What is the content of the Bitcoin ledger (What will happen if the Bitcoin ledger becomes longer and longer)?

08/18/2023 03:59 • Metaverse Matters • 107 views

The content of the Bitcoin ledger, what does it contain? In traditional law, accountants must have a separate chapter for each record. Therefore, when an asset is marked as a certain digital currency, this rule should apply. The purpose of the Bitcoin ledger is to enable these transactions to be processed effectively and to prove that the asset is indeed verifiable (because its quantity will increase). Therefore, for those who want to understand cryptocurrency, it is very important to view and save their data through Bitcoin accounts and make correct decisions.

What will happen if the Bitcoin ledger becomes longer and longer?

In the past few years, people have started paying attention to Bitcoin. However, as time goes by, these issues have become more complex and difficult to solve. All of this is related to what happened in December 2017. At that time, due to factors of market uncertainty (including price, mining machines, energy costs, etc.), the value of many digital assets dropped significantly. During the bull market period from the end of 2017 to 2018, this volatility did not improve, but it did indeed have some impact on the entire industry: “We have seen many investors make huge profits, but they do not want to get into trouble themselves.” Nevertheless, “for Bitcoin, it has now become a very interesting opportunity,” but in the next year or two, “it may no longer be a gamble” and this situation may continue. When the price of a new token soars and reaches a new historical high, its scope of use will shrink. Will this number expand further? “I think the Bitcoin ledger is getting longer… just like anything else,” one Twitter user wrote. “If a token can really maintain its life cycle for more than 5 years, he may continue to hold his Bitcoin or Ethereum. And once you exchange all of your Bitcoin for other currencies, you don’t have to worry about losing your money.” Of course, there is another possibility that can be realized: if you want to sell your cryptocurrency or buy Bitcoin, you need to consider whether you can pay interest with Bitcoin. In fact, for a token to maintain vitality and still have tradability and liquidity, it must bear high investment fees. However, for ordinary people, they can still achieve similar returns even in the current bear market because most people are waiting for the next halving event and will not invest in any assets anymore. As a famous Bitcoin believer said:

“If you cannot withstand the negative impact of an economic crisis, you should sell all your Bitcoin.” This is a painful thing, especially for those who try to make huge losses by dumping Bitcoin-for example, those users who were trapped in early 2019. Therefore, their losses are far lower than the total loss of about 300 million US dollars after the crash that year. The same situation will also lead people to buy a large amount of Bitcoin again instead of converting it back into legal currency. In fact, this is just a reflection of another risk preference as Bitcoin itself is a speculative asset class. Although many people think it is a huge bubble, it is not. The reason why Bitcoin set a new historical high at the end of 2020 is because it created a considerable amount of value and accumulated wealth, and it has also been tested for a long time. According to data from Glassnode, currently about 70% of the new issuance is generated by exchanges, and at the end of the first quarter of 2021, this ratio reached 75%, an increase of more than 20% per quarter. Most of the new production in 2020 came from retail investors who were actively hoarding BTC.

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