One of the main characteristics of the Bitcoin currency is its limited supply; there are only 21 million Bitcoins that can be mined in total. But what does 'mined' mean?
For those who don't know yet, Bitcoin is like digital gold in many ways. Like gold, there is a limited 'finite' amount of it, it cannot simply be created arbitrarily; whereas gold must be extracted from the physical earth, Bitcoin must be 'mined' by computer means.
Currently, there is:
These numbers change approximately every 10 minutes when new blocks are created. One wonders then if once the Bitcoin miners have mined all the Bitcoins, what would happen.
Today the reward for mining Bitcoin is 6.25 Bitcoins per Block. By 2024, this will drop to 3.125 BTC per Block. This is due to the reduction in rewards for Bitcoin mining that takes place every four years. This is known as 'halving', the last of which took place in May 2020. It is a process that adapts over time because when Bitcoin was first launched, the reward was 50 Bitcoins. In 2012, it was halved to 25 Bitcoin. In 2016, it was further halved to 12.5 Bitcoin. At the last one on May 11, 2020, the award was halved again to 6.25 Bitcoin.
It is obvious then that once the 21 million have been mined, there will never be any new bitcoins, so the supply will essentially be exhausted. Unless the bitcoin protocol is changed to allow for more supply or to increase supply.
It should also be noted that although Bitcoin has an inventory of 21 million units, this does not mean that all 21 million units are available for purchase.
There is also the question of whether mining will still be profitable once all bitcoin has been mined. By the way, the Bitcoin mining process rewards miners with a piece of Bitcoin after a block has been successfully verified.
As a result, transaction fees will be the miners' only source of income and it is questionable whether these transaction fees will be sufficient to keep the miners financially afloat or they may have an incentive to abandon the system. However, if miners abandon their work, it is highly likely that the network may be forced to move towards centralization or collapse completely.
However, the importance of this limited supply of Bitcoin has never been more evident than today, when many people are beginning to take an interest in it.
A survey conducted by Grayscale in 2019 to get a better idea of the people who are interested and investing in Bitcoins. Conducted by Q8 Research, this survey interviewed: 1100 US investors aged 25-64 years old about Bitcoin.
The survey found that:
Bitcoin gained popularity as its price increased from approximately US$572 in August 2016 to approximately US$4,765 in August 2017. Bitcoin's market capitalization also increased dramatically during this period and reached a level of US$117.8 billion in the first quarter of 2020.
In 2020, more than a third of large institutional investors hold cryptographic assets, and the most popular of these would be Bitcoin according to a recent survey published in June by Fidelity Investments.
According to the survey of 774 companies including financial advisors, family offices, pension funds, traditional and cryptographic hedge funds, high net worth investors, foundations and endowments. :
Up to 36% of institutional investors in the U.S. and Europe own cryptographic assets.
In the U.S., 27% of investors reported holding cryptographic assets, up from 22% a year ago when Fidelity surveyed 441 U.S. companies. In Europe, 45% of the companies surveyed reported holding cryptographic assets.
Bitcoin is the most popular cryptographic asset to own - more than 25% of the companies surveyed reported owning digital currency.
Tom Jessop, president of Fidelity Digital Assets, said in a statement when the survey was released:
'These results confirm a trend we are seeing in the market towards greater interest and acceptance of digital assets as a new class of investable assets.
According to Grayscale, institutional demand for Bitcoin is skyrocketing in the context of the coronavirus crisis, and this demand has remained strong even though the price of Bitcoin has collapsed. One example is MicroStrategy, the world's largest sovereign wealth fund, which now owns 577.6 BTC.
ChartBTC said in a tweet on September 27, 2020:
'The Bitcoin network has exceeded 18,500,000 BTC in circulation. There are less than 2,500,000 left and half of them will be exploited within the next 4 years. #bitcoin'
With only 21 million bitcoin (BTC) to be emitted, just under 2.5 million BTC remain for mining.
The ChartBTC noted that half of the remaining 2.5 million BTC will be mined over the next four years. Since its creation in 2009, the Bitcoin network has already undergone three halving operations.
According to Cointelegraph, a panel of eight experts from Crypto Valley estimated that the latest halving (Bitcoin Halving) was different from the past because today more people are considering storing their savings in Bitcoin.
Although the last Bitcoin is not expected to be mined until 2140, in the meantime, could we hear from Satoshi Nakamoto? Would he dare to change the protocol to meet the demands of the crypto-sphere?
Written by Laetitia Harson, Project Manager
Cartam: Free marketplace for cryptocurrency users
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