Crypto News & ICO Reviews
Part of the appeal of Bitcoin is its finite nature and the fact that there will only ever be 21 million of them. This notion has undoubtedly fueled its meteoric price rise of over 1700% in 2017 from around $800 this time last year to over $14,000 at the end of the year. Traders and speculators wanted a slice of the action in what has been the hottest market since the dot com boom in the nineties.
When the first Bitcoin was mined in 2009 by Satoshi Nakamoto there was a long path ahead but it is unlikely that whoever he is envisioned the explosive growth and almost rampant demand there would be for the digital asset in the latter half of 2017. As of January 13 80% of the crypto currency has now been created leaving only a fifth of the entire supply to be mined.
When the circulating supply ticker hit 16,800,000 less than 20% of all the Bitcoin’s ever created remained. The supply cap is hardcoded into the software and cannot be changed, only 4.2 million Bitcoins are left to come which could have a large influence on the demand and price of the world’s most popular cryptocurrency.
Some speculate that the code can be broken but many believe that Nakamoto cracked one of the hardest computational equations known to computer science; the Byzantine General’s Problem. By using a proof-of-work protocol attacking the network becomes costly and time consuming and mining the block increases in complexity with every new one that is added.
At the moment 12.5 Bitcoin’s are awarded to miners for every block added, and as written in the protocol the reward is halved every four years so in two years’ time they will only get 6.25 BTC. It continues to half until it reaches zero in the year 2140 when all of the Bitcoin’s will have been mined. Mining hardware and technology will need to improve to continue the operation in a profitable way.
One concern is that a few whales are hoarding the majority of Bitcoins making market manipulation a very real possibility. According to reports as much as 40% of the total current supply of Bitcoin is owned by just a thousand people. By collaborating they could easily time sales and manipulate price volatility. Supply and demand are the key factors in markets and this one is more exposed to them than most.
Bitcoin is currently trading at $13,250 down over 30% from its record high of just under $20,000 this time last month. Its total market capacity is $230 billion at the time of writing.