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80% of bitcoin was officially mined and over 16.8 million bitcoins are in circulation. While the majority of bitcoin mined early was produced by individual miners, multi-billion dollar companies are beginning to enter the global mining sector.
Evolution: Individual miners to multi-billion dollar installations
Traditional assets and currencies are controlled and issued by central entities. As a result, their supplies can be modified and manipulated by the authorities. The US dollar in particular, the reserve currency of the global economy, has its supply managed by the Federal Reserve Bank through a method called quantitative easing, a complex term for a simple concept of printing more d & # 39; money.
Unlike traditional currencies and assets, the supply of bitcoin is fixed and the rules of cryptocurrency are determined by its decentralized protocol. Researchers at the Bank of Finland described bitcoin as "a monopoly managed by a protocol, and not by a management organization".
While analysts and critics of bitcoin and other cryptocurrencies still claim that the value of bitcoin is not supported by anything, the value of bitcoin comes from a basic economic concept of Supply and demand. In the global market, intrinsic value simply does not exist. The value is always subjective and it depends solely on the supply and demand of the market.
Bitcoin is valuable because of its security, computational power, fixed money supply, and growing demand from the global economy. Because only 21 million bitcoins can exist, despite growing demand, more bitcoins can not be extracted or produced once bitcoin supply reaches 21 million.
In the early days of bitcoin, individual miners with small mining facilities were able to extract many low-cost bitcoins because at that time the Bitcoin network did not have access to bitcoins. 39, sufficient computing power. therefore, the difficulty level of bitcoin extraction was low.
The level of difficulty in extracting bitcoins is automatically calculated based on the amount of computational power provided to the network. This particular system prevents the absence of large mining facilities from impact on the global bitcoin network.
For example, hypothetically, if Chinese Bitcoin miners and mining pools were closed, this would have a minimal impact on the production and exploitation of bitcoin, as it would be easier for existing miners to To exploit the bitcoin. decreases.
But the bitcoin mining industry has become a major industry, and it is highly unlikely that the computing power of bitcoin will suddenly drop by large margins overnight. In the coming months, some of Japan's largest technology conglomerates are expected to enter the bitcoin mining sector, allocating billions of dollars to ASIC mine production and large-scale mining centers.
The entry of large conglomerates would equitably distribute the power of miners and manufacturers of mining equipment to the global bitcoin mining market, which is currently dominated by a few companies including Bitmain.
The hash power or computing power of bitcoin represents the stability of the Bitcoin blockchain network. As the bitcoin network, the market, and the mining industry mature, bitcoin will evolve into a major currency, a store of value, and a means of exchange.
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