What is the finite supply of bitcoin?

3 answers

• Dec 17, 2021 · 3 years ago
  The finite supply of bitcoin refers to the fact that there will only ever be 21 million bitcoins in existence. This is a key feature of bitcoin's design and sets it apart from traditional fiat currencies that can be endlessly printed. The limited supply of bitcoin is achieved through a process called mining, where new bitcoins are created and distributed to miners who solve complex mathematical problems. As more bitcoins are mined, the rate of new supply decreases, and it becomes harder to mine new coins. This scarcity is one of the factors that contribute to the value of bitcoin. With a limited supply and increasing demand, the price of bitcoin has the potential to rise over time. However, it's important to note that the value of bitcoin is also influenced by various other factors such as market sentiment, regulatory developments, and technological advancements.
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• Dec 17, 2021 · 3 years ago
  The finite supply of bitcoin means that there will never be more than 21 million bitcoins in existence. This scarcity is a fundamental aspect of bitcoin's design and is one of the reasons why it has gained popularity as a store of value. Unlike traditional currencies that can be printed by central banks, the supply of bitcoin is limited and predictable. This fixed supply ensures that bitcoin cannot be devalued through inflation. As a result, some people view bitcoin as a hedge against inflation and a way to preserve wealth. However, it's worth noting that the finite supply of bitcoin does not guarantee its value. The price of bitcoin is determined by supply and demand dynamics, as well as various other factors that can influence market sentiment.
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• Dec 17, 2021 · 3 years ago
  The finite supply of bitcoin is a key feature that distinguishes it from traditional currencies. Unlike fiat currencies that can be printed at will, the supply of bitcoin is limited to 21 million coins. This scarcity is built into the bitcoin protocol and is enforced by the mining process. Miners compete to solve complex mathematical problems, and in return, they are rewarded with newly minted bitcoins. However, the rate at which new bitcoins are created is halved approximately every four years in an event called the halving. This ensures that the supply of bitcoin grows at a decreasing rate, leading to a gradual slowdown in the creation of new coins. The finite supply of bitcoin has implications for its value and future. As the supply becomes scarcer, the theory is that the demand will increase, potentially driving up the price. However, it's important to remember that the value of bitcoin is highly volatile and influenced by a wide range of factors.
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