Things to Understand about Bitcoin
Bitcoin Info > Things to Understand about Bitcoin
- There will never be more than 21 million Bitcoins produced, unlike dollars whose printing is unlimited.
- What prevents the 21 million limit from being increased.
- Bitcoin is decentralized and not controlled by anyone.
- Bitcoin is more like the Federal Reserve than like VISA. (diagram) The banking system uses multiple layers.
- The Halvening: Every ~4 years, the amount of fees that are paid to miners for validating transactions gets cut in half.
- This cuts the issuance of new Bitcoin in half, making Bitcoin more scarce
- From 2016 – 2020, the fees were 12.5 bitcoins per block
- From 2020 -2024, the fees are 6.25 bitcoins per block
- This increased scarcity leads indirectly, to higher prices
- This cuts the issuance of new Bitcoin in half, making Bitcoin more scarce
- How Bitcoin is like Telsa: Tesla was built with early adopters who saw past certain drawbacks. Once the innovation was adopted, prices dropped and drawbacks declined.
- Some alternatives to Bitcoin, called Alt-Coins serve serve different roles like stocks, mutual funds, applications, membership tokens, and insurance.
- In the future, people in Zimbabwe may get crop insurance even if their local governance and businesss climate does not support an insurance industry. The insurance could use two crypto tokens:
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