The price of Bitcoin exploded and exceeded $30,000 in January 2021 as a result of almost a year-long bullish cycle. Consequently, the demand for BTC has proliferated. Individuals, as well as organizations, and businesses want to invest in BTC.
If you are also are looking to get BTC, it's very important to take the time and learn more about Bitcoin and blockchain technology. A good place to start is by learning how new BTC are created. Keep reading to find out more.
Before we dive in, we will explain what blockchain technology is and why it is an essential component of the crypto world. Blockchain technology is a great innovation as it is the Bitcoin. Created by Satoshi Nakamoto, it ensures full transparency of the system, fast transactions over the internet, without any help or interference of middlemen.
That said, it functions perfectly well without financial institutions or authorities. This is a peer-to-peer network where the growing list of records is distributed across computer systems all around the world. Hence it is impossible for someone to control the network, cheat, or hack, the blockchain network.
Because there is no designated entity that approves the transactions or secures the network, these activities are facilitated by the so-called miners. They complete two crucial tasks. The miners process and approve the transactions in the network, and with that, they also ensure the network remains safe.
How Exactly Are New BTC Generated?
This leads us to the main output of bitcoin mining. The miners discover new BTC by solving difficult math puzzles. Today the mining is increasingly competitive because as more miners join the network, the level of difficulty of mining increases. Hence, the rate at which new BTC are discovered is very predictable. Otherwise, the miners get block rewards for their work.
But, it should be noted that Nakamoto limited the number of BTC to 21 million. And because everything is completely transparent, users know the exact number of BTC in circulation. To date, 18.5 million BTC have been mined.
Moreover, the halving splits the block reward that miners receive in half. The event occurs after 210,000 BTC are mined. This event has a great impact on the supply of BTC. As the reward is decreasing, fewer miners will work on the network. As a result, the number of new BTC is cut in half. The halving also influences the price of Bitcoin due to the decreased supply of BTC. According to the previous data, the price rises after each halving.
As we mentioned before, mining is not very profitable; while the price of Bitcoin continues to rise; a lot of people choose to obtain BTC on online trading sites. A great platform is the Bitqs app. This is an auto-trading robot, which means beginners are more than welcome to check out the platform, as they don't have to have great knowledge of this topic to trade here. Moreover, users on the site can earn up to £1,200 on the platform.
It's also worth mentioning that the site offers an excellent education center where members can access top tutorials and trading guides. If you want to register on the site, you need to deposit as little as $250.
What Happens to Bitcoin After All BTC Are Mined?
First and foremost, the block rewards will cease to exist, and miners will receive transaction fees for their work. They also get transaction fees now, but the main part that makes mining profitable is again the block reward. This is why, even now, miners work in mining pools and farms, because it is very costly to mine on your own. As Bitcoin and other cryptocurrencies get more popular, mining will only get more competitive.
The Price of Bitcoin
As we can see, the price of Bitcoin is very much affected by the interaction of supply and demand. When it comes to the supply, the rate at which new BTC are created, as well as the number of BTC, it all influences the price of Bitcoin.
Otherwise, we can safely say that as the price continues to rise, the demand will likely increase even more for Bitcoin, which will further fuel the interest for BTC beyond the crypto community.
When it comes to future predictions about Bitcoin, they are very optimistic. In fact, a lot of experts think that the price will surpass $100,000 in 2025. Others hope that it will break $50,000 in 2021.
On the other hand, Bitcoin has also put in the spotlight other cryptocurrencies and even prompted some organizations to develop their own cryptocurrency. For example, China has launched its first digital cryptocurrency Yuan. All in all, right now, the world of crypto is definitely full of possibilities for businesses and individuals.