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Since the turn of the year, the Bitcoin share price has already undergone some considerable price fluctuations - central banks and governments have also increasingly spoken out about the new technology since then.

Hardly a day goes by when somewhere in the world a government expresses itself to Bitcoin, Blockchain & Co. Sometimes they threaten to ban digital currencies, sometimes they present regulatory solutions and sometimes they want to work on possible integrations of blockchain technology.

Obviously, governments are gradually coming under pressure in some way to respond to the trend of the new Bitcoin & Blockchain technology.

Bitcoin formula is in no hurry

An important factor that nobody can deny at the moment is the progress in the Bitcoin formula ecosystem. Almost every day brings forth a new Bitcoin formula innovation or a new startup that is expected to attract the interest of those interested in Blockchain with great promises.

In view of the independence of the blockchain industry, some participants seem to underestimate the supposedly low interest of governments. At the same time, a system with the idea of a self-sufficient and self-sustaining community is forming. However, this philosophy seems to worry some governments and they are also trying to secure their place in the community.

How they try to get the desired attention is another issue. However, the examples of the United Arab Emirates (UAE) and Nigeria show that governments are coming under pressure and desperately trying to catch up.

The Bitcoin Prize is crucial

Crypto Consultant Chairman Jason Cassidy sees the Bitcoin course as the most important indicator of government interest.


"The price of Bitcoin and other digital currencies always attracts the interest of governments. In times of high volatility and price jumps, Bitcoin and Blockchain will always get on the radar of officials".

According to Cassidy, governments have slowly understood that we are on a very fast path to digital change - and that includes money. Bitcoin and Blockchain have become explosive issues

Bitcoin and Blockchain have become hot topics in recent years and the pressure on governments to adopt an attitude has become greater. The enforcement of the National Electronic Fraud Forum (NeFF) by the central bank in Nigeria has already shown us that governments have understood that technology is there and that it is impossible to imagine life without it.

In spite of the different reactions from governments around the world, one thing is unstoppable: The technology itself. It is moving - and it is moving very fast.

Since the number of Bitcoin is fixed, Bitcoin is a deflationary currency. Deflation means that the purchasing power of the individual monetary unit increases over time. The inflation rate in Bitcoin continues to decrease due to the decreasing coinbase. Initially, Bitcoin had high inflation because there was little Bitcoin in the ecosystem and with each new block 50 BTC were added.

There are now over 17 million Bitcoin and 12.5 BTC are added per block. Thus the inflation rate is below four percent per year. You can determine the annual inflation rate yourself. The formula is as follows: Annual inflation = (current coinbase reward x 6 x 24 x 365) / current money supply

Since the money supply increases slightly with each new block, this is not an exact inflation rate. But it's a good clue.

This Bitcoin secret is the two most common perspectives:

According to the British economist John Maynard Keynes deflation is bad for the Bitcoin secret. Read more on: The increasing purchasing power of monetary units encourages people and entrepreneurs to save money instead of consuming and investing.

According to the Austrian economist Ludwig von Mises, deflation is good for an economy because people cannot put off consumption forever. Furthermore, the supporters of the Austrian School are reining in the fact that deflation occurs in all stages of production and that the profit margins of entrepreneurs are not influenced. Deflation favours the "hoarding" - or saving - of capital and investment in long-term projects.

The Coinbase and the Bitcoin Price

The number of Bitcoins emitted by the Coinbase is not directly related to the purchasing power of a Bitcoin. While 50 BTC were distributed per block in 2009, nothing could be bought back then. With 12.5 BTC at the end of 2017, it looked quite different. So it may well be that the 6.25 BTC in 2020 have a higher purchasing power than the 12.5 BTC today.

The coinbase is primarily intended for liquidity and fair distribution of the monetary unit. While in many ICOs all tokens exist since the first hour and are only distributed, in Bitcoin there is a fair distribution of coins for miners that protect the network.

The maximum amount of money in Bitcoin is a constant. It could only be changed by a generally accepted hard fork.