ViaBTC | Is the BTC Hashrate Decline a Disaster?

*Bitcoin hashrates based in Texas account for 11.22% of the national total(Source: https://ccaf.io/cbeci/mining_map)

I. A fixed total supply

On October 30, 2008, someone named Satoshi Nakamoto published a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System on the Internet, which marks the birth of Bitcoin.

II. The halving mechanism

According to the law of supply and demand, if the circulating supply of a commodity is not restricted, hyperinflation would be very likely, which would drastically reduce its price. To avoid hyperinflation, Bitcoin introduced the halving mechanism at its birth.

III. The mining process

Bitcoin uses the PoW (Proof of Work) consensus mechanism, and mining is a process by which the circulating supply of Bitcoin is increased. In the BTC network, miners play major roles. They validate each new transaction and record them on the blockchain ledger. On average, a new BTC block is mined every 10 minutes, and each block contains all transactions that occurred since the last block was generated, and these transactions are added to the blockchain in the right sequence. Transactions that are contained in blocks and added to the blockchain are called “confirmed” transactions, and the new holder may only spend the Bitcoin he got once the transaction is “confirmed”.

IV. Summary

Bitcoin’s design shows us the brilliance of Satoshi Nakamoto. Right now, there are as many as 15,530 Bitcoin nodes distributed around the world, which not only makes hacking less likely but also keeps the network safe. Even if some of the nodes were shut down due to one reason or another, the BTC network would still be able to run normally, making it much superior to centralized institutions such as banks — After all, the shutdown of banking nodes would lead to the collapse of the entire banking system, and users would not be able to engage in transactions.

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