Why does the Bitcoin network halve its issuance (Why does Bitcoin rise and fall)?
Why does the Bitcoin network halve its issuance? The production and supply of Bi
Why does the Bitcoin network halve its issuance? The production and supply of Bitcoin determine its price. According to calculations by CoinMetrics, on December 28, 2017, it reached 110,000 blocks. The reduction in mining rewards leading to halving is an inevitable trend, but based on historical data, the two Bitcoin halvings in 2017 were caused by a decrease in mining difficulty. In July 2016, with the difficulty increasing to 16T (8 transactions per second), 21 million Bitcoins were mined, causing the entire market to become extremely unstable and oversupplied. (cointelegraph)
Why does Bitcoin rise and fall
Editor’s note: This article is from Odaily, authorized for reprinting.
Recently, Bitcoin has experienced a large rise and fall after a brief consolidation period. It reached a high of $12,800 on January 8, with an increase of nearly 80%, but then quickly fell back to around $10,700. However, with the price rebounding above $12,000 and breaking through the $13,000 mark, Bitcoin seems to have ushered in a new climax. Why is there such a big surge? Let’s briefly understand what “cryptocurrency” is. First, you might say that the word “blockchain” sounds “decentralized,” but in fact, it doesn’t mean “open”. So, for those who think of cryptocurrencies as just a payment tool, there may still be some misunderstandings. “Blockchain is a protocol that helps users achieve self-sovereignty.” So what is Bitcoin exactly? Let’s take a closer look below.
What are cryptographic assets? Cryptographic assets are also called digital tokens or virtual property. They represent a new type of thing with unique attributes and value storage capabilities. These new things are called cryptographic assets, such as gold, real estate, etc. They obtain profits by holding them (such as returns in the stock market) and then convert these investments into fiat currency. Therefore, if a project wants to become a true fintech company, it must purchase the equity of the project – that is, issue security-type tokens or similar commodities. These tokens usually have two functions: tradability and non-transferability, such as being used as a means of exchange, accounting unit, or even other forms of digital identity. When the demand for something increases among investors, this product can be converted, just like ordinary people now use money in their bank accounts to consume with cryptocurrencies. However, this situation becomes increasingly inconvenient without the presence of intermediaries, because once someone is willing to sell their funds for additional benefits, they will sell their assets or cash them out to customers. (Image source: Internet)
Another point to note is that “cryptographic assets” do not refer to Bitcoin itself. In fact, “cryptographic assets” is a relatively new field. According to data from cryptocurrency researcher CoinMetrics, Bitcoin’s market share reached about 70% in the first half of 2020. However, since the beginning of this year, this proportion has dropped to around 30%, currently only accounting for about 1% of the total market, which is a huge change compared to 15% in 2017. In addition, “cryptographic assets” also have a significant growth trend, especially last year, where the number of Bitcoins traded steadily increased across all exchanges. In the first quarter of 2020, the total trading volume of cryptographic assets surged, with Bitfinex accounting for over 50%, followed by Kraken at 24% and Huobi and OKEX at 13%, and then Binance, Huobi, and OKEx.
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