The highest number of Bitcoin is to just under 21 Mil l ion Bitcoin limited (20.999.999,9769 BTC). The maximum amount of money is set in the Bitcoin Code. To change requires a broad consensus ( consensus ) of the network. Thus, Bitcoin is a finite resource. The last Bitcoin is expected to be 2140 dug out of the ground.
By Alex Roos
17. December 2018ShareFacebookTwitterLinkedInxingemail
The special feature of Bitcoins is that it is both a digital and rarely . Digital files can be copy – in the case of Bitcoin, it’s different. The amount of Bitcoin set Satoshi Nakamoto already before the Genesis Block, the first Bitcoin Block. This Limit is one of the most important features of the crypto-currency.
Why is the Bitcoin limited to 21 million?
Satoshi Nakamoto was based on the distribution of Bitcoin to the precious metal Gold. Initially, when everything was Gold in the earth, they found it relatively often. However, to promote the more Gold, the less remained in the soil. Since Gold is a finite resource on earth, over the course of time, becoming less and less Gold in the ground – in the case of Bitcoin, this is quite similar.
Satoshi Nakamoto has never commented as to why the began issuing Bitcoin 50 Bitcoin per Block, and every 210,000 blocks cut in half. In principle, these constants are not relevant for the functioning of Bitcoin. It is only important that the release is written new units of money in the computer code, so that all participants are familiar with these parameters and you can’t break this rule.
A comparison between the Euro and Bitcoin
The biggest difference between Euro and Bitcoin is the decision taken at the end of authority. The European Central Bank (ECB) may raise the amounts of money of the Euro and lower, and has the last word. In the Bitcoin Ecosystem, there is no comparable authority. Instead, the network is via individual decisions to a consensus. The participants, the full sovereignty is left to you and you can decide to change the network or to leave.
The second difference is that the set of all mined Bitcoin can be to find any time. The Euro, however, it is possible to estimate the amount of money only. In addition, one distinguishes in the case of Fiat currencies between different money holdings.
amounts of money in Bitcoin
The number of mined Bitcoin is not equal to the available Bitcoin. Theoretically, the 21st million Bitcoin are in circulation, however, certain events can lead to the fact that not all of the Bitcoin can be spent.
If the Private Key is lost and the accessible Bitcoin can no longer be moved, the likelihood of encountering a certain Output, so low that it is regarded as impossible. Specifically, this means so that an Output of 50 BTC, its associated Private Key no longer exists, is lost forever. This Bitcoin not count to the maximum money supply of 21 million, however, they are available.
are lost, How many Bitcoin can not be accurately determined. Estimates are between three and four million in lost Bitcoin.
On the other hand, there could be a so-called “Fractional Reserve Banking” with Bitcoin. The supposed amount of money would go on the number of mined Coins. This phenomenon can not happen on the Blockchain itself, but only, if, for example, stock exchanges attribute to your users ‘ Bitcoin, as a store in fact, even on a Wallet.
A similar Situation came up in 2013 when the Bitcoin exchange Mt.Gox in front of. At the time, hackers gained access to the Wallet of Mt.Gox and stolen Bitcoin. The Bitcoin of the user-managed Mt.Gox with a MySQL database and these are not to be wrote to the users of Bitcoin that were on Reserve.
what is the output of Bitcoin?
The emission curve of Bitcoin is so modeled that Bitcoin is finite. Satoshi Nakamoto programmed this Emission in the Bitcoin Code. He specified that the Coinbase , so the transaction, the new Bitcoin every 210,000 blocks cut in half. Since in the cut ten minutes pass, until a new Block sees the light of the world, correspond to 210,000 blocks, about four years. The initial reward for a Block in the year 2009 was 50 BTC. Meanwhile, in 2018, we experienced already two and a half coats, the Coinbase is only 12.5 BTC.
The halving of the Coinbase will continue and the Rate that new Bitcoin are issued, will be reduced. One day, the Coinbase will fall to Zero. That is, there is no new Bitcoin will be more coming in the Ecosystem.
What will happen if all the Bitcoin are gemint?
Satoshi writes in the Bitcoin White Paper:
“According to the agreement, the first transaction of a block is a special transaction that creates a new Coin, which passes into the possession of the block generator. In this way, creates an incentive for Nodes to support the network. As a way to distribute for the first time, Coins and in circulation, since there is no Central authority that could take over.
The continuous Adding of a constant amount of new Coins is analogous to the Mining of Gold (engl. Mining), in which an effort is made to bring Gold into circulation. In our case, the cost is the time and the electricity which is taken by the computing service.
The incentive can also be by transaction charges. If the Output value of a transaction is less than its Input value, the difference is a transaction fee that will be added to the incentive value of the block that includes the transaction. As soon as a predetermined number of Coins have entered circulation, the pivoting of the incentive completely to transaction fees and be completely inflation free.“
Thus, Nakamoto says that the Miner can still get a reward for securing the network, even if the Coinbase-is eliminated transaction. With advancing time and declining Coinbase transaction gain fees more and more important.
The End Game
Bitcoins “End Game” is that the Coinbase is eliminated completely. The reward for the Miner is then exclusively of the transaction costs. It is impossible to determine the transaction fees today. However, we can make a few guesses:
Since the place in a Block is finally out, you need to give the Sender a fee for your transactions. The amount of this fee depends on how many other transactions are still waiting for a confirmation of the Miner. Who has it and his transaction in a hurry, you may pay a higher transaction fee. So he offers the miners a greater incentive. As an auction market, wherein the transmitter is betting for the place in the Blockchain.
When there are too few transactions take place, could it be that the Mining for the Miner is unprofitable. In this case, you would turn off probably your Hardware or any of the other crypto currency. So there is a balance between the Hash Rate in the network, the price of Bitcoin and the number of transactions in the network.
– Economic perspectives on the quantity of money in Bitcoin
As the number of Bitcoin is limited, Bitcoin is a deflationary currency. Deflation means that the purchasing power of each unit of money increases over time. The inflation rate into Bitcoin, by decreasing Coinbase. Initially, Bitcoin had a high Inflation, because there have been a few Bitcoin in the Ecosystem and with each new Block of 50 BTC.
today, there are over 17 million Bitcoin per Block to 12.5 BTC. Thus, the inflation rate per year is under four percent. You can determine the annual rate of inflation. The formula is:
Annual Inflation = (current, Coinbase-Reward x 6 x 24 x 365) / current amount of money
[Since the amount of money with each new Block increases slightly, this rate is not an exact inflation. However, it is a good reference point.]
In this monetary policy are the two most commonly represented perspectives:
According to the British Economist John Maynard Keynes, Deflation is bad for the economy. Due to the rising purchasing power of the monetary units of the people, and entrepreneurs are encouraged to save the money to consume rather than to invest.
According to the Austrian Economist Ludwig von Mises, Deflation is good for an economy, as people are not able to postpone consumption forever. Further, the followers of the Austrian school is a draw, and that Deflation occurs in all stages of production and the profit margins of the entrepreneurs are not affected. Deflation encourages hoarding or Saving of capital and the investment in long-term projects.
Coinbase and the Bitcoin price.
do The number of issued Bitcoin through Coinbase has directly something to do with the purchasing power of the Bitcoins. While in 2009, 50 BTC per Block was paid out, you could buy at the time, nothing. With 12.5 BTC by the end of 2017, that looked quite different. So it may well be that the 6.25 BTC in 2020 will have a higher purchasing power than the 12.5 BTC today.
The Coinbase is intended primarily for the liquidity and fair Distribution of the money unit. While in many ICOs, all of the tokens have existed since the first hour, and this is distributed only, there are Bitcoin is a fair distribution of coins for miners to protect the network.
The maximum amount of money in Bitcoin is a constant. It could only be by a generally accepted Hard Fork changed.
