Understanding Bitcoin’s total supply limit: Ethereum Guide
As one of the largest and most famous cryptocurrency, Bitcoin caused an intense discussion about its basic architecture. One of the basic aspects that attracted significant attention is the scarcity of Bitcoin’s total offer. In this article, we will explore the concept of a limited number of bitcoins, explore the protocol responsible for it and examine why participants cannot manipulate or ignore this rule.
The concept of total supply
The total amount of new bitcoin that can be extracted is limited to 21 million. This means that after all 21 million Bitcoin were created, there will be no additional supplements for existing supply. The mining process of new bitcoins involves solving complex mathematical equations, which requires significant strength and energy on the computer.
Why limited total supply?
The bitcoin total supply limit serves several purposes:
- Prevents inflation : With a fixed supply of bitcoins, there is no possibility of inflation pressures. This maintains the value of each currency unit.
- Provides scarcity : The limited availability of new bitcoins ensures that the requirement exceeds the supply, which, in turn, prevents price manipulation and reduces the risk of market instability.
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Blockchain protocol
The blockchain protocol responsible for conducting the limitations of the total offer of bitcoin is the Consensus of Evidence (POW) algorithm. In Pow, the miners compete for resolving complex mathematical equations, which requires significant strength and energy on the computer. The first miner to solve the equation should add a new block block of block and transmit it to the network.
Why can’t participants break the rule?
Bitcoin network security depends on the decentralized and open nature of the protocol. Any attempt to manipulate or ignore the rules would require significant computer strength and energy, which are currently beyond the possibilities of the highest mining operations. Additionally:
- Mining difficulties increase : Growth levels in dusty war make it more expensive and more intensive for miners to confirm transactions and create new blocks.
- Network security requires trust
: Trusting in a decentralized network means that participants must have faith in the integrity of the protocol, which is difficult to achieve without significant supervision.
Conclusion
Bitcoin’s limited total supply serves as a powerful mechanism for maintaining its value, preventing inflationary pressures and promoting decentralized management. The Blockchain protocol responsible for the implementation of this rule is the work consensus algorithm (POW) that is based on the safety of the network and the confidence of participants to work effectively.
In conclusion, although it may seem against it that the system designed to promote scarcity and inflation prevention will also have restrictions, these limitations are essential for maintaining the integrity and stability of the Bitcoin network.
