Will Bitcoin Become the First Monopoly in Global Decentralized Economy

Will Bitcoin Become the First Monopoly in Global
Decentralized Economy

The recent market movements in the industry have started the discussion on the
future of centralized trade in cryptocurrencies. The concept of cryptocurrencies
started with an aim of decentralizing money and giving back control to the masses.
But as the market developed, centralized players strengthened their authority and
the goal of decentralizing power faded away in the glory of billions of dollars of
unregulated money movement.
However, everyone in the industry woke up from their deep sleep when a
heavy-weight centralized exchange got into dust in a matter of few days. It took the
fall of FTX along with the loss of billions of customer funds to make us realize that
decentralization is the true way for democratizing finance.

Amidst this chaos, the role of DeFi and Bitcoin becomes more important than ever.
Bitcoin has always been the currency that has given a strong back to fall on during
the roughest of bear markets. Even after the fall of FTX, investors shifted their focus
to Bitcoin, leading it toward a potential monopoly in the DeFi ecosystem.

The Rise of Decentralization

Nobody has ever thought that the decentralization of money would ever be possible
anytime soon. But things changed when blockchain innovation and cryptocurrencies
came together to create a completely new economy. Decentralized finance is
becoming the bedrock of internet trade, however, the majority of the crypto
transactions still happen through centralized channels.

The present global DeFi market size was valued at $11.78 billion in 2021 and is
expected to increase at a compound growth annual rate of 42.5% from 2022 to
2030. On the other hand, the fall of a leading centralized exchange has made people
more aware of the fact that centralized cryptocurrency holdings are no better than
holding money in your banks.

The cost of an unregulated and centralized crypto space only empowers the
decision-makers of the platform to manipulate the money within their ecosystem.
With no transparency whatsoever, the trust of the investors is shifting away from
centralized exchanges to decentralized platforms.From all the decentralized trading
happening in the world, blockchain protocols are responsible for more than 45% of
total transactions. This indicates the significance of cryptocurrencies and Bitcoin in
the future of decentralized finance.

Bitcoin: The Pillar of Decentralized Trade

We live in a time when Bitcoin has become the synonym for decentralized trade in
layman's terms. One can understand the significance of Bitcoin by the fact that its
market capitalization has reached over $1.2 trillion during the last bull run. This is
higher than the total market cap of cryptocurrencies right now.

Bitcoin blockchain network records a sum of over 250K transactions each day even
after having an average throughput time of 40 minutes. Bitcoin has also been able to
establish itself in 78 countries with 38K+ ATMs installed and working. South
American country, El Salvador, has gone to the extent to become the first country to
make Bitcoin a legal tender in their economy.

Hundreds of billions of dollars also account for Total Volume Locked (TVL) in DeFi
protocols for different operations. From lending to staking, people are willing to
learn the technical aspects of blockchain and adapt it to their lives. People from the
Central African Republic are an example of the same and as a result, Bitcoin is a legal
tender in their country.

All this information when summed up directs toward the increasing relevance of
Bitcoin in a world where most financial institutions are under the influence of one or
the other. From the day of its origin, the Bitcoin community stood by the cause of
decentralization, and shared resources in the community became the breeding
ground for new free and open-source innovation.

Problems in the Mass Adoption of Bitcoin

Bitcoin adoption has already started in the world and institutional players such as
MicroStrategy, Galaxy Digital, Voyager, Tesla, and others are holding major of this
crypto gold. However, there are some spaces in its mechanism that are yet to be
filled. Here are some of the problems that are restricting the mass adoption of
Bitcoin.

Cost of Transaction
The cost associated with the Bitcoin transaction was not a part of its mechanism
since the beginning. However, this changed when the congestion on the network
increased with time. Bitcoin transactions could take a long time if not incentivized
by a transaction cost.

Even though these incentives can make important transactions happen just in time,
the time taken by regular transactions increases drastically. Not to mention the
power consumed during validating these transactions.

Volatility
The price volatility of Bitcoin is another bone of contention for those who do not
want to hold their assets in fragile investments. Bitcoin had a steep fall since the last
bull run and aggressive price fluctuations have become a characteristic of Bitcoin.
For Bitcoin to become a standard for international decentralized trade, it has to
overcome its volatility, however, it would be possible only with time.

To know how to manage market volatility - Read this blog.

Integration
Ethereum, the second-largest blockchain network in the world overtakes Bitcoin
when it comes to blockchain development. Bitcoin is not a development protocol
and that is why it does not integrate with DApps as easily as Ethereum does. This
creates a gap between the user's ability to interact with the chain and restricts the
movement using bridging protocols.

Will Bitcoin Become a Monopoly in Decentralized Trade?

Even amidst the worst time for cryptocurrencies, Bitcoin is anchoring the crypto
market and leading the space singlehandedly. Even though there are some problems
in its mechanism, all of them could be solved over time by the community. The best
of the brains in the industry are working tirelessly to make Bitcoin a better
blockchain for diverse operations.

Bitcoin is an undisputed leader in the industry and further developments are surely
going to make its stance stronger in the trade. The monopoly of Bitcoin is inevitable
in the industry as its dominance is only going to increase with time. However, the
blockchain industry is highly unpredictable and we are always excited to explore
new developments at CoinGabbar.Will Bitcoin be able to become a monopoly in
international trade? Or can it be replaced by any other blockchain? Share your views
in the comments below.

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