Why will 1 BTC = 1 BTC always
When a Bitcoin miner mines one bitcoin, the price stays the same. This is true despite the fact that there is a finite supply of bitcoins. This fact has been highlighted by various experts on the internet, including Pierre Rochard. We will explore the nature of Bitcoin's decentralized and finite supply, as well as its bullish sentiment cycle. If you're curious to know how to predict Bitcoin prices, read on!
Bitcoin's finite supply
There are a few theories behind Bitcoin's finite supply. The money supply replacement theory explains the limit at 21 million, which is a fixed upper limit for the total number of Bitcoins that can ever exist. In addition, Satoshi Nakamoto capped the number of new bitcoins every four years, reducing the total supply by half. This limited supply helps ensure that Bitcoins remain rare and deter inflation.
As more people become convinced that bitcoin is money, governments will do everything in their power to protect their currencies and monetary systems. Many believe that the rise of Bitcoin is a sign of the rise of anti-establish movements in many countries since 2008. This will only lead to a greater level of government intervention as governments are increasingly concerned about the threat posed by cryptocurrencies. While many believe in Bitcoin's ability to replace traditional currency, some argue that its finite supply hinders the currency's ability to become a universal currency.
Although Bitcoin's total supply is less than 21 million, its spendable supply is much lower. This is due to the possibility of accidental loss, willful destruction, and technical peculiarities. One way to see this phenomenon is to collect the sum of unspent transaction outputs. This way, the total amount value represents the technically spendable outputs of transactions, while excluding outputs that will probably never be spent. These factors are why bitcoin is a good choice for investors and miners.
Bitcoin's decentralized nature
A Bitcoin is a type of digital currency created as a form of online payment that is completely decentralized. The system enables people to send and receive money without the need for a middleman, allowing for faster transaction times across the global web. Despite the decentralized nature of bitcoin, this open financial system does not yet offer any consumer protections. It is also prone to money laundering and tax evasion, and it has been used to facilitate buying weapons and drugs, as well as child pornography.
As Bitcoin is a decentralized system, it lacks the centralized backing of banks and government entities. Instead, independent nodes approve transactions in the Bitcoin network by consensus. Furthermore, a bitcoin transaction is irreversible, meaning that the sender cannot reverse it. By contrast, banking transactions and conventional online payment systems can be reversed many months after they were initially completed. In addition to this, centralized intermediaries increase the risk of fraud. Because of this, a 1 BTC will always be equal to 1 BTC.
Bitcoin's bullish sentiment cycle
The recent spike in Bitcoin's bullish sentiment is a definite sign that the cryptocurrency will likely continue to see strong price movement. Bitcoin has been fluctuating between $30k and $40k for quite some time, not really moving much either up or down. This is especially notable considering how much it lost in the market crash over a month ago. The market crash has caused many investors to reassess their crypto positions, and a recent spike in sentiment is a good sign that this cycle is about to resume.
The first phase is referred to as the run-up phase. During this phase, the market makes higher highs than before, and technical analysts begin to pick up on new projects. As the trend continues, the early majority enters the market and the overall market sentiment begins to shift to the bullish side. However, when prices drop again, the fear of missing out on profits increases and investors are forced to accept losses.
Although the market is currently bearish, the total crypto market and other cryptocurrency asset classes are not. Other crypto assets are far ahead of bitcoin in terms of innovation. They are building the next internet based on blockchain technology. The release of altcoins and the hype of the metaverse will continue to drive the demand for crypto, and Bitcoin's price will bounce back. However, we should wait until the end of December 2022 to see if the bearish sentiment cycle will continue.