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You have probably heard or know that the total supply of Bitcoin is 21 million coins and nothing more and nothing less. But is the total supply of Bitcoin in 2140 really enough for 21 million? Let’s find out together.
First, let’s find out the 3 Bitcoin supply-limiting principles established by Satoshi Nakamoto and why it’s 21 million and not 20 or 22.
- The starting reward is 50 Bitcoins when each block is mined.
- The number of rewards for each block will be halved every 210,000 blocks, corresponding to 4 years and infers there will be 6 blocks mined every hour.
- The smallest unit of Bitcoin is 1 Satoshi = 0.00000001 BTC.
With the above 3 data, the same time to mine 1 block is 10 minutes, we have the equation of block reward decreasing over every 210,000 blocks as:
50 + 25 + 12.5 + 6.25 + 3.125 + 1.5625 = 100
Multiply this 100 by the number 210,000 blocks, we will have the number 21,000,000, corresponding to 21 million Bitcoins.
At the time Satoshi launched Bitcoin, the global money supply was about 21 trillion USD, corresponding to the total number of “money units” in physical form at this time about 2,100 trillion USD, and Satoshi originally wanted the coin. Virtualization will make global transactions faster, simpler and more transparent. Even Bitcoin is expected to replace fiat money.
Satoshi’s goal is to pick something like fiat money, but it’s impossible to be certain unless the future is predictable. As such, he chose a safe middle path and wrote in an email to Bitcoin developer Mike Hearn: “If Bitcoin continues to be a niche market, its value per unit will be low. than current currencies. But if we imagine it being used in just one part of world trade, then there will be only 21 million coins for the whole world, its value per unit will be much greater.”
However, Satoshi also stipulates that this coin will be halved (Halving) until the “block mining reward” drops below 1 satoshi (the smallest unit of Bitcoin). At the same time, the last block mining reward generated will be at block number ‘6,929,999’ and it is expected to be around the year 2140.
Therefore, the halving does not take place indefinitely, but only 32 times, which is also the time when the block reward has bottomed out at 1 satoshi. From there, we can calculate the total number of Bitcoins issued will be:
210,000 (number of blocks per Halving) x 99.99 (total possible rewards of Bitcoin) = 20,999,999,9796 Bitcoin.
However, be aware that the actual amount of Bitcoin circulating in the market will not be 21 million. Because, a part of Bitcoin has been sleeping in wallets that have forgotten private keys or in discarded hard drives. It is estimated that 3-4 million bitcoins have been lost forever.
It is not possible to know the exact number because the number of Bitcoins lost will not be recorded on the blockchain and it will remain the same as those that were not lost. We can only make theoretical predictions based on how long Bitcoins stay in an address and not move.
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