Bitcoin Rivals Fiat Currencies
For years, the central banks of the countries have struggled with inflation rates. Although they struggle, it cannot be said that they are successful in this regard. After the emergence of cryptocurrencies, economists and central banks thought the situation would not change for them. The introduction of stablecoins and the promotion of subsequent projects such as Libra and TON changed things and became the focus of all financial circles.
What does the change in the Bitcoin block reward mean?
Bitcoin gains value year after year and is not under the pressure of any state, which makes people compare Bitcoin to gold. The increase in the price of Bitcoin after the tension between America and Iran supported this similarity. In addition, the fact that the amount of Bitcoin produced and the total amount in the market is clear as a result of its structure makes Bitcoin a reliable port.
One of the most important features of Bitcoin is the production process. Participants, in this process called mining, are given BTC as a reward. After the halving, which will take place for the 3rd time in the Bitcoin ecosystem, the reward given to the miners will be reduced from 12.5 to 6.25 every ten minutes, in other words, when each block is closed. After the halving, there may be a serious increase in the price of Bitcoin. The main reason for this is that contrary to the decrease in the number of Bitcoins that can be earned, the demand is increasing day by day.
In his last article, economist Peter C.Earle, a member of the American Institute of Economics Research, mentioned this change in Bitcoin and made striking statements. Earl’s comments are as follows:
“The block reward that Bitcoin promised to miners will drop from 12.5 BTC to 6.25 BTC, and this will cause the decrease in the number of BTC miners can provide to the market. If central banks continue to fail to stabilize, people will raid Bitcoin and fight to get the remaining BTCs.”
Will the economist’s statement come true? Saying something definite about this would be wrong for now. However, in Venezuela, Argentina and some African countries, which have problems with inflation, Bitcoin is breaking the volume record every day. When we look at these examples, it seems that in the coming years Bitcoin will make trouble for fiat currencies especially of the countries that have problems with inflation.
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