What is Value of Money Anyway?
Like all currencies cryptocurrencies also start with no perceived value. The value is gradually generated by the people on the network. Together the people build the demand of the currency. These people on the network get different rights, the rights lead to different roles of the people. The roles can be divided further.
These include three main categories:
The value of the currency in a nutshell is greatly determined by the number of people willing and able to buy the product at a particular price. Basic political economy right.
Then, the price level also depends on how well was the currency developed.
Bitcoin is actively seeking better technologies and reinforcements. Because the look out for updates does not stop, the network keeps getting stronger and better. Adding more and more infrastructure and therefore value to the currency.
Currency reserve is expanded by the miners. This is more complex than our explanation, but lets see.
Miners are given Newly Minted Bitcoins for their services or as reward. Shouldn’t we all object to it?
The reward for the miners is reduced after every 210,000 new blocks are created. The reward is reduced by half. This means that the number of coins generated when a new block is created goes down by half. The reward system started as 50 coins per new block. It then went down to 25 coins per block after the next 210,000. It is 12.5 currently. It will inevitably fall to 6 in a couple of years. The halving occurs every four years, approximately.
However, according to the current consensus, the bitcoin supply is limited to 21 Million bitcoins. This means that the coin could take only 64 halvings in total. After these 64 times, no bitcoins will be used as rewards for miners. And once the circulation on the network reaches saturation, no new coins will be minted. But miners will be making more money in tipping by then because of rocketed prices and rapid transactions.
So, the effort is justified considering just how much computing power, money in equipment and resources they just had to spend to ear all of this? Not to forget, their vital voting that keeps BTC together, well, most days. 😉
The last Bitcoin, Gonna get pricey? Should we stock up?
The 21 millionth coin will be the last bitcoin if rules and the agreement remains intact and uncontested; as it is always open to vote. Based on assumptions and sheer speculation the 21 millionth coin is likely to fall in year 2140. This year the hype and popularity of bitcoin will cross all limits. It will be breaking the internet. It will be a household name and the youngest of younger people will be interested and keeping tabs on it.
Wow, just like the last slice of pizza. Yum!
The hype and the sense of emergency cocooned around the last bitcoin along with a skyrocketing demand will inflate the price too much. The limited supply and the risen price will add to the bitcoin as a brand. The market clear eventually and the price will stabilize. The transactions may still happen at a high frequency, or even higher than ever before.