In less than five years, the terms cryptocurrency, blockchain, metaverse, and Web3 have become well-known and effective investment vehicles for generating sizeable financial returns. However, along with their ascent comes a haze of ambiguity regarding their precise nature, the technologies under development, and the ways in which these phrases are applied in the actual world to generate value.
The king of cryptocurrencies is in particular Bitcoin. But as other cryptocurrencies emerge on the market, Bitcoin has strayed and assumed a leadership role of its own, setting itself apart from the competition and evolving into a super asset class in and of itself.
What Gold is to commodities serves as the best comparison. Yes, gold is a commodity, but it is also discussed independently from the other hard metals and natural resources found on the planet. Since entering the mainstream in 2017, Bitcoin has evolved into something similar over the last five years. It is a cryptocurrency, but it is referred to, discussed, and traded in a different way than other cryptocurrencies.
What Is The Difference Between Crypto And Bitcoin?
The definitions of cryptocurrencies vary widely. For instance, a cryptocurrency is a decentralized digital currency intended to be used as a medium of exchange. Cryptocurrencies are digital or virtual currencies secured by cryptography in which transactions are verified and maintained by a decentralized ledger system (blockchain) rather than a centralized authority (bank).
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In general, cryptocurrencies are now generally considered to be any form of digital currency that is not governed by a bank or the established financial system. Therefore, the term “cryptocurrency” refers to any Web3 project and blockchain-native cryptocurrency coin or token.
So Is Bitcoin Cryptocurrency?
Yes. Because it adheres to the same concept of a cryptocurrency—a decentralized digital money that runs on the blockchain and can be used peer-to-peer—Bitcoin is also included under the umbrella term cryptocurrency. Bitcoin is a cryptocurrency in this sense, hence it has no distinctions from the term in general.
Are Crypto And Bitcoin The Same?
Beyond the generic, broad definition, Bitcoin and cryptocurrency are different. This is due to the fact that the term “crypto” is very general and that Bitcoin is actually a very specialized cryptocurrency coin with its own function, network, economics, and purpose.
For instance, stablecoins, governance tokens, Web3 infrastructure tokens, and particular market currencies are now included in the category of cryptocurrencies, but Bitcoin is neither of these things nor is it compatible with many Defi, NFT, or Web3 applications. Because of this, it is very different from other cryptocurrencies like UniSwap, USDC, USDT, ETH, and MANA.
You can now start to distinguish between Bitcoin and cryptocurrencies. Therefore, Bitcoin obviously stands apart from the great majority of cryptos in terms of purpose, design, and interoperability.
Particularly, Bitcoin is now the only cryptocurrency that is truly recognized as peer-to-peer currency and as digital gold. For Defi, Ethereum-based applications, stablecoins, and the metaverse, other cryptocurrencies perform specialized tasks. But none of these digital currencies can perform as well as Bitcoin, and investors aren’t particularly interested in them.