From Individuals To MNC’s: The Evolution Of Bitcoin Mining- Unkrypted

by Ricky Makan Co-Founder at Unkrypted

Jan. 13 marked an important landmark for Bitcoin when 16.8 million bitcoins (BTC), or 80 percent of the entire Bitcoin supply, were mined. This means only 4.2 million bitcoins, or 20 percent, are left to mine until Bitcoin’s 21 million supply cap is reached.

Bitcoin includes the 21 million cap built into its protocol by Satoshi Nakamoto, which was first mentioned in their White Paper which was published in 2008, as a means to begin digital shortage to cryptocurrency.  With such a cap in place, the more bitcoins are mined, the more dearths are produced on the market.

While the majority of the bitcoins were mined by individual miners in the early days, now big MNCs have started entering the global mining sector.

Individual to Multi-Billion Dollar Companies

Traditional assets and currencies are controlled and issued by central units. As a result, their supplies can be altered and influenced by the authorities. The US dollar in particular, the reserve currency of the global economy, has its supply controlled by the Federal Reserve Bank through a method called quantitative easing, a complex term for a simple concept of printing more cash.

Unlike traditional currencies and assets, the supply of bitcoin is fixed and the rules of the cryptocurrency are determined by its decentralized protocol. While forecasters and reviewers of bitcoin and other cryptocurrencies continually state that the value of bitcoin is not supported by anything, the value of bitcoin originates from a basic economic concept of supply and demand. In the global market, the inherent value simply does not exist. Value is always biased and it solely depends on the supply and demand of the market.

Bitcoin is valuable because of its security, computing power, fixed financial supply, and rising demand from the global economy. Because only 21 million bitcoins can ever exist, despite the rising demand, more bitcoins cannot be mined or produced once the supply of bitcoin hits 21 million.

In the early days of bitcoin, individual miners with small-scale mining setups were able to mine many bitcoins with low electricity costs, because at the time, there wasn’t enough computing power contributing to the Bitcoin network and as result, the difficulty level of bitcoin mining was low.

The bitcoin mining difficulty level is automatically planned based on the amount of computing power given to the network. This particular system prevents the absence of large mining facilities from impacting the global Bitcoin network.

For instance, hypothetically, if Korean bitcoin miners and mining pools shut down, it would have minimal impact on the production and mining of bitcoin because then it would be easier for existing miners to mine bitcoin, as the difficulty level decreases.

Established Industry

However, the bitcoin mining sector has grown-up to a foremost industry and it is doubtful that the computing power of bitcoin will suddenly decrease overnight by large margins. In the upcoming months, some of the largest technologies multinationals in Japan are expected to enter the bitcoin mining sector, allocating billions of dollars in producing ASIC miners and establishing large-scale mining centers.

The entrance of major conglomerates would evenly distribute the power of miners and mining equipment manufacturers within the global bitcoin mining market, which is currently dominated by a few companies including Bitmain.

Hash power or computing power of bitcoin represents the stability of the Bitcoin blockchain network. As the bitcoin community, market, and mining industry mature, bitcoin will evolve into a major currency, store of value, and a medium of exchange.


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About Ricky Makan Advanced   Co-Founder at Unkrypted

6 connections, 3 recommendations, 101 honor points.
Joined APSense since, November 28th, 2017, From Delhi, India.

Created on Jan 23rd 2018 00:41. Viewed 304 times.


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