Bitcoin is the first mover in the cryptocurrency industry. The concept introduced by Satoshi Nakamoto in a whitepaper in 2008 led to the creation of the first-ever cryptocurrency the very next year. Since then, Bitcoin has continuously gained adoption, driving its value to the highest in the recent days. Many alternatives to Bitcoin have entered the market since 2009, but Bitcoin always led the pack, thanks to the active community and high demands. All these years, the cryptocurrency has commanded a significant share of market capitalization, compared to that of all the altcoins put together.
However, a lot of things have changed in the past year or so. Bitcoin is not the “all dominant” cryptocurrency anymore, except for its value maybe. The emergence of various blockchain platforms and their respective altcoins/cryptotokens have effectively reduced the market share of Bitcoin. As more people decide to diversify their crypto-investment, the market capitalization has fallen below 50 percent.
The increasing interest in altcoins is not completely due to the technology prowess their respective blockchain platforms possess. It has something to do with the current state of the Bitcoin Network as well. The Bitcoin community, especially the developers haven’t been able to amicably solve a long-standing problem yet. Yes, the block size issue, which has become a subject of debate for over a year now. With fewer improvements in the Bitcoin network, people are increasingly finding it difficult to use it as a mode of value exchange.
Thanks to increasing transaction backlogs, the miner fee associated with transactions continue to grow, forcing few platforms to charge additional network fee from its users. A Bitcoin transaction in the recent days can take anywhere between a couple of hours to two whole days, making it as good or worse a fiat services like the Western Union. These challenges have got the cryptocurrency community members exploring new modes of crypto-transactions like Ethereum, Dash, and others.
There is no single reason for the shift in trend, and not all the reasons are bad either. The network issues are one part of the equation, while the rest indicate an increased proliferation of cryptocurrency based solutions, creating a competitive atmosphere in the blockchain space.
Ref: Forbes | Image: NewsBTC