The Importance of Maximum Supply: How does Bitcoin’s price increase more than any other crypto’s?
“A maximum supply is the foundation of the long-term success of Bitcoin and is the basis for its value of billions of dollars!”
Over the past years, Bitcoin has made an overwhelmingly strong name for itself that was unprecedented before. The economic and financial nature of technological innovation carries opportunities that have the power to make people change their way of thinking. Currently, it has a market capitalization of over 200 billion dollars, and this number does not seem to be stopping anytime soon. Bitcoin is an unparalleled means for turning its owners into millionaires or even billionaires and allowing them join the group of the wealthiest people.
Bitcoin makes it easier to increase private equity as the basis provided by the system offers countless different perspectives compared to traditional funds. When we talk about Bitcoin, we also need to take those new innovations that we never before seen in previous economic environments into account. That is why the system created by Satoshi Nakamoto is so brilliant. It possesses outstanding values in many different ways.
Since the creation of Bitcoin, numerous cryptocurrencies have emerged with different technological and economic approaches. Needless to say, separate consensuses entail distinctive advantages and disadvantages. Several arguments for and against individual solutions have been postulated, but we need to keep one thing in mind: the biggest value of cryptocurrency comes from having a more transparent system that traditional money does, and its value is also more persistent for it is less exposed to manipulation than traditional monetary instruments. The only weak point it has is “false trading” that clearly has its shortcomings.
What are the biggest drawbacks associated with the traditional monetary system? There might be several suggestions for this question, but I would highlight one very important aspect: demand! Banks are constantly increasing money in the economy which results in a system where real value and money supply are continuously changing and prices of previous products are forever increasing. This is only one regard where its characteristics greatly differ from the system of Bitcoin.
I am convinced that Bitcoin has the best principles, not only technology-wise but also form a financial perspective. The maximum supply is a barrier that also serves as the best guarantee for a price increase in times of demand increase. Clearly, the more people want to purchase Bitcoin, the higher the price will be as there is simply a limit to how much can be mined. I believe this is what makes Bitcoin so brilliant.
The impeccable blockchain and the maximum supply are what carry the value with which no one else can compete. This is exactly the reason I consider the forecasts that predict a future price of hundreds of thousands of dollars or ever millions for just one piece of Bitcoin to be a reasonable estimate. When we regard Bitcoin as actual money, it represents a thoroughly different value than does traditional money. With Bitcoin, the opportunity to increase wealth is way more accessible than with traditional money. It comes without inflation which results in no chance for value manipulation as opposed to its current, traditional counterpart that is greatly exposed to this type of risk.
Obviously, this system is not perfect by any means. Besides its advantages, there are certain aspects that can decrease the attraction towards Bitcoin. There are several criticisms of the mining process as the power consumption of the system can become extremely high. I do hope that the advancements of technology will solve this matter and there will be mining machines available with performance that allows for more economical power usage. This trend is already here though as the newer types of mining machines are much more efficient than their predecessors. Today’s mining is running based on a large industrial system as resources required for efficiency cannot get resolved any other way; which is probably one of the biggest criticisms of the Proof-of-Work system. The issue does not only affect Bitcoin but also other systems that are operating on similar foundations. The fear of the 51% attacks are very much reasonable and, unfortunately, these attacks can also occur in two different ways: either as an external or an internal attack. What seems to be more interesting is the internal attack as the increase of Bitcoin’s total value can also bring about an increase in individual conflicts of interest.
Over the past few months, the price of Bitcoin has been continuously increasing which attracts new buyers and investors. Exchanges have considerable importance, and their security is a very significant measurement that plays a key role in whether the demand for Bitcoin will keep increasing. Needless to say, negative news on malicious hacking attacks are not helping build trust. The approach of decentralized technology alters the concept of responsibility which might easily lead to the misuse and abuse of the system. Unfortunately, this drawback is something that participants must accept and take on. Luckily, this is not holding back the interest and demand for Bitcoin; at worse, it has slowed down its spread.
One of the consequences of cryptocurrencies’ expansion might be the revision of regulations. According to my own beliefs, these regulations will not have the power to negatively influence the spread of Bitcoin in the long run. There might be some countries that will restrict the local possibilities of Bitcoin, but it is extremely hard to imagine a case where there is a worldwide consensus to ban Bitcoin for good. One reason is, it would simply be impossible from a sheer technological perspective.
Taking all the previously mentioned possible drawbacks into account, we can still state that the principles of Bitcoin are brilliant since maximum supply is able to avoid manipulative value decreases. This is one of Bitcoin’s most outstanding aspects and the basis for its long-term price increase. High demand also seems to be guaranteed as Bitcoin receives greater attention which leads to more people that believe and trust in Bitcoin’s long-term success. Of course, just like no other system is perfect, theirs is not an exception either. The most adequate question to ask would be if this is better than the current monetary system. I believe it is, however, human factor implies risk just like in the case of any other asset.
The basic approach of ILCoin corresponds with the concept of Bitcoin, and we believe it carries great value. It is evident that these two systems have their dissimilarities as ILCoin represents a different objective with regards to the fact that ILCoin’s blockchain system is possessing more serious and substantial technological capabilities than the one of Bitcoin. ILCoin is a blockchain innovation that, in the future, will handle technology, not just at a transaction level, but also at the level of data storage.
