Is Bitcoin dead? This is what the basics show
Is Bitcoin dead? This is what the basics show
BitcoinBTC + 1.1% is down 55.55% since the beginning of the year, which has led to speculation that it is dead and that its price will never recover. Last year, it fluctuated between $68,789 and $17,708, which supports its extreme volatility and gives bitcoin critics enough evidence to support their claim that bitcoin is no longer viable.
Daily life in Krakow under coronavirus lockdown
An Uber Eats cleaner wearing a protective mask passes in front of a Bitcoin exchange shop in Krakow .
According to the Bitcoin content website 99 Bitcoin, 17 credible news sources and celebrities have announced the death of Bitcoin in 2022, with the latest article from the US Jacobin Magazine.
If the price of oil - another commodity - fell by 55.55% in six months, would you say oil is dead? Any reasonable contributor to the oil market will take into account the fundamentals of the oil market, such as demand, supply, government policies, competing energy sources, etc. If all factors are relatively positive, then a price drop will start to appear as an opportunity.
Bitcoin hash rate
This refers to the total amount of computing power that the Bitcoin network uses. It helps Bitcoin stakeholders estimate the network's level of decentralization and security. According to digital asset firm Blockchain.com, the Bitcoin hash rate has been on an upward trend and reached an all-time high on June 12, 2022.
This indicates that the amount of computing power dedicated to supporting the Bitcoin network is approaching an all-time high and that the Bitcoin network has never been more secure.
When the price of Bitcoin dropped below $20,000 two weeks ago, some miners were mining Bitcoin at a loss, according to cryptocurrency rating platform CryptoRank.io. That is, the cost of mining one bitcoin was much higher than the price of one bitcoin. So why do miners push the hash rate to an all-time high when the value of every bitcoin mined is close to or less than the cost of production?
Bitcoin supply
The supply of Bitcoin is limited to 21 million coins. However, the total supply of Bitcoin is just over 19 million, with the remaining two million still unmined. About 1 million bitcoins mined by Satoshi Nakamoto never leave their initial wallet and are supposed to be locked away forever.
People have misplaced the private keys of their Bitcoin wallets over the years. If the keys are never recovered, the bitcoins stored in those wallets may be lost forever. This means that there are a lot of bitcoins out of circulation. This makes Bitcoin the most difficult asset to acquire because it is expensive to produce more (read mining), and there is a tough market cap of 21 million.
Institutional adoption of bitcoin is increasing, and more institutions are looking to add some level of exposure to bitcoin to their balance sheets. This is an indication that supply will shrink.
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| Is Bitcoin dead This is what the basics show |
Bitcoin's Lightning Network
This refers to the second layer built on the Bitcoin network that allows Bitcoin transactions to take place outside the blockchain. It speeds up transactions and reduces transaction costs. The Lightning Network has solved the problem of Bitcoin scalability. The world can use the Lightning Network to carry out millions of Bitcoin transactions per second and make small payments with very low transaction fees.
According to the Lightning Volume 2 status report from Arcane Research, the Lightning Layer has become the technology behind Bitcoin to become the original currency of the Internet, with the number of users growing exponentially and the number of lightning transactions approaching 4,000 Bitcoin.
Paco De La India, an Indian who traveled 40 countries in 400 days using only Bitcoin, is one of the best examples of the power of the Lightning Network. He is currently at day 282 and uses Bitrefill frequently to spend Bitcoin on the Lightning Network. Bitrefill is a financial technology company that allows you to buy products and pay for services by taking your Bitcoin equivalent and paying the seller in their original currency.
Regulating digital assets
Governments around the world are softening their stance on digital assets and putting in place regulatory frameworks to take advantage of this technology. While some governments, such as El Salvador and the Central African Repfublic, are seeking widespread adoption, others simply regulate cryptocurrency exchanges and tax cryptocurrency gains.
The most notable regulations are the two Australian Bitcoin ETFs (exchange-traded funds), Binance's Dubai license, Canada's Purpose Spot Bitcoin ETF, and the current European Union legislative package to control digital assets.
The majority of companies looking to add Bitcoin exposure to their balance sheet are unable to do so due to their government's ban on Bitcoin transactions
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