bitschep on Nostr: #introductions My buddy asked me this the other day: “So I understand the utility ...
#introductions
My buddy asked me this the other day:
“So I understand the utility that Bitcoin brings but what will drive the price? Just more general awareness and more people buying in?”
This is the response I gave him:
Bitcoin is the first absolute scarcity ever. If people want to mine more gold, they allocate more money to find the gold. If people want to mine more bitcoin they simply cannot. It’s issued at a pre-determined rate, that trends toward zero over time. The last bitcoin issued will be in 2140.
Bitcoins supply is deflationary, everything falls in price relative to bitcoin.
In order to mine a bitcoin, you need to use real world energy, to power these computers, to solve computational puzzles. The more energy and computational power used to mine bitcoin, the harder it is to mine and find a bitcoin. It has this thing called the difficulty adjustment, meaning if another million computers were trying to solve these puzzles. The bitcoin network adjusts the difficulty to find a bitcoin. Allowing it to carry out the intended protocols issuance schedule.
Every 10 minutes a bitcoin puzzle is solved. 3.125 bitcoin are rewarded to the miner who solves the puzzle. The difficulty adjustment ensures that bitcoin are released at the standard 10 minute rate.
I guess he doesn’t understand the utility bitcoin brings…
My buddy asked me this the other day:
“So I understand the utility that Bitcoin brings but what will drive the price? Just more general awareness and more people buying in?”
This is the response I gave him:
Bitcoin is the first absolute scarcity ever. If people want to mine more gold, they allocate more money to find the gold. If people want to mine more bitcoin they simply cannot. It’s issued at a pre-determined rate, that trends toward zero over time. The last bitcoin issued will be in 2140.
Bitcoins supply is deflationary, everything falls in price relative to bitcoin.
In order to mine a bitcoin, you need to use real world energy, to power these computers, to solve computational puzzles. The more energy and computational power used to mine bitcoin, the harder it is to mine and find a bitcoin. It has this thing called the difficulty adjustment, meaning if another million computers were trying to solve these puzzles. The bitcoin network adjusts the difficulty to find a bitcoin. Allowing it to carry out the intended protocols issuance schedule.
Every 10 minutes a bitcoin puzzle is solved. 3.125 bitcoin are rewarded to the miner who solves the puzzle. The difficulty adjustment ensures that bitcoin are released at the standard 10 minute rate.
I guess he doesn’t understand the utility bitcoin brings…