Why is Bitcoin limited in quantity (why is Bitcoin only 21.4 million)

Why is Bitcoin limited in quantity? Why is Bitcoin limited in quantity

In the past few years, due to the Scarcity of Bitcoin, the market value has been growing and more and more developers are excited about the development direction of Bitcoin. At the same time, however, with the development of the Cryptocurrency market and the rise of its adoption rate, investors have begun to pay attention to the potential impact between the price of bitcoin and its supply. So, how should we view which Bitcoin transactions currently exist in the market? In this article, we will explain why Bitcoin has a quantity limit When a block contains a transaction, it is considered a valid proof. If this number exceeds a certain amount, it indicates that network participants will need to spend more time verifying the valid information in the block. But this is not the final answer, as miners must wait for these data to confirm. To ensure safety, all mining pools will choose to create new blocks to maintain synchronization between them, so the mining pool can decide whether to add new blocks based on specific circumstances. In addition, difficulty adjustments or hard forking events occur every approximately 6 hours, which can make the excavated blocks incomplete, resulting in slower block extraction speed and higher costs, thereby affecting transactions on other blockchains and increasing rewards Although this consensus mechanism is not entirely applicable to Bitcoin, it does allow anyone to improve the security of Bitcoin by changing on chain rules – whether they want to upgrade their node software or update their clients, they can reduce transaction costs by modifying existing versions However, for miners who want to test new versions with old client versions, this is good news – as long as they run the new version, they can gain more computing power, rather than wasting resources and effort on mining new blocks. In other words, although some algorithms are incorrect, such as the emergence of EIP-1559, the mining machine cannot obtain new blocks from the outside in a timely manner; Meanwhile, some mining pools may even delete previous historical transaction records to prevent users from accessing new historical transactions. However, it is worth noting that a large number of issues have occurred in recent months, such as the insufficient cash flow in the exchange wallet, so there is no need to restart a new system to handle new transactions In fact, some members of the Bitcoin community believe that the main purpose of Bitcoin design is to make transactions as fast and cost-effective as sending emails. However, in fact, most miners still rely on a few separate companies: mining pool operators (usually controlled by many large companies) and exchanges – only an address with over 1 million users can access the entire blockchain, and unless they know what they are building, they cannot access the blockchain itself. In addition, it is also said that Bitmain, a mining giant, is trying to use the price advantage of Bitcoin to reduce transaction demand – that is, to launch applications based on Lightning Network Of course, why is Bitcoin only 21.4 million. According to Bitcoinist, more than 21 million BTCs have been extracted, while only 21.4 million are currently in circulation, which means this number is higher than ever before So why is Bitcoin only 21.4 million? Because historically, no country or entity has been able to issue currency. However, we should also know that Bitcoin and gold are created by different people, and each person has their own wallet and encrypted assets, and these funds are controlled by different types of people – just like humans. So, when you want to gain wealth, you can give your cash to them to purchase some other things. Therefore, in either case, as long as the price of Bitcoin increases by 100 times, or drops by 30%, or reaches a price level of $10000, it can become the world’s first decentralized electronic currency network (i.e. “central bank”), so as not to generate inflation

However, if people think that the government will use Bitcoin as the Fiat money and sell it, it is because they will lead to devaluation of the French currency, collapse of the stock market, tightening supervision by central banks of various countries and other measures, thus causing harm to Bitcoin. I really think this assumption is incorrect. In fact, Bitcoin has grown to 21 million, but its supply has not increased much. On the contrary, it is a type of commodity specific to economic activities, with a total amount of 210 billion pieces As Cointelegraph previously pointed out, it is roughly halved every four years, so that miners can produce more tokens each year. In addition, to ensure that the price of Bitcoin remains stable, mining companies require significant resources to maintain its operations. For example, the “Bitcoin Mining Reward” is data calculated using electricity bills. Nevertheless, the “mining revenue” (i.e. annualized) is still below 2%. Due to the fact that most energy use comes from China’s carbon emissions, which are much higher than the electricity consumption of the United States and other countries, this data may not meet demand. However, for ordinary consumers, the usage rate of “Bitcoin mining machines” is often high, especially in developed regions such as the United States: “The average selling price of Bitcoin is about $0.008.