CRYPTO CURRENCY QUESTIONS OF THE DAY
Question 1
What do you personally think would happen with Bitcoin(or any other cryptocurrency) when all of it will be mined? Does that mean that that particular cryptocurrency would die out, since there would be no one to validate transactions?
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There are only 21 million Bitcoins available for mining. Once all of those Bitcoins have been mined, no more new Bitcoins will ever be created. (unless they change bitcoin protocol and allow more) At some point in the future, probably 2140 all of them will be mined.
This, however, doesn’t mean that the Bitcoin world will come crashing down. Since besides awards for hashing, the Bitcoin protocol also provides transaction fees.
Currently, these fees amount to only a small amount in comparison to the block reward of 12.5 Bitcoins; however, as Bitcoin rewards go down, the fees will increase/ Eventually, these transaction fees should become valuable enough that miners will be encouraged to keep on mining. So while new Bitcoins will cease to come into existence, Bitcoin miners will still get paid.
Here is Alberto's opinion: BTC will not die at all even when it will be all mined as long as people ask for it. Once BTC is completely mined, demand can even increase more (so no more bitcoins to mine) but demand still high meaning that the current Bitcoins available on the market will increase value.
There will be limited amount of BTC (supply), but unlimited demand.
When all bitcoins are mined. Transaction fees will be the source of income for miners.
Summary: If supply is limited but demand unlimited, price is unlimited then purchasing power for all having BTCs (including miners).
Question 2
** What is the correlation between Bitcoin and altcoins price movements?**
Usually it goes like this:
BTC goes up slowly or sideways => ALT coins grow fast. It happens because hungry traders are not satisfied with a slow BTC growth and start to buy alts.
BTC goes to the moon quickly => ALTS go down or sideways. It happens because people quickly sell off the alts in the fear of missing out the bitcoin profit train.
BTC goes down => ALTS crash and get into heavy drawdowns. The liquidity of alt coins is always poor so any bad news of the market as a whole hit them first and hit them hard. They recover much faster though as well. Like we just saw RIPPLE collapsed 70% then gain 63% back next day!