Bitcoin & HODL – What Game of Thrones has to do with Bitcoin
Although Satoshi Nakamoto in his 2008 White Paper does not say a word that 21,000,000 Bitcoin will be the maximum, this limitation is one of the most important characteristics of the mother of all cryptocurrencies. Without limitation, the winged word of digital gold would not exist. And without limitation, the HODL culture lacked its foundation.
Are 21,000,000 BTC the limit?
However, what Nakamoto's significant publication finds is a mathematical equation that reflects the deflationary nature of Bitcoin. The pay for finding a new block (= mining) is halved every 210,000 blocks. There is a smallest divisible unit of Bitcoin. It's called Satoshi and is equivalent to a hundred-millionth bitcoin. The first 210,000 blocks rewarded the miners with 50 BTC each. The next 210,000 blocks brought in only 25 BTC. Currently the reward is 12.5 BTC. Thus, the nominal yield in BTC decreases according to the law 50/2 ^ n + 1, where n equals the number of blocks divided by 210,000. If n is therefore correspondingly large (more precisely n = 34), the wage will be smaller than a satoshi at a certain point. The result: The last Satoshi will be gemint.
Delphi Digital and the UXTO
Mathematics does not just allow you to calculate how many BTC there will be in total. It also allows the New York blockchain analysis company Delphi Digital to make a statement about the extent of the HODL culture. Above all, a value plays a major role: The so-called Unspent Transaction Output, short UXTO. If this value was important in the past for sending BTC, it is now buried in the depths of each wallet's program code.
The end user does not have to worry about it anymore. Very briefly, one could say that the UXTO is the "place" where the amount of BTC that has not yet been issued by an owner is stored. Delphi Digital uses this parameter and provides it with significance levels, for example, "1 year +". This includes all not yet issued BTC, which has not moved anyone for at least a year.
Development indicator "1-year +" – UXTO
The "1-year +" – UXTO is also proposed as an indicator of the low point of the Bitcoin price. This value falls in the declining bear market, however, it rises in the rising bull market. If you look at the recent story of the first major hype in 2013 and the subsequent bear market, the situation is as follows, according to Delphi Digital: When the "1-year +" – UXTO climbed above the 50 percent hurdle, things oscillated a short time later, the BTC price at its minimum. From there it went steeply upwards. Since April 2018, this important parameter has risen again and in December 2018 exceeded the 50 percent mark again for the first time. Shortly afterwards, the BTC price plunged to a low of $ 3,250 and since then we have seen it rise again. The sellers ran out of air, in short.
Meaning of the "5 years +" – UXTO
By contrast, the "5-year +" UXTO has been rising since 2014 and is currently at its absolute high of 20 percent, according to Delphi Digital. Explanations of this range from prophets who have always known about the potential of Bitcoin, about lost private keys to the alleged death of Nakamoto and thus the disappearance of his wallet, which is 4.6 percent of all BTC. The fact that these frozen BTC music are in the ears of every HODLER requires no further explanation if the amount of available BTC were even more limited.
You may want to complain a lot about technical analysis of charts and the often-vaunted ultimate right time to invest. But Delphi Digital has fewer charts, rather than analyzing the HODL measure. Thus, a statistical analysis joins the flood of positive future prospects, started with the farmer rule "A mountain follows each valley" on the technical development of the "Blockchain highways" up to the major institutional investors. Well then, dear community: HODL!
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