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Why Bitcoin is Fixed (Why Bitcoin is Unique)

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Why Bitcoin is fixed? Bitcoin is fixed and its value is determined by a specifi

Why Bitcoin is Fixed (Why Bitcoin is Unique)

Why Bitcoin is fixed? Bitcoin is fixed and its value is determined by a specific individual.

When Bitcoin’s price fluctuates, there is a unique situation that occurs: people believe that its price is controlled by someone else – in other words, they don’t trust it.

But this claim has no basis. In fact, Bitcoin is not synonymous with fixed supply or scarce assets, and not all cryptocurrencies are. If Bitcoin is referred to as digital gold, then it is a very unique digital currency because its quantity is directly proportional to its value.

In order for Bitcoin to become the world’s largest commodity like gold, we need to consider why they always have the same results. Why is that? Why can Bitcoin be seen as “money”?

For most people, the term “money” refers to those who invest their wealth in something, even some bulk transactions. But the fact is, these assets may eventually obtain different returns and risks in different ways. So, even though some people may have a strong interest in the cryptocurrency field and are interested in other types of assets, there are still many people using them. What is a fixed supply? Since BTC cannot be stored on the blockchain indefinitely like gold and usually does not increase due to its price changes. For example, even if you have BTC and have multiple Bitcoin wallet addresses, you cannot maintain your Bitcoin balance. Over time, these reserves will decrease or mitigate the possibility of loss or movement.

Although BTC is limited as a fungible and indivisible thing, in many cases, this is not completely impossible. For example, in recent years, BTC has remained stable. However, Bitcoin is gradually losing its appeal now, and more and more developers have entered the field. According to data from BitInfoCharts as of January 31, 2020, the total supply of Bitcoin has reached 1 billion. Over 50% of them have been mined, and another 40% are still in the experimental stage, with only about 20% of the yield available. (Source: Bitinfocharts)

The usage rate of Bitcoin has been increasing since 2008. There have been a series of significant events in recent quarters, such as the new US President Biden’s “Economic Freedom Act” and the implementation of new stimulus plans by governments around the world.

So far, the main application of Bitcoin is still in private markets. For example, Ripple CEO Brad Garlinghouse said, “I personally prefer to raise funds through private financing.” The biggest use of Bitcoin is? First, Bitcoin is a peer-to-peer electronic cash system that allows people to transfer funds directly between various accounts on the network. Secondly, Bitcoin allows users to send, receive, and exchange fiat currencies between networks.

The third major use case is cryptocurrency payments backed by the US dollar. Bitcoin also provides an alternative way to pay bills and other fees. The second use case of Bitcoin is storing disk space.

Why Bitcoin is Unique

Editor’s note: This article is from the Plain Blockchain(ID:hellobtc), author: Five Fireball Master, authorized reprint of Odaily Star Daily.

Is Bitcoin the world’s first centralized digital currency? Why is it uniquely trustworthy? Because it has the characteristics of decentralization, it can achieve peer-to-peer transactions, without third-party intermediaries and censorship, and achieve scalability through “smart contracts”. This concept is not unfamiliar to anyone and is often used in reality.

But in reality, Bitcoin is not a perfect design. In theory, it is a decentralized electronic cash system without any central authority to manage the flow of funds. Its design goal is to allow everyone to participate in the payment system. So you don’t have to worry about banks being hacked or financial fraud. As long as you have enough money in your wallet, you can make transfers; otherwise, you can only use them to purchase goods and services, which is called encrypted assets.

Therefore, the reason why Bitcoin exists is that it is a completely decentralized network protocol, which provides the simplest and more secure way for users to send information and record ownership information, rather than to hide value or gain profits. So what is true decentralization? In fact, decentralized software is a distributed ledger technology that can directly store users’ financial data on various platforms on the Internet, ensuring data security and effectiveness. Moreover, since decentralized nodes cannot access each other, it is impossible to obtain their data openly and transparently like traditional centralized computers. This also means that users can publish their own identity information on them. If we stretch the time a bit, say, 10 years, 10 years later, we will see that our business activities will track the development of this trend in the next 20 years in order to make it more reliable.

There is also a consensus mechanism, which verifies transactions in a cryptographic way. The difference between this consensus algorithm and traditional consensus structures is that it uses a proof-of-stake (PoS) mechanism, that is, miners can receive block rewards and dividends after mining new coins, but a certain quantity is required to generate new tokens. Simply put, “holding a large amount of Bitcoin to earn interest” is a commonly used consensus algorithm in the market.

Of course, in addition to “holding Bitcoin as a personal savings account,” most people believe that only 1% of the total supply of 21 million BTC is locked.

However, although many people speculate about the mysterious power behind Bitcoin, they all know that “the biggest problem created by Bitcoin is its large price fluctuations, especially as market demand continues to increase, people often hope they will not lose all their wealth.”

According to the timeline of Bitcoin’s birth till now, it has accumulated some experience and research results, summarized as follows:

1. There have been two types of stablecoins that appeared earliest, USDT and PAX.

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