly used for transactions and mining.

However, current blockchain technology is developing very strongly in many different fields. If only Bitcoin is limited to that much, then Bitcoin does not promote its full potential.

DeFi is regarded as a watershed moment in the evolution, development, and application of practical content in everyday life. The DeFi ecosystem has completely captured the heart with its permissionless (no need for permission, trustless with the support of smart contracts, transparency) transactions.

In the tumultuous digital landscape of privacy, security, and ownership, decentralized applications (DApps) are becoming increasingly powerful and appealing to users.

Despite the fact that DeFi is quite popular and can be developed on any blockchain, it is primarily built on Ethereum. According to data from February 4, 2021, the total number of assets under management in Ethereum-based decentralized finance projects has surpassed $30 billion.

The promising future of Bitcoin

BTC can now be converted to tBTC, which can then be used to access the DeFi market on Ethereum. With BTC accounting for roughly 60% of the crypto market capitalization, investors can add a significant amount of value to the Ethereum network and its nascent DEX market by spending more money on DeFi trading platforms, thereby strengthening the market.

Furthermore, the success of tokenized Bitcoin may encourage other asset classes to join the Ethereum network. On Ethereum, DeFi is gaining in popularity.

However, there are risks associated with Bitcoin encryption, particularly software risks. Transaction fees on the Bitcoin network may decrease in the long run as fees flow into Ethereum, compromising the network’s security.

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