This article was written in 2018 but its use value remains the same now and in the future
How did Bitcoin increase in price 10 million times? Many people were surprised when Bitcoin increased in price by 1400% in 2017 and thought that Bitcoin could no longer increase in price so rapidly, but instead Bitcoin would decrease in price?
But what about before:
In 2013, Bitcoin price increased by a record 5,488%
In 2010, the price increased by a record 20,566% (from $0.0015 to $0.31).
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How did Bitcoin increase in price to a record high according to base 10 logarithm?
What are the 7 reasons why Bitcoin always increases in price to record highs in the long term?
What is the surest and safest long-term Bitcoin investment strategy?
How did Bitcoin increase in price according to logarithm base 10?
When looking at charts like the above, we have the feeling that Bitcoin is increasing rapidly in price without any increase rules.
However, when building a Bitcoin price chart on the base 10 Logarithm chart, we can see that Bitcoin price has a general and long-term trend of increasing linearly according to the base 10 logarithm with a strong correlation coefficient quite high of over 80%. Along with that, the difficulty of mining Bitcoin is increasing day by day as shown below:
Based on the trend of the chart above, we can see that Bitcoin can completely increase in price to reach $1 million within the years 2022-2025. So what is the reason why Bitcoin always increases in price in the long term to reach the $1 million price mark in the future
What are the 7 reasons why Bitcoin always increases in price in the long term?
The reasons will be presented in random order as follows
1. Bitcoin does not have inflation but deflation
The maximum total supply of Bitcoin is only 21,000,000 BTC. Currently, only 17,266,775 BTC have been mined. However, Jameson Lopp, former chief engineer at BitGo and engineer at CasaHODL, reported statistics that about 4 million BTC disappeared (due to users losing Private Keys) and 2 million BTC were stolen. .
And that Bitcoin is still tied to more than 7 billion people. This means that on average each person owns 0.003 Bitcoin. However, due to the uneven distribution of wealth in the world, most people can only own 0.001 Bitcoin and according to calculations, 0.01 Bitcoin is enough for people to live their whole life if Bitcoin becomes 100% popular. %. In fact, according to current statistics, the number of people who know and own Bitcoin is only 0.1% in the world. Potential, opportunities as well as challenges are still huge
While fiat money according to optimal inflation statistics for economic development is below 10%. In fact, some years it is less than 10%, some years it is over 10%, and sometimes it is even over 100% depending on the country and time. So if we take 10% as the average annual inflation index of a country is 10% in a 10-year period. So after 10 years, the value of Fiat money has lost half of its value. This is also very consistent with current real estate statistics: every 10 years, on average, a real estate doubles in value once.
The sheer volume of fiat money printing explains why Bitcoin has a major advantage over fiat currencies. The total number of bitcoins is fixed at 21 million, so in the long run, Bitcoin will have no inflation once mining is complete. This means that in the future people can save money with Bitcoin and not have to worry about losing value from printing money. See also: How does US Dollar and Euro inflation affect Bitcoin price?
Below is the situation where Bitcoin trading volume increased in Venezuela after the country suffered severe inflation and people there lost faith in fiat money (https://coin.dance/volume/localbitcoins )
2. The difficulty and cost of mining 1 Bitcoin are increasing
Bitcoin Halving No. 1: From January 3, 2009 to November 28, 2012, 10,500,000 BTC were created, meaning on average 50 BTC were mined every 10 minutes
Bitcoin Halving No. 2: From November 28, 2012 to July 9, 2016, 5,250,000 BTC were created, meaning on average 25 BTC were mined every 10 minutes
Bitcoin Halving No. 3: From July 9, 2016 to mid-2020, 2,625,000 BTC will be created, meaning on average 12.5 BTC will be mined every 10 minutes
Bitcoin Halving number 4: And from 2020 to 2024, there will be 1,312,500 BTC created, meaning on average only 6.25 BTC will be mined every 10 minutes
…
Bitcoin Halving No. 64: No more Bitcoins will be mined
See more articles What is Bitcoin Halving? How Does the Bitcoin Halving Event Affect Bitcoin Price?
Thus, the difficulty of mining a Bitcoin is increasing and requires a lot of costs. Thus, something that becomes more and more difficult and expensive to mine becomes more valuable in the long term. The increasing cost and difficulty of mining Coins is one of the 7 reasons why Bitcoin always increases in price in the long term.
I know how difficult it is to mine coins in 2018, but there is a number that doesn't lie
That is the Bitcoin Hash Rate that is continuously increasing despite all the surrounding market Fud as shown below:
There was even a day when the Hash rate of Bitcoin pump was 61.8 EH/s. Increased 35% in just 2 days
In addition, the appearance of new large Pools is Poolin and DPOOL in the image below. Bitcoin miners are becoming more decentralized over time
Lesson :
When you're not digging, there's always someone else digging for you.
There are good people and there are better people
3. Bitcoin evolves on its own without a leader (no leader)
Charles Hoskinon, the leader of Cardano (ADA) gave his thoughts on Bitcoin on Twitter as follows:
On Twitter, he said anyone who evaluates Bitcoin without thinking Bitcoin is A-rated is a bit irrational in their thinking. Nearly ten years, Bitcoin created wealth for everyone, creating innovation, tremendous growth:
Bitcoin has proven resilient and resistant to all attacks and Bitcoin's infrastructure is worth billions
Bitcoin can achieve all this without a leader.
Bitcoin is the leading standard of digital currency.
In fact, we can see that, except Bitcoin, other Altcoins all have leaders, so what if that leader has an accident or sudden death, for some reason? Surely that Altcoin will seriously decrease in value and even completely disappear from the market.
There has been a very typical example in recent times, two co-founders of Coin Centra (CTR) were arrested before boarding a plane to leave the United States and now this coin has disappeared from the market. Binance has also delisted Coin CTR on their exchange
Meanwhile, how has Bitcoin become ownerless and leaderless?
Bitcoin stub is an open source software run by Satoshi Nakamoto. Nakamoto left this position in 2010. The Bitcoin development community gradually lost all contact with Satoshi since mid-2010. To this day, the exact identity of Satoshi Nakamoto remains unknown.
Maybe Satoshi Nakamoto is no longer on earth, no one knows this, but one thing is certain, whether Satoshi Nakamoto still exists or not, Bitcoin will still develop on its own.
What is Bitcoin software evolution like without a leader?
Bitcoin software is released as open source, meaning anyone can view the source code and change it. When there is a new feature to include in Bitcoin, the software developer will issue a BIP (Bitcoin Improvement Proposals), including a pull request on Github. Users will vote on which features they agree with by downloading the version of Bitcoin that contains them.
Even if Satoshi proposed a change that users did not want, they would not choose to download and run it.
Can big businesses take control? The answer is NO! The failure of the New York Agreement on SegWit2x is the clearest proof that new technological changes to the network cannot rely solely on the consensus of a small group of minority mining organizations and associations, but must almost all (For example, the new technology Segwit successfully integrated into Bitcoin was approved by 100% of Miners in August 2017)
Bitcoin, like other open source projects, is a kind of leaderless democracy – a new way to govern people's online behavior. Each computer is a vote, and anyone can make new laws.
Because Bitcoin is a piece of software that evolves on its own without a leader, it is difficult for other cryptocurrencies to compete with it.
The reason why no Altcoin has been found that can replace Bitcoin's number one position?
Basically, every Altcoin coin that is born has a father and leader. If the leader dies, the child will die as well before being able to walk on its own
But Bitcoin was orphaned early in life. Experiencing 51% attacks, having its infrastructure hacked when the source code was still unstable,... and luckily after many stumbles it still survived to become a warrior. A king. It goes up in the middle of the mountains and forests
Perhaps the only motivation to kill Bitcoin is the global Internet collapse
This means that Bitcoin will continue to be the reserve currency of the Internet thanks to the Lindy Effect. This is the concept that the expected “lifetime” of a non-consumable (a type of technology or idea) is proportional to its current lifespan, so the longer it has been around, the better the opportunity. its future existence is greater.
Bitcoin is the first and most "experienced" electronic currency. It has the highest network hash rate. It has been declared "dead" more than 300 times, but still stubbornly clings to it. It has operated non-stop 99.99% of the time since its inception in 2008-2009 – making it the perfect choice for investors to store their assets in.
Here is a quote from Ammous:
In most cases, when you put a 1-year-old child in the woods, it will die. But if it survives, then you have yourself a true warrior. It will be very powerful. No one will be able to stop it. Now you wouldn't be able to take another 20 year old kid into the woods to live for a few weeks and then tell him to go beat the other kid. It doesn't work like that.
4. Bitcoin has fast and cheap transaction costs compared to fiat money
Electronic money, especially Bitcoin, is the first currency to apply Blockchain technology, helping many individuals and businesses cut costs and make payments easily.
Evidence is evident in the fact that a wallet just transferred 48,500,188 BTC while only paying 675 satoshi in fees, worth $0.04 at the time of the transaction.
That's $300 million for just $0.04 in fees
The people in the above transaction were able to transfer nearly 300 million USD in just a few minutes through Blockchain clearance and only spent $0.04 (4 cents) in fees. Compared to traditional money transfer methods, it is easy to see that Bitcoin's method is both faster and requires less cost and procedure time.
Back in April, a Litecoin user transferred $99 million in LTC coins. This transaction also only costs $0.40 and takes 2.5 minutes to complete the payment.
Although Bitcoin is not the cryptocurrency with the cheapest transaction costs, if people transfer hundreds of millions of dollars based on safety and reputation criteria, it can only be large coins like Bitcoin and Ethereum. , Litecoin, Dash, Monero,…
There have also been times when Bitcoin had high transaction costs in the past, but thanks to technological improvements such as Segwit, Batching Transactions, Lightning Network, etc., Bitcoin is having cheaper and more efficient transaction costs. than
A little comparison:
Visa: 24,000 tx (transactions)/second: fiat currency
Bitcoin: 7 tx/sec: transfer of large transaction assets (real estate, lamborghini,…..)
Bitcoin + Segwit + Batching Transactions: 14 tx/second: super large transaction asset transfer (hundreds of millions of dollars in fees for only about $0.4)
Bitcoin + Lightning Network: 3.5 million tx/sec, near-zero transaction fees, instant speed for daily payments (coffee, vegetables, etc.)
5. Bitcoin has almost absolute security and safety
In theory, Bitcoin or other cryptocurrencies can still be hacked like 51% attacks or other attacks.
The rule for a Hacker to attack is that the profit must be greater than the investment cost. In addition, Hackers need to calculate how much the Coin price will decrease after attacking the amount of money collected before liquidating all that money.
When it was first born, Bitcoin, like other small coins, suffered attacks on Bitcoin's infrastructure with very low investment costs and Bitcoin also suffered a decline in value due to attacks. that attack in the past
However, with Bitcoin today it is different, Bitcoin as the largest cryptocurrency with a continuously increasing Hash Rate, the largest number of Nodes and the strongest world community today. Experts believe that Bitcoin can never be affected by a 51% attack. These are the statistics of https://www.crypto51.app/, a website used to track the cost of 51% attacks on POW coins within a time range of 1 hour.
This result shows that to carry out a 51% attack on Bitcoin would cost about 668,353 USD/1 hour. However, NiceHash can only provide 1% of the hashing power needed to attack Bitcoin.
Or another cryptocurrency, Ethereum, costs about 415,000 USD/1 hour, and NiceHash only provides 2% of the total necessary hashing power.
Another thing worth noting is that 1 hour for such an attack is not really enough to make a profit, it will have to last much longer. But the reality is that these attacks cannot last too long because the community will immediately detect it to stop it or the price of the coin will drop to the point where this attack will not be profitable. again.
Forbes estimates that the computing power of the bitcoin network is currently 100,000 times larger than the world's 500 fastest supercomputers combined. The total electrical energy used for the bitcoin network a year is about 31,000 billion Wh - larger than the electricity consumption of many countries around the world.
That's why carrying out a 51% attack on cryptocurrencies with large communities such as Bitcoin, ETH, etc. is extremely unlikely, if not impossible.
It is very difficult to sabotage Bitcoin or other large cryptocurrencies with thousands of extremely powerful nodes - computers attached to the blockchain.
But smaller cryptocurrencies like MonaCoin, Litecoin Cash,… are more than capable of 51% attacks and are easy. At least 4 coins have been attacked in the past 2 months, including XVG (twice), Electroneum, BitcoinGold and Monacoin.
Conclusion: Bitcoin, after its early days, was also easily attacked, but with the power of the large Bitcoin community today, hacking or attacking the Bitcoin network is extremely unlikely, if not impossible. impossible.
6. The true value of Bitcoin and positive information about Bitcoin increase
Since the birth of Bitcoin until now, there have always been two views after buying BTC:
The group believes in BTC in the long term: This group, whether the market goes up or down, always stores Bitcoin like gold in the house
The group does not trust BTC in the long term: this is usually a speculative group
After excluding the speculative group i.e. the group that does not trust BTC in the long term, the true value of 1 Bitcoin can be calculated based on the price that most people in the group that trust BTC long term accept to buy and sell
In 2010 when Bitcoin increased from $0.08 to $1. People called Bitcoin a bubble and in fact Bitcoin also had a decline after that, people said buying Bitcoin for $0.08 was cheap.
In 2016, when I learned about Bitcoin, people said that $200 Bitcoin was cheap. In mid-2017 people said that $1000 Bitcoin was cheap and could buy a lot. Nowadays, at the end of 2018, people say that $3,000 Bitcoin is cheap and can be bought a lot
And later when your children and grandchildren ask you at what price Bitcoin is cheap, maybe in the future you will tell your children and grandchildren $100,000 Bitcoin is cheap.
In addition, we can see a very clear trend that positive information about Bitcoin is tending to increase while negative information about Bitcoin is tending to decrease.
I still remember around 2016 when I was researching Bitcoin, most of the mass media both in the world and in the country gave negative information about Bitcoin accounting for over 80% as shown in the example below.
But until 2017 arrived, although there was still a lot of negative information about Bitcoin, the amount of negative information had decreased a lot, replaced by 80% of positive information and gradually people are accepting it. Gradually receive the presence of Bitcoin
So we have seen a very clear trend, 1 is the trend of the so-called "cheap price" of Bitcoin that people accept to buy has an increasing trend, 2 is the trend of positive information that is likely to increase pressure. reverse negative information about Bitcoin
7. Bitcoin has a Viral element (spreading like a virus invading the world)
Before going deeper into this cause, I will explain to you why companies want to list on the stock exchange. 40 million lessons that I learned from millionaire financial experts:
The story is about a man named William, who lives in a country where there are no donkeys
Once when he went to another country, he discovered a DONKEY here and immediately thought of a business problem. He spent $1,000 to buy 10 DONKEYS along with the expected shipping costs after bringing them back. My country will sell those DONKEYS for $5,000 because simply in his country, no one has ever seen a DONKEY, a rare animal.
However, unfortunately on the way, those donkeys couldn't bear it anymore and fell down dead
All the money this man lost on this deal
After a night of thinking, he thought of a more perfect way. William immediately set up an exhibition about the DONKEY. Those who want to see the DONKEY first will have to pay a ticket price of 20 dollars for one visit. Come see a dead donkey that is unique and strange in this country.
Tens of thousands of people flocked to see the first donkey to buy a ticket from this person
As a result, William's return was 100,000 times more than his original business plan.
So that is the nature of the stock market that makes many ambitious companies want to enter the market and go public
That great power of the stock market has helped many companies gain strong leverage from a company that is only worth millions of dollars and can earn billions of dollars just after IPO.
And Bitcoin also has a similar viral factor and is even stronger than the stock market because it involves many of the following reasons:
Bitcoin is the first electronic currency to apply Blockchain technology
Bitcoin has the largest community today
Bitcoin is the only currency that is ownerless, without a leader
Bitcoin is a piece of software that evolves on its own
Bitcoin has the highest value among currencies
Bitcoin units are already more expensive than gold
…..
How did Bitcoin spread and penetrate everyone's thoughts?
What the hell is Bitcoin that friends, colleagues, TV, newspapers, etc. often talk about?
Last year mentioned again this year?
Let's try to find out what the hell it is?
Let's try buying some to see if it's a scam. Why are so many people so stupid?
How can they buy a house with Bitcoin?
Bitcoin is a scam, why does it still exist until now?
WTF, Bitcoin is 600 dollars, why is it already 5 thousand dollars?
We have to find out what Bitcoin is that can it trick others?
……
Below is an example of a person with high resistance but still infected with the virus
And the result is that you know. How Bitcoin is taking over the world
What is the surest and safest long-term Bitcoin investment strategy?
The strategy I propose will apply to all subjects in the field of cryptocurrency investment such as:
Investors surf but are continuously losing money
Investors have a deep understanding of Bitcoin but do not have time to research and invest more in Altcoins
Long-term investor but does not have the surest and safest investment strategy
Investors do not know Technical Analysis
….
And below is the investment strategy that I sincerely recommend to you:
1. Whether you are a businessman, a salaried employee, or have positive cash flow from other investment channels. My advice is that you should spend 10% of your monthly income to gradually buy Bitcoin and store it like gold.
Reason:
You already have the 7 reasons Bitcoin will always increase in price in the long term that I have presented above
No one can answer exactly where the bottom of Bitcoin is so you wait for the bottom price to buy and store Bitcoin
Deducting 10% of your income will ensure you are not psychologically affected when the market goes up or down in the short term because even if you lose it, it won't have too much of an impact on your life and you still keep your opportunity.
You have time to do business or invest in other fields
Instead of thinking "how to earn a lot of dollars from Bitcoin", dedicating 10% of your monthly income to store Bitcoin will help you change your thinking to "how to store as much Bitcoin as possible", you will earn more. Sleep well, don't care if Bitcoin has bottomed or not.
2. My advice number 2 is the same as the advice of the "father" of Litecoin, Mr. Charlie Lee on July 17 announced to all his followers on Twitter: everyone should own at least 1 Bitcoin (BTC) before considering long-term investments with other Altcoins, even with his Litecoin.
There will only be a maximum of 21 million Bitcoin units that can exist. That number is not even enough for every millionaire in the world to own 1 coin. Therefore, before you buy any other coin (including LTC), try to own a full 1 BTC first. Once you have 1 BTC, you are free to buy all the shitcoins you want!
Owning a small Altcoin is much riskier. Storing Bitcoin is a surefire investment. Put your money on something solid first.
Wishing you all own a certain amount of Bitcoin until Bitcoin reaches $1 million
Article source: https://trungvanhoang.com/ly-do-bitcoin-tang-gia-btc-logarith/
