The amount of bitcoin is limited. Of the 21 million bitcoins that can be mined, 18.9 million are already in circulation. This Monday marked the day that 90% of all bitcoin is mined.
scarcity
Satoshi Nakamoto, the creator of bitcoin, has ensured that there is a maximum amount of bitcoin. The scarcity that this creates is very important for bitcoin as an investment and means of payment. Because no extra bitcoin can be made, unlike dollars and euros, it is for many a good investment against inflation.
Via a chart from blockchain.com shows how many bitcoins are in circulation. As of today, the limit of 18.9 million bitcoin has been reached; 90% of the maximum amount. This all has to do with the miners. Although this number took about 12 years to be mined, it will take until 2140 to really mine all bitcoins. This is written in the code of the bitcoin blockchain. According to this code, a new block may only be added every ten minutes.
Mining
This is all preconceived by Nakamoto. Bitcoin has to gemined turn into. Every four years there is a bitcoin halving place, which means that the reward for mining bitcoin decreases by half. The miners receive less bitcoin every four years for the same work. When the first miners started, they got 50 BTC for every block they mined. Now, three halvings later, they are still getting 6.25 BTC per block. By 2024, this reward will drop to 3,125 BTC.
Because the miners earn less, it does not pay to mine as much as before the halving. They get half as much. When the price of bitcoin rises, miners regain motivation to continue mining. Historically, the price of bitcoin rises after each halving. This in turn ensures that people start mining bitcoin.
So it’s good news that most of bitcoin is in circulation. It is becoming more difficult to mine bitcoins, while the supply is growing towards its maximum capacity. This creates more scarcity.
Lost bitcoin
Despite it appearing that 90% of all bitcoin is in circulation, there are many people who no longer have access to their bitcoin. This happens when they lose their password or wallet. These messages come up often enough in the news. This creates even more scarcity; which is what makes bitcoin valuable.
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