The Bitcoin Espresso ☕ #10 — EU Crypto Regulations & What happens when all 21 million Bitcoin have been mined?
Welcome to this week’s The Bitcoin Espresso! Whether you’re interested in Bitcoin, have just bought your first fractions of Bitcoin, or want to dive deeper into the space — this newsletter is for you. Find out more about the motivation behind this newsletter in the introduction post. Want more news? Follow @thebitcoinespresso on Twitter to stay on top of things between newsletters. 🎆 You may have noticed that I was on a holiday break last week. I intended to send the week’s newsletter but found that the Bitcoin space seemed to rest as well. Instead of boring you with slow news, I decided to write to you once we see action again. So welcome back and a happy new year everyone! 🎆 Weekly Summary: Bitcoin’s price followed a downtrend since the last newsletter and had a significant move recently. Federal Reserve officials said they might speed up their timeline to raise interest rates and reduce asset purchases to counter high inflation. The news shook the stock markets a bit. Bitcoin followed along since it is seen as an inflation hedge by many. Zoom out of the price chart, take your time before deciding if and how you want to react, and feel free to consult the ‟Having a Plan″ article in The Bitcoin Espresso #2 that provides some guidance if you’re unsure. Today’s news covers a NASDAQ-listed company paying dividends in Bitcoin, upcoming EU cryptocurrency regulations, and Melania Trump tweeting about Bitcoin. This edition’s coffee chat answers what happens when all 21 million Bitcoin have been mined. A quick tip: There’s an explanation of words and abbreviations in the Fundamentals Glossary at the bottom. 📰 Essential News
🛋️Coffee Chat: What happens when all 21 million Bitcoin have been mined?In The Bitcoin Espresso #1, we have discussed the halving event, which reduces the amount of Bitcoin created in regular intervals. Since the supply of Bitcoin is limited to 21 million, this mechanism will eventually lead to all Bitcoin having been mined. While that is estimated to be in the year 2140, the question arises if that means the Bitcoin network will stop working at that point. Bitcoin mining is the processing of transactions in the Bitcoin network by creating digital blocks. There are two mechanisms to incentivize miners for their work. Firstly, they are granted a block reward, earning them newly created Bitcoin. Secondly, they get the transaction fees of the transactions contained in the block. Once all Bitcoin are mined, the block reward is gone, but miners will still receive transaction fees for their continued work. While transaction fees are negligible currently, these fees could become more meaningful with the increasing price of Bitcoin and the number of transactions that can fit into a block. I consider in-depth consideration of this rather academic since it includes predicting how technology evolves over the next 118 years. I would argue that Bitcoin already has a viable mechanism to continue running beyond 2140 and that we have enough time if there is a need to adjust. Nevertheless, if you’re curious about a few possible scenarios, head over to Investopedia’s article on the topic. Did you recently discuss Bitcoin with someone who might like The Bitcoin Espresso? And if you haven’t yet, sign up for The Bitcoin Espresso now! Can’t get enough of reading newsletters? Check out The Sample 💌, which sends you newsletter recommendations based on your interest. 💡 Fundamentals GlossaryCryptocurrency … A digital currency that uses cryptography to prevent counterfeiting and fraudulent transactions. There are other cryptocurrencies besides Bitcoin. Halving Cycle … Roughly every four years, the amount of new Bitcoin created is cut in half. This is called the Bitcoin halving. The time between Bitcoin halvings is referred to as a halving cycle. Fed (Fed) … The Federal Reserve System is the central banking system of the U.S. Stablecoin … A cryptocurrency that aims to maintain the value of a specific asset (often the U.S. dollar). Do you want me to tackle a particular topic? Or do you want to tell me how The Bitcoin Espresso is doing? Give feedback or comment on this post to make this the best newsletter possible. The Bitcoin Espresso does not constitute financial- or investment- advice, nor is it an offer or invitation to purchase any digital assets. You are solely responsible for your own investment decisions. The Bitcoin Espresso is for general purposes of information only and no representation or warranty, either expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, or correctness of this article or opinions contained herein. Some statements contained in this article may be of future expectations that are based on our current views and assumptions and involve uncertainties that could cause actual results, performance, or events that differ from those statements. |
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