At least not in practical terms. Imagine the day wherein we travel to other planets and mine for metals and minerals. We may discover a gold mine within an asteroid, and at that point, the relative scarcity of gold could completely be destroyed. Gold is only scarce because of our current spatial and technical limitations.

Also, if the price of gold were to shoot up overnight due to market forces, it would become profitable to mine more of the gold that is already beneath our feet. Gold miners would add more supply to the market and drive the price back down to levels where it is not as profitable to mine more gold.

Bitcoin is not digital gold

Despite bitcoin’s name of “digital gold” their supply and inflation are nothing alike. Bitcoin has a finite supply of 21 million coins that can never be changed.

Why is bitcoin supply limited to 21 million

Here’s what you need to know: a single bitcoin block is mined approximately every 10 minutes, and the computer that mines the block earns a reward, which is some amount of bitcoin. In 2009, that reward was 50 bitcoin per block (which meant 50 new bitcoins were brought into circulation roughly every 10 minutes). For every 210,000 blocks mined (roughly every four years), that reward is cut by 50%.
The block reward became 25 in 2012, 12.5 in 2016, and 6.25 in 2020. This effectively means that the inflation rate of bitcoin is slowing down and will eventually reach zero.

Bitcoin in 2022

In 2022, the inflation rate of bitcoin is below 2% and decreasing with each passing block. This is below the target inflation for the USD, and below the average inflation rate of the supply of gold (13% in 2021).

The audience includes ordinary users, entrepreneurs, and technological blockchain startups. As with any currency, the value of BTC is determined by the willingness of people to accept it as a means of payment.

So, bitcoin pricing is determined by traditional market mechanisms. It is also necessary to remember that the max bitcoin supply is 21,000,000.

How Many Bitcoins Have Been Mined Already[edit]

In August 2019 there are about 17,800,000 bitcoins in circulation according to the Blockchain.[1] It seems that Bitcoin (BTC) has 85% of its supply already in circulation.

Knowing about the limited number of Bitcoins, miners throw all their resources into production, spend earned money, and use the capabilities of mining organizations to the full extent.

Approximately 3,000 coins are added to the currency network daily.

Why is bitcoin supply limited to 21 millions


If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.”

Satoshi Nakamoto could therefore have chosen this number of 21 million to foresee a possible alignment with fiat currencies. Thus, 0.001 BTC (1 mBTC) could have been worth $1 at term. This prediction became true in 2013. Today, 0.001 BTC is worth much more than that.

A philosophical explanation is put forward by some

Another hypothesis is related to the global money supply at the time Satoshi Nakamoto created Bitcoin.
At that time, the global money supply was $21T.

Why is bitcoin supply limited to 21 millionagents

The second is why did he choose the figure of up to 21 million BTC?

Why is Bitcoin supply hard-capped?

I will start by answering the first question, which seems to be the most obvious.

Satoshi Nakamoto understood that the problem with the current system is the total freedom given to central banks to print as much fiat money out of thin air as they deem necessary.

Thus, a few central bankers have far too much power over all the inhabitants of the earth. We should be able to trust them blindly, but history has shown us that this is impossible, as Satoshi Nakamoto rightly pointed out:

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

Why is bitcoin supply limited to 21 millionb

However, we are not there yet. That is why I repeat that we are still at the beginning of the Bitcoin revolution.

I have been writing daily about Bitcoin for several years now, sharing my ideas, opinions, and some knowledge.

The most rewarding thing is then to be able to have exchanges with newcomers in this world. It is always interesting to listen to what drives these people to come to the world of Bitcoin. Even better, I listen carefully to the questions they may have and try to provide them with answers as best I can.

One question I am often asked is this:

Why Did Satoshi Nakamoto Limit Bitcoin’s Supply to 21 Million?

This is an extremely recent question to which few people generally provide answers.

This question can be divided into two parts.

The first is why Satoshi Nakamoto has limited the supply of Bitcoin.

Unlike gold, no amount of technical innovation or space exploration can increase (or decrease) the supply of bitcoin. Price fluctuations will not result in miners bringing more or less bitcoin into circulation.

Instead, the supply of new bitcoin coming into circulation is decided by an algorithm which is enforced by the miners running the network. This means that the supply of new bitcoin is detached from movements in price.

The Bitcoin supply algorithm

The supply of bitcoin is not regulated by any one individual, entity, or organization.
It is regulated by an algorithm that began in 2009, and will end sometime around the year 2140 when the last bitcoin is mined. The algorithm is actually relatively simple to understand.

Gold has historically been the best hedge against inflation. But there is a new kid on the block. As a nascent asset,Bitcoin(BTC0.65%) has been around for 13 years and has already demonstrated consistent staying power and positive price movement. Having started at an approximate price of ​​$0.003 in 2010, it has risen more than 13 million percent to around $37,000 per bitcoin at the time of writing.

But the price of bitcoin is not what makes it a better inflation hedge than gold.

It is Bitcoin’s adherence to a finite supply of 21 million coins. Similarly, a limited supply has long been surmised as a dominant reason for gold’s status as the world’s store of value, but I argue that Bitcoin has something more to offer.

Image Source: Getty Images.

A truly finite supply

The supply of gold is not truly finite.

Bitcoin, the ultimate inflation hedge

At the end of the day, I’m trusting that the bitcoin supply schedule will remain on track and undisrupted. The only thing that could disrupt it is a globally catastrophic event such as a devastating solar storm or asteroid impact. Otherwise, the bitcoin network and its supply schedule is as resilient as the internet itself.
The supply schedule of bitcoin is based purely on math, whereas gold and the USD are based on humans and the decisions they make. I have a much easier time trusting that the computers running the math will continue to do as they are told.

Currently, users received approximately 85% of the total. Each coin received is solvent. A currency, unlike conventional monetary units, is not backed by gold and debt, but solely by supply and demand.

Professionals note that the ever-increasing value of Bitcoin is based on the number of resources spent that are required to obtain each individual coin.

In some cases, the currency is provided by the price of the goods, which is set by the seller, as well as the price offered by the buyer.

Why is the Number of BTC Coins is Limited[edit]

Limiting the release of Bitcoin does not allow cryptocurrency to depreciate. However, many are interested in where the figure of 21 million coins came from? This limitation is associated with the reward formulas for miners, which are created on the basis of the law of inverse geometric progression.

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