Bitcoin is a type of digital currency that can be used online. It was created in 2009 by an individual or group of individuals known as Satoshi Nakamoto. Transactions made using Bitcoin are recorded on a public ledger called the blockchain, which makes them secure and transparent.
Unlike traditional currencies, Bitcoin does not have a central authority such as a bank or government controlling it, making it a decentralized currency. You can buy and sell Bitcoin on various websites called cryptocurrency exchanges, and it can also be used to purchase goods and services.
The value of Bitcoin is determined by supply and demand in the market, and it can be quite volatile. Bitcoin was the first decentralized digital currency and has led to the creation of many other cryptocurrencies. Additionally, the technology behind Bitcoin, blockchain, is being used in various industries beyond just digital currencies.
Why is bitcoin supply limited to 21 million?
Just like gold, Bitcoin is a finite resource, meaning there is only a limited amount of it.
The supply of Bitcoin is limited to 21 million to ensure that it maintains its value over time. If there were an unlimited amount of Bitcoin, the value of each Bitcoin would decrease, making it less valuable. Limiting the supply of Bitcoin helps to keep its value stable.
Once all 21 million Bitcoins have been mined, no more will be created. This is different from regular money, where governments can print more money if they need it.
The process of creating new Bitcoins is called mining, and it is done by solving complex mathematical problems. Miners are rewarded for their work by receiving a certain amount of new Bitcoins.
As the number of Bitcoins in circulation increases, the difficulty of mining also increases, making it harder to mine new Bitcoins.
In summary, the limit of 21 million Bitcoins is in place to protect its value, prevent inflation, and make sure that the process of creating new Bitcoins is fair and controlled.
What will happen when bitcoin reaches its final number?
Once all 21 million Bitcoins have been mined, no more will be created. This means that the only way to obtain Bitcoin will be through buying or trading with someone who already has it. The value of Bitcoin may go up, as there will be a limited supply available, and the demand for it might continue to increase.
Even though the mining of new Bitcoins will stop, the use of Bitcoin will still continue. People will still be able to buy and sell goods and services with it, and it will still be used as a form of digital currency. It’s also worth noting that even though the mining will stop, the transactions on the blockchain will still be processed by the network, and the fees for those transactions will still be paid in Bitcoin.
In short, when Bitcoin reaches its final number, the creation of new Bitcoins will stop but people will still be able to use it for transactions and its value may increase due to limited supply.
How many bitcoins are left?
According to the cutoff in September 2021, there are still around 2.6 million Bitcoins left to be mined. But this number can change over time because the process of mining Bitcoins is still ongoing.
The mining process is like solving puzzles, and when the puzzles are solved, new Bitcoins are created. As more and more Bitcoins are mined, the puzzles become harder to solve. This means that it will take longer to mine the remaining Bitcoins.
We don’t know exactly when the last Bitcoin will be mined, but we do know that when all 21 million Bitcoins have been mined, no more will be created.
How many bitcoins are there in circulation now?
As of September 2021, there are around 18.7 million Bitcoins in circulation. This means that they have been mined and are being used by people for buying and selling things, or being held as an investment.
This number can change over time because new Bitcoins are being mined every day, and some people may also lose their Bitcoins. But it’s important to note that the total number of Bitcoins that can be created is limited to 21 million, so eventually the number of Bitcoins in circulation will reach 21 million.
So 18.7 million Bitcoins are currently being used and in circulation, but there is a limit of 21 million Bitcoins in total.
Why do we think miners will still be incentivised to mine?
Miners are incentivized to mine for several reasons:
Block reward: Miners are rewarded with new Bitcoins for their work of verifying and adding transactions to the blockchain. As the number of Bitcoins in circulation increases, the reward for mining new Bitcoins decreases, but it will still be worth the effort for miners.
Transaction fees: Miners are also paid in transaction fees for each transaction they process. Even though the reward for mining new Bitcoins will decrease, the number of transactions on the blockchain is expected to increase, providing a steady stream of income for miners.
Appreciation of Bitcoin value: If the value of Bitcoin increases, the miners’ reward, whether from block reward or transaction fees, will also increase in value. This appreciation in value makes it worth it for the miners to continue mining.
The technology and infrastructure: Some miners may continue to mine due to investments they made in technology and infrastructure. They will continue to run their mining operations to get a return on their investments.
In summary, Even though the reward for mining new Bitcoins will decrease, miners will still have an incentive to mine due to block rewards, transaction fees, the appreciation of Bitcoin value and their investments in mining technology and infrastructure.
The long term value of bitcoin.
The long term value of Bitcoin is uncertain and can be influenced by various factors such as supply and demand, government regulations, and the level of adoption of the technology. Some experts believe that the value of Bitcoin will continue to increase over time, while others believe it could decrease.
One of the main factors that could affect the long term value of Bitcoin is its adoption by mainstream users and businesses. As more and more people start using Bitcoin, the demand for it will increase, and as a result, its value could also increase.
Another important factor is government regulations. If governments decide to support and regulate the use of Bitcoin, it could increase the level of trust and confidence in the currency, leading to a higher value.
It’s important to note that Bitcoin is a highly volatile currency, meaning its value can change rapidly. It’s a speculative investment and its value can be affected by a lot of factors. It’s important to understand the risks before investing in Bitcoin.
In summary, the long-term value of Bitcoin is uncertain, it depends on the adoption, government regulations and other factors, but it’s a highly volatile currency and it’s important to understand the risks before investing. Takeaway: Bitcoin supply is limited and it has some growth potential.