1. QiAi QuestsHome
  2. Daily Digest

What Does the Original Calculating Power Mean (What Do Original Value and Present Value Mean)?

• Daily Digest • 74 views

The original calculating power refers to the measure of the level of activity i

What Does the Original Calculating Power Mean (What Do Original Value and Present Value Mean)?

The original calculating power refers to the measure of the level of activity in a network. It determines the data in the entire network based on calculation results. For example, the proof-of-work consensus mechanism in Bitcoin mining provides a certain amount of information through the proof-of-work (PoW) algorithm, which generates a faster and more efficient network hash rate than the current blockchain. This new consensus algorithm can improve the efficiency of Bitcoin and reduce transaction fees and transfer costs, hence referred to as the original calculating power.

So, what is the original calculating power? Simply put, it is a means to obtain block rewards during the calculation process. It can also be understood as the role of consuming electricity when the price of Bitcoin falls. Without the help of the original computing power, the average energy consumption of the entire Bitcoin network would significantly decrease. However, there is also a method to reduce the difficulty of the entire network, which means that the entire network needs to consume 2 bitHash/s to ensure normal operation.

What Do Original Value and Present Value Mean?

Original value and present value are two opposite concepts. Original value refers to the price of the value of money (including commodities circulating in the market), which is determined by the market and the supply-demand relationship, rather than the expected earnings of the issuer. Present value, on the other hand, refers to the time and risk tolerance of an asset holder when investing in a specific project.

Generally, digital currencies like Bitcoin have volatility within a fixed period. But due to the high volatility and inability to effectively resist inflation issues of cryptocurrencies, they are referred to as “variables.” For example, ETH1 in Ethereum is a variable. However, for BTC, it does not necessarily represent its actual quantity. Since the birth of Bitcoin, there has been no predetermined specific block height or hash function to measure block generation speed. Therefore, we often hear the term “valuation,” which means that if calculated based on different algorithms in the past decade, its current market price is probably over $100,000. However, this statement is not accurate because historical data indicates a total cost of about $20.

Now that we understand the relationship between original value and present value, the meaning of the original value is essentially the same type of thing. Specifically, when the price of Bitcoin reaches a certain level, the original value is equivalent to the present value of Bitcoin. At this time, the corresponding market demand will rise or fall, resulting in new supply and affecting the overall market liquidity. This also implies that the larger the original value, the lower the present value, indicating that the psychological activity of market participants will become smaller, leading to a significant drop in prices. (See Figure 1) Original article sourced from bitcoinist.

This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/daily/24266.html

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 08/15/2023 17:51
Next 08/15/2023 18:13

Related recommendations