Having a Greater Understanding for the Crypto Process

To create bitcoins, miners must use the computational power of their computers (through their micro-processor) to validate transactions. Transactions are validated every 10 minutes in a block of 1 megabyte. When a block is validated, the minor is rewarded with an amount in BTC. At the beginning of the launch of the BTC, the first blocks were rewarded with 50 BTC, then, every 4 years, the reward is halved.

The first miners were therefore much more paid than they are today, which is normal, because they took a risk in an adventure that had not yet proven. Then the evolution of the BTC has gained legitimacy and minors, meanwhile, take less risk, they are then less paid in BTC. Nevertheless, mining remains profitable. This system is more balanced than in a sphere where one would distribute at once all the BTC. You can You can Check Out This Website for more.The followings are quite important in this matter now.

More concretely:

  • Miners generate 6 blocks per hour, which represents about 210,000 blocks per 4-year cycle
  • The sum of the rewards by blocks 50 + 25 + 12.5 + 6.25 + 3.125 + 1.5625 + … = 100
  • 210,000 X 100 = 21,000,000
  • Also, 1 Bitcoin is now divisible up to 8 decimals after the comma, and this unit is called Satoshi.
  • 1 Bitcoin = 100,000,000 Satoshis, 21 million Bitcoin = 2,100,000,000,000,000 satoshis.

As a result, the “monetary” mass of Bitcoin could be more than enough for the entire planet. And nothing prevents to consider an update of the source code to increase the number of decimals after the decimal point.

Once the 21 million units reached, Bitcoin will logically be less speculative and inevitably less subject also to extreme volatility. The desire to limit Bitcoins gives value because it is the scarcity that makes the price of a good. If we take the example of precious metals, their price is primarily a function of their scarcity.

Especially as the Bitcoin was designed to provide a decentralized alternative to the financial system – and the altcoins participate in such decentralization . Moreover, if it is difficult to modify Bitcoin (as we saw during the ”  war of the forks “), the altcoins offer a formidable “laboratory”, which allows to go much further than what allows to do the “testnet” (the alternative blockchain) of Bitcoin.

Crypto-coins Bitcoin Litecoin Ethereum

One can also think that the Bitcoin advantage of the emergence of these altcoins. It is always of the reference asset used by traders for these alternative digital currencies. And every time one of them is mentioned in the mainstream press, the author will invariably mention Bitcoin, which is the base of this ecosystem.