Bitcoin is the first cryptocurrency ever issued. The creation of it truthly affected our world by adding new ways of investing and paying for things and goods. Nowadays it’s hard to imagine pop culture and the economy without Bitcoin; the community built around it is very much prominent.
However the cultural impact is not the most important. One of the objectives of Bitcoin was to establish itself as the alternative to the traditional banking system. How? By making Bitcoin a decentralized virtual currency. And one of the causes of this decentralization lies in its features of issue.
In this article we will find out is there a finite amount of bitcoin and what are the reasons.
Is The Number of Bitcoins Finite?
This way the number of bitcoins is fixed and limited. The limit was created to avoid inflation in the currency so the number of coins is finite and nobody could influence the currency. It was made by its creator Satoshi Nakamoto this way to be some kind of a digital gold and mimic the limited amount of the resource. With those conditions, the price of it will drastically go up as the popularity of Bitcoin grows.
Bitcoin was released with a certain special feature: once in a few released blocks the reward in the form of newly released bitcoins is halved. Halving guarantees a constant supply of bitcoins as the processing power grows and allows users to process more data in less time.
Is estimated that in the year 2140 the last bitcoin will be issued. Then, only the transaction fee will be obtained as a reward for the block validation.
The hard limit of Bitcoin is 21 million coins, but more than 19.26 million have already been mined. This way, the majority of coins are already in circulation now.
Only one block — yielding 6.25 Bitcoin as of August 2021 — is created every ten minutes. On average, the blocks created will keep ‘halving’ every four years, until eventually only 0.000000001 Bitcoin are awarded per block ‘mined’ by the year 2140.
But why is Bitcoin finite? This is made to avoid wild price swings that may be triggered by too many coins in circulation.
The Number of Bitcoins Is Finite: Advantages and Disadvantages
Why is bitcoin finiteness affecting the market? The limited number of bitcoins is both advantageous and disadvantageous at the same time. Let’s look closely at what it entails:
Advantages:
- Bitcoin cannot be manipulated as the finite nature of it is what guarantees decentralization of the coin.
- Devaluation is not possible as there is no way to generate an infinite amount of bitcoins.
Disadvantages:
- The price of the coin is not stable as the popularity grows and the amount of coins available is limited.
- The reward for miners will be insignificant in the future.
How Many Bitcoins Are There in Circulation?
There are currently around 19,258,006.25 bitcoins in circulation. This figure increases every 10 minutes, when new blocks are mined. Right now, each new block adds 6.25 bitcoins into circulation.
How Many Bitcoins Are Left to be Mined?
There are less than 1.74 million bitcoins left to be mined. After the maximum amount will be reached, no new bitcoins will be issued. Miners will not be receiving bitcoins as a reward any more, only a transaction fee. It will affect miners by lessening their gains tremendously, but if there will be a lot of transactions and it will serve as a store of value rather than for daily purchases after the limit will be exhausted by 2140 it may still be profitable for miners.
By the way, if you want to use Bitcoin to accept payments from your customers for purchasing goods and services consider choosing a good crypto payment processor for business.
Closing Thoughts
The finite number of bitcoins is what makes it so interesting. In the article we discussed why is there a finite number of bitcoins and how is bitcoin affecting miners by being finite. By mimicking the mining of exhaustible resources of gold, the developer of it, Satoshi Nakamoto, made their creation protected from devaluation.