Understanding the limitation of the total supply of Bitcoin: a guide to Ethereum
Being one of the largest and largely recognized cryptocurrencies, Bitcoin has aroused an intense debate on its architecture below. A fundamental aspect that attracted significant attention is the scarcity of the total supply of Bitcoin. In this article, we will deepen the concept of a limited total number of Bitcoin, we will explore the protocol responsible for the application and examine because the participants are not authorized to manipulate or evade this rule.
The concept of total supply
The total amount of new bitcoins that can be extracted is limited to 21 million. This means that once all 21 million bitcoins are created, there will be no further additions to the existing offer. The new bitcoin mining process involves the resolution of complex mathematical equations, which require significant computational power and energy.
Why a limited total offer?
The limitation of the total supply of Bitcoin has several purposes:
1 This maintains the value of each currency unit.
2
Promotes decentralized governance : the decentralized nature of the Bitcoin network and the basis of the Open Source code ensure that there is no single entity that controls the supply or manipulate the system for your profit.
The blockchain protocol
The blockchain protocol responsible for the application of the limitation of the total Bitcoin supply is the work trial consent algorithm (POW). In power, miners compete to solve complex mathematical equations, which require computational power and computational energy. The first miner to solve the equation can add a new block to the blockchain and transmit it to the net.
Why can't participants violate the rule?
The safety of the Bitcoin network is based on the decentralized and open source nature of the protocol. Any attempt to manipulate or evade the rule would require computational power and computational energy, which is currently beyond the skills even of the greatest mining operations. Furthermore:
The difficulty of mining increases : the growing level of difficulty in power makes it more expensive and with a high energy intensity for miners to validate transactions and create new blocks.
Network security requires trust : dependence on a decentralized network means that participants must have confidence in the integrity of the protocol, which is difficult to reach without a significant oversight.
Conclusion
The limited total supply of Bitcoin acts as a robust mechanism to maintain its value, prevent inflationary pressures and promote decentralized governance. The blockchain protocol responsible for the application of this rule is the consent algorithm of the test of work (POW), which is based on the safety of the network and on the trust of the participants to function effectively.
In conclusion, although it may seem counterintuitive that a system intended to promote scarcity and prevent inflation would also have limits, these constraints are essential to maintain the integrity and stability of the Bitcoin network.