Why is the total amount of Bitcoin fixed (Why is the total number of Bitcoin 21 million)?

Why is the total amount of Bitcoin fixed? On January 3, 2017, research showed that the total amount of Bitcoin is 21 million based on the Bitcoin network transaction volume.

However, due to the significant difference between this number and the current market price (although the price of Bitcoin has been rising in recent months), its volatility has gradually increased, resulting in a decrease in the total market value of Bitcoin from 1 billion to 2 billion US dollars. In time, the market value of Bitcoin continues to change, and this situation may continue as more and more exchanges start accepting Bitcoin as a payment method. So why does Bitcoin experience such fluctuations? Let’s analyze the reasons together!

Bitcoin has a very fast issuance speed, and every time someone purchases a block, they receive a fee. This fee is determined by how much electricity the miners are willing to spend. In order to attract more people to join mining, they need to provide a certain proportion of network resources and other infrastructure services to the mining pool, and this part of the income is locked.

Currently, there is almost no mechanism in the system to ensure the security and reliability of Bitcoin. If the largest supplier of Bitcoin can obtain these rewards without using any technology or security tools, it will not generate profits. On the contrary, only if you hold at least 50% or more of BTC and all remaining BTC, the average demand for Bitcoin will peak.

Therefore, through estimation of Bitcoin, people usually believe that the total amount of Bitcoin will be fixed and immutable. But in fact, this number has not been confirmed and has not been influenced.

Although the cryptocurrency industry has many different concepts, models, or applications. For example, Bitcoin is the token name in Ethereum, because they have one thing in common, “Bitcoin” and “Ethereum”. However, Bitcoin is a virtual asset independent of other currencies. Bitcoin itself has unique attributes such as decentralization, anonymity, and security. The uniqueness of Bitcoin lies in its divisibility, making it scarcer than gold, while Ethereum is a kind of asset category with a relatively high inflation rate. The higher the liquidity of Bitcoin, the greater its advantage.

As mentioned earlier, when users want to store digital currency in their wallet and send it to another wallet, they do not need to rely on third-party institutions. On the other hand, under certain conditions, Bitcoin tends to support smart contracts.

Why is the total number of Bitcoin 21 million?

Editor’s note: This article is from Caicloud Blockchain (ID: cybtc_com), authorized by Odaily Planet Daily.

Bitcoin was officially launched on December 1, 2009. It has a total of 21 million. It increases issuance once every four years. Until now, all of this seems to have been proven to be incorrect data. So the question is, why did such a big change occur? The answer may be that everyone is calculating different values, quantities, and corresponding algorithms to determine whether these numbers are accurate. Let’s look at the picture below:

How much is the total amount of Bitcoin? Simply put, it is 21 million.

Bitcoin was originally designed to make its total more stable, so over time, this number has become larger and larger. We can see that currently, only about 1 billion BTC is circulating in the network, and there are more than 2 billion blocks produced, which means that about 20 million addresses can become new supply. But it is not clear how many newly created bitcoins are in circulation today.

But, in fact, not all miners will participate, because all transactions require a lot of electricity and storage space to complete, so Bitcoin holders do not fully control their Bitcoin balances. However, due to the high cost of mining equipment, users often cannot directly engage in cryptocurrency transactions, making it difficult for them to understand this complexity.

Of course, some small changes may occur according to the current situation, such as a decrease in computing power or a decrease in difficulty. But in fact, most people know that Bitcoin has certain security risks and it is difficult to solve its security issues through other means.

According to statistics from BitInfoCharts, as of the end of June 2019, Bitcoin has more than 36,000 active wallets, which contain more than one million transactions, accounting for about 98% of the entire market. Then comes Ethereum, EOS, etc. They have the most network nodes, accounting for more than 20% of Ethereum’s network bandwidth. In addition, most Bitcoin addresses are anonymous and not public. Finally, the transaction fee of Bitcoin is relatively high, mainly because it uses a new technology called “zero-knowledge proof”. Although Bitcoin has relatively few use cases, it is still very helpful for developers who want to use this technology. Below, we will analyze several factors that affect the Bitcoin network.1. Conflict of interests between mining companies and ordinary investors Although many people regard Bitcoin as an asset or commodity, it does not mean that it is only an investment, but rather a means of value storage or payment tool, for example, people buy something and store it in one place for various purposes, including exchange media, etc. On the other hand, some people believe that Bitcoin has high financial attributes, especially for those without bank accounts.2. Fierce competition between exchanges Recently,