This weekend has been significant for bitcoin, since then 80% of the cryptocurrency the number one produced and is already handling. The Protocol Satoshi Nakamoto was one of the first experiencing the lack of digital, and soon enough bitcoin will become even harder to obtain.
Were only 4.2 million bitcoins
As of 13 January 2018 were received 16.8 million coins. Now miners will have to get only 20%. When Satoshi Nakamoto introduced the bitcoin Protocol to the public, running the code in 2009, the cryptocurrency came with limited supply.
Offer will never be increased, because the production of bitcoin is limited to 21 million, and eventually take possession of them will be harder. While the plan of the Creator and process the network of miners succeeded in this rule by using the hash power. However, it is believed that the proposal can be increased by using various manipulative tactics, such as 51% or Sybil attacks. However, in the nearly 10 years of existence of bitcoin no one has been able to violate this restriction.
The solution to the underlying problem
Satoshi decided one of the most difficult computational equations – the problem of lack of security, which for decades was a stumbling block for scientists. The problem with distributed networks, leading to errors or security flaws that makes it easy to attack the network. This, in turn, makes it difficult to create Protocol, which gives the proof of the solvability of the network.
Thanks to the algorithm of proof of work (Proof-of-Work) in the original Protocol of bitcoin, the network has become safe, because attacks had become too costly and time consuming. For the first time in the world of digital computing Satoshi introduced the asset which it was impossible to copy, or double-spend.
When the asset is limited to the increased supply causes the demand in the market. Thus, the gap between the total number of cryptocurrency and the number of people willing to buy will boost its price.
Mining bitcoin will become even more difficult. In addition, miners have to constantly increase its computing power.
Economic problem: the gap between the total number of cryptocurrency and the number of people willing to buy
After 2 years, depending on the speed of hashing, the reward for new block found on the network will decrease. This means that instead of 12.5 BTC per block mined, miners will receive a 6.25 BTC.
Agreement on the consensus in the network with a reduction of the remuneration of 2 times every four years will make bitcoin more valuable. To continue mining cryptocurrency major mining centres will have to increase computing power using the latest equipment and technology. Accordingly, the price per bitcoin will also increase.
The countdown on the network by reducing the reward 2 times for a new found block
What distinguishes bitcoin from other cryptocurrencies
More should pay attention to the fact that the issue of bitcoin is Satoshi, in contrast to the 1 300 other cryptocurrencies, sostovlyaet only 21 million coins. Other digital currencies already have billions of coins in circulation, and billions of people are using other less proven consensus mechanisms such as Proof-of-Stake. Thus, the inventor of bitcoin has created something unique and different from digital goods that we enjoy today. Unlike digital music or films, bitcoin can’t be copied.
This weekend was marked by the fact that 16.8 million coins already mined BTC and a large number of them were lost. Captainvalor, assured that the digital lack will make bitcoin even more valuable over time.