Reliability of Bitcoin and How It Works

in #steemit7 years ago

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The mechanism behind Bitcoin's reliability is quite simple. Since entire Bitcoin network is a decentralized system, there is no chance for the complete breakdown. There is no chance for all blocks to stop. So, what happens? If it becomes unprofitable in some moment, there will be more mining potential. With any decrease, there will be more room for people to mine coins. Basically, in that way, with same resources, there will be more capacity to generate coins. That way, there is a chance again to create profit.

When it comes to Bitcoin reliability, since the beginning of it, from 2008., there is a tendency of the constant rise in Bitcoin value, since the white paper started, the value of cryptocurrency went up multiple times.

Bitcoin has a strong protocol, so basically there is no space for internal flaws, all the problems with it can only come from outside, from the way Bitcoin is perceived in the society. A bad public image can lead to decrease in value if encourages people to sell units, but, that will lead to drop in the price, which will lead again to people buying more Bitcoin which will eventually increase its value again.

When it comes to Bitcoin profitability, there is a strong capacity for mining. Mining system of Bitcoin is the core of its functioning, but there are estimates that mining potential will decrease once there are around 21 million of BTC. With that in perspective, there is a chance for a drop of Bitcoin's profitability. By now, there's already plenty of suggestions mostly based on a plan that if it happens, transaction fees will be included, in order to miners maintain profit, since they are the foundation of the network. Some predictions say there is enough capacity of the network to become stable in case of this development.

People even started considering Bitcoin as a safe asset. When it comes to safe assets, it's all based on the information. It is a way to make a transaction while both parties have the same amount of data about its value. Besides that, BTC has a great capacity to store value, which is also essential for its development. Considering Bitcoin as a safe asset does good in more than one way.

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The protocol that lays the foundation of bitcoin is flawless - A highly decentralized system that doesn't show any chance of breakdown. This is the main factor that ensures the reliability of bitcoin. https://www.epixelmlmsoftware.com/blog/bitcoin-beginners-guide explains it in detail.

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