Bitcoin multiplies with all the forks?
The Ethereum blockchain is based on a decentralized, open source technology called the POW, which requires significant calculation performance to validate transactions. However, this is not the only cryptocurrency that uses this consensus mechanism. Other cryptocurrencies such as Bitcoin Cash (BCH) and Bitcoin Nano (BTNC) are also used.
When you buy or sell bitcoin, you transmit your funds from one title to another. But what happens when a new villa occurs in the Ethereum blockchain? Can existing bitcoin multiply with every fork?
To understand this issue, dive into the basics of cryptocurrency and blockchain technology.
How do cryptocurrencies work
Cryptocurrencies, such as bitcoin and Ethereum, are used in cryptography to control transactions and control the creation of new units. Each block of the blockchain contains a “transaction” or a transaction series that validates each other through complex mathematical calculations (proof of work). In each block, the first transaction is rewarded with newly -free coins.
Forks: What are these?
The fork occurs when a development group creates a new version of the blockchain that differs from the original code. This creates a new version of the cryptocurrency, which is often called “fork”. For example, if you have 100 bitcoins and you decide to switch to Ethereum, your basics will not be handed over automatically. You need to convert bitcoin to ether (ETH), which is a native cryptocurrency of the Ethereum network.
Is existing bitcoin multiplying with all the forks?
Now let’s see that the existing bitcoin multiplies with all the forks of the Ethereum blockchain. Unfortunately, the answer is not.
So it is:
- Cryptographic complexity
: Each new block of Ethereum blockchain requires significant calculation performance to validate transactions. This makes it difficult for users to “mince” or “break” to accumulate a large amount of bitcoin.
- Intelligent contract restrictions : Intelligent contracts are self -contracted, with concrete rules and conditions. They can be used to transfer ownership, create new tools and other operations on the blockchain. However, smart contracts do not automatically increase in value or size with individual forks.
- Dynamics of supply and demand : The number of Bitcoin, which is mined per block, is limited by the difficulty level required to solve the mathematical puzzle (evidence of work). This means that even if new villas occur, existing funds are unlikely to grow exponentially.
Exceptions: Special cases
Although existing bitcoin does not multiply with all the forks of the Ethereum blockchain, there are exceptions:
- Bull market trends : If you bought bitcoin at low prices and then sold it at a higher price due to strong demand, you may experience a significant price increase.
- Initial Coin Supply (ICO) : If new cryptocurrencies are launched, such as ERC-20 tokens or Bep-20 tokens, the total supply is often determined by developers themselves. In these cases, existing funds can multiply when multiple coins are available.
Conclusion
Although the value of bitcoin can increase with each fork of the Ethereum blockchain, it does not follow the simple multiplication model. Instead, factors such as the dynamics of supply and demand, smart contract restrictions and market trends play a significant role in the development of cryptocurrency prices.
As a result, the existing bitcoin is not anxiously multiplying with all forks. However, if you invest in the right cryptocurrencies at the right time, you may experience significant growth opportunities due to bull market trends or other market factors.