Since its inception, Bitcoin has been limited to a total of 21 million. But before and after the New Year, a message that Bitcoin may be issued has triggered a big discussion on the currency circle and the mining circle. Although this may be caused by the spur of the moment, but such rumors are not unfounded, we need to think about it, if Bitcoin really increases, what will happen to mining?

    We all know that Bitcoin's network congestion problem is a commonplace. With the help of the Segregation Witness and Lightning Network, the 1M block capacity is enough to continue the current development process, and step by step will bring Bitcoin into more scenarios. Of course, the high fees for certain scenarios are still not reduced.

    However, if bitcoin is halved again in 2020, mining incentives will be reduced. According to the previous calculations, bitcoin prices will hit new highs, and the majority of miners who maintain bitcoin security once again weigh the costs and benefits to decide whether to go. stay. After the price increases, the handling fee will continue to increase, and the number of unconfirmed transactions on the entire Bitcoin network will increase.

    However, if you stop halving and increase the total amount, you will enter another causal logic. The total amount of bitcoin is issued. In the current bitcoin network, the additional issuance will bring the price down, and the original block reward amount is in the bit. The miners’ income will not rule out the possibility of a decrease in the price of the coin. In addition, after the total amount increases, the number of transactions will increase, and it is necessary to increase the block capacity again to maintain a stable ratio. It is not excluded that it will fall into a cycle that requires constant issuance. This assumption will push Bitcoin into a trap.

Will the loss of value support be separated from the miners?

    In this decade, Bitcoin's greatest spiritual support to believers is not to issue and decentralize. Among them, no increase is the bottom line for Bitcoin to sit firmly in the cryptocurrency. If bitcoin is issued, the bitcoin's god will face the risk of falling. Although the superiority of the POW mechanism guarantees the safe decentralization, for the formation of consensus, once bitcoin falls to the throne, the competition of other cryptocurrencies will become An invisible bomb around Bitcoin.

    In the face of the most important role, the miners, there will be a harsher choice of beliefs and benefits. In the process of falling bitcoin prices, the miners have already experienced large-scale escapes. Among them, most of them insist that bitcoin will hit a new high in the process of halving. After the issuance, this belief will be directly destroyed. If the price of Bitcoin does not rise and fall, the miners will once again flee.

    The economic model of Bitcoin is an obvious deflation model. In addition, the mining mechanism and bitcoin network of POW can be said to be a deflation model that uses hardware to limit the unstable factors in the market.

    In the traditional currency system, mature economies also tend to be deflated. In the world of cryptocurrency, because it is directly connected to the secondary market, the biggest deflation is reflected in the total amount and liquidity, and the market volatility is seriously affected by the cryptocurrencies in the early stage of the industry.

    It is very straightforward to infer that the issuance will cause the currency to depreciate; conversely, shrinking the money supply or deflation (the cryptocurrency is a decrease in liquidity) will cause the currency to appreciate. Secondly, the total market value and application volume (productivity in traditional monetary theory) increase, and the local currency will also appreciate, and vice versa.

    Looking at the demand for digital money in the industry, the first is that individuals and businesses need digital currency for normal trading activities. This demand directly determines the total market value and application volume. The second is the need to hold (similar to savings) digital currency for a long time. This demand affects supply and liquidity. Finally, there is speculative demand, which is already evident in the secondary market for digital currencies.

    So, let's look back at bitcoin. From the perspective of demand, the low market of Bitcoin has made it difficult for the above-mentioned demand to support huge transaction, investment and application requirements. Then, in addition to the desperate HODL, the core of supporting Bitcoin is value belief, and the bottom line of value belief is the constant value of constant deflation. This is a kind of “delayed satisfaction” for capital and a concept of “expectation” of money. Once the issuance, the concept is disintegrated. So, let everyone worry that "if Bitcoin is issued" there will be no "if" possible.

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