What Happens to Bitcoin

in #bitcoin7 years ago

Bitcoin is like gold in many. Like gold, Bitcoin cannot simply be created arbitrarily. Gold must be mined out of the ground, and Bitcoin must be mined via digital means. Linked with this process is the stipulation set forth by the founders of Bitcoin that, like gold, it have a limited and finite supply. In fact, there are only 21 million Bitcoins that can be mined in total. Once miners have unlocked this many Bitcoins, the planet's supply will essentially be tapped out, unless Bitcoin's protocol is changed to allow for a larger supply. Supporters of Bitcoin say that, like gold, the fixed supply of the currency means that banks are kept in check and not allowed to arbitrarily issue fiduciary media. But what will happen when the global supply of Bitcoin reaches its limit?

Effects on Bitcoin Miners
It may seem that the group of individuals most directly effected by the limit of the Bitcoin supply will be the Bitcoin miners themselves. On one hand, there are detractors of the Bitcoin limitation who that say that miners will be forced away from the block rewards they receive for their work once the Bitcoin supply has reached 21 million in circulation. In this case, these miners may need to rely on transaction fees in order to maintain operations. Bitcoin.com points to an argument that miners will then find the process unaffordable, leading to a reduction in the number of miners, a centralization process of the Bitcoin network, and numerous negative effects on the Bitcoin system.

This argument assumes that transaction fees alone will be insufficient to keep Bitcoin miners financially solvent once the mining process has been completed. On the other hand, there are reasons to believe that transaction fees and mining costs will even out in the future. Looking ahead by several decades, it is not difficult to imagine that mining chips will become small and highly efficient. This would reduce the burden placed on miners and would allow mining to become an activity with a lower threshold of initial cost. Further, transaction fees may increase, and this could help to keep miners afloat as well.

Price of Bitcoin
Bitcoin has already seen massive hikes in price in just the past few months. While no one is entirely sure how Bitcoin will continue to spread to the larger financial world, it seems likely that a limited supply of the currency may cause prices to continue to increase. There are also stockpiles of inactive coins that are held around the world, the largest supply of which belongs to the person or group who founded Bitcoin, Satoshi Nakamoto. Perhaps this supply, consisting of roughly one million Bitcoins, is intentionally being saved for a time when the global supply is facing increased levels of demand.

download.jpg

Sort:  

A million bitcoins just sitting? Maybe he forgot the password to his wallet

Congratulations @thebest1! You have received a personal award!

1 Year on Steemit
Click on the badge to view your Board of Honor.

Do not miss the last post from @steemitboard!


Participate in the SteemitBoard World Cup Contest!
Collect World Cup badges and win free SBD
Support the Gold Sponsors of the contest: @good-karma and @lukestokes


Do you like SteemitBoard's project? Then Vote for its witness and get one more award!

Congratulations @thebest1! You received a personal award!

Happy Birthday! - You are on the Steem blockchain for 2 years!

You can view your badges on your Steem Board and compare to others on the Steem Ranking

Do not miss the last post from @steemitboard:

The Steem community has lost an epic member! Farewell @woflhart!
SteemitBoard - Witness Update
Do not miss the coming Rocky Mountain Steem Meetup and get a new community badge!
Vote for @Steemitboard as a witness to get one more award and increased upvotes!