There’s been some talk over whether there’ll be more than 21 million of these digital Bitcoin. And if you’re a bitcoin investor, this is an important conversation.
So, what’s the deal?
First things first, Bitcoin is designed to have a maximum supply of 21 million units. This is baked into the code. This cannot be changed without a major overhaul of the entire system. Now, some have speculated that there might be a loophole or some sneaky way to wiggle around this limit. But it’s unlikely.
You see, the way Bitcoin works is that new units are created through a process called mining. Miners use specialized software to solve complex mathematical problems, and when they solve one, they’re rewarded with brand new Bitcoins. The reward used to be 50 Bitcoins per block, but it’s been halved every 210,000 blocks. Currently, as of April 2023, this reward is 6.25 Bitcoins per, and it will continue to decrease until all 21 million Bitcoins have been mined. That coming well down the road in 2041.
Now, you might be thinking, “But wait a minute, if the reward keeps getting halved, won’t that mean there will eventually be more than 21 million Bitcoin?” Well, that’s where things get a bit wonky. You see, the reward won’t actually ever reach zero. Instead, it will approach zero asymptotically, meaning that it will get smaller and smaller but never actually reach zero.
This means that while the number of new Bitcoins being created will decrease over time, there will never be more than 21 million Bitcoins in existence. So, if you’re a bitcoin investor, you can rest easy knowing that the supply of Bitcoin is finite and won’t be diluted by some scheme.
But what about the real world, you ask? Well, there are plenty of examples of assets that have a finite supply. Gold, for instance, is a finite resource that cannot be created out of thin air. This is part of what gives it its value. Similarly, Bitcoin’s limited supply is one of the factors that gives it value in the eyes of investors.
That all said, we’ve seen two breakaways, if you will, before with the Bitcoin Cash and Bitcoin SV, so there will likely be other forks and branches to come. Anything could happen in the future.
But if things go as is, the limit of 21 million Bitcoin is expected to be reached sometime around the year 2140. At that point, it’s game over, Bitcoin over.
Between now and then, though… It’s a long, long way.