In 2008, a person or entity going by the name Satoshi Nakamoto published a whitepaper called Bitcoin: A Peer-to-Peer Electronic Cash System, but nowhere in the whitepaper does it state that there would only ever be approximately 21 million Bitcoins that could be mined, yet on October 18, 2019 there was a huge milestone. Roughly 85%, or 18 million Bitcoin had been found, leaving 3 million left to be discovered. How do we know this if it wasn’t in the whitepaper?
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According to sources, Mike Hearn had email correspondence with Nakamoto in which the following is explained:
If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. 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. Values are 64-bit integers with 8 decimal places, so 1 coin is represented internally as 100000000. There’s plenty of granularity if typical prices become small. For example, if 0.001 is worth 1 Euro, then it might be easier to change where the decimal point is displayed, so if you had 1 Bitcoin it’s now displayed as 1000, and 0.001 is displayed as 1.
Some people believe that 21 million was arbitrarily selected based on two factors: That new blocks would be added to the Bitcoin blockchain approximately every 10 minutes, and that Bitcoin miner rewards would halve every four years. In the beginning, miners were rewarded with 50 BTC for every block they discovered, but it’s halved twice since its inception with current miners being rewarded with 12.5 Bitcoin per mined block. To keep things fairly simple, I’m not going to get into the mathematics behind it, except to say that the next halvening every 210,000 blocks. The next one is scheduled for May 13, 2020 at 22:20:52 where rewards will drop to 6.25 BTC.
There is something comforting and, maybe in an odd sense, more trustworthy about a token that is finite because even though there will only ever be 21 million Bitcoin created, and even if that is divisible by 8 decimal points consider that in 2017 there was roughly 7.5 billion people on the planet and bitcoin is growing in popularity. This translates into short supply with high demand, which could help stabilize the price and, like gold, increase in value over time because there is only so much of it that can or ever will be mined and put into circulation.
This isn’t even counting the sheer amount of Bitcoin that may have been lost due to forgotten and lost passwords, forever encrypted and locked away with no access to them.
It is expected that the last Bitcoin will be mined in the year 2140 based on hash rate and halvening. As we get closer to the end, it could be that extraordinary amounts of resources will be needed to solve the difficulty, and as rewards halve, it is possible, though highly unlikely that miners would shut down their operations. Does that mean it’s the end of Bitcoin? No. Just the mining to find new token portion of it. A Bitcoin network will still be necessary to maintain the blockchain and log transactions. And don’t forget, there are transaction fees often associated, so keeping a node operational can still be a lucrative business. By 2140, Bitcoin will be a rare, and hopefully valuable, commodity.
Three million more Bitcoin to mine may sound like a lot, but it’s not. Only the generations to come will truly know the impact of Bitcoin. For the early adopters, we can only speculate and accumulate.
And here’s one more interesting thing: It is believed that Satoshi Nakamoto may have approximately one million Bitcoin stashed across several wallets. Curiously, the genesis wallet is holding just over 68 BTC with a small amount of Bitcoin being deposited anywhere from once to twice a day with no withdrawals in its history.
Is it a big deal that there are only 3 million Bitcoin left to mine? I personally don’t think so. But it’s fun to celebrate milestones to keep track of time, kind of like birthdays and anniversaries. Does knowing that Bitcoin is finite and fairly rare give me the urge to invest in some? You bet!
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