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Why is the maximum supply of BTC limited?

avatarPothireddy SushmithaNov 24, 2021 · 3 years ago3 answers

Can you explain why the maximum supply of Bitcoin (BTC) is limited? What is the reason behind this limitation and how does it affect the value and scarcity of Bitcoin?

Why is the maximum supply of BTC limited?

3 answers

  • avatarNov 24, 2021 · 3 years ago
    The maximum supply of Bitcoin is limited to 21 million coins. This limitation is a deliberate design choice made by Bitcoin's creator, Satoshi Nakamoto. The reason behind this limitation is to create scarcity and ensure that Bitcoin remains a deflationary currency. By limiting the supply, Bitcoin becomes more valuable over time as demand increases. This scarcity also helps to prevent inflation and maintain the stability of the currency.
  • avatarNov 24, 2021 · 3 years ago
    The limited supply of Bitcoin is one of its key features that sets it apart from traditional fiat currencies. Unlike central banks, which can print more money and devalue the currency, Bitcoin has a fixed supply. This limitation ensures that Bitcoin cannot be easily manipulated or inflated, making it a more secure and reliable store of value.
  • avatarNov 24, 2021 · 3 years ago
    The maximum supply of Bitcoin is limited to 21 million coins, and this limitation is enforced by the Bitcoin protocol. This means that no more than 21 million Bitcoins will ever be created. Currently, there are around 18.5 million Bitcoins in circulation, and the remaining coins will be gradually mined over time. This limited supply contributes to the scarcity of Bitcoin and is one of the factors that drive its value.