There Will Never Be 21 Million Btc!
That's what everyone thinks. Bitcoin will one day be 21 million units. Is this true?
NO. You are misinformed.
Why?
Due to a rounding incompatibility difference (since one bitcoin can only be divided into eight decimal numbers), it is not possible for the block reward to be halved indefinitely. In this case, the maximum number of Bitcoins available or possible to exist at any given time is 20,999,999.9796 BTC.
21 is a triangular number in itself. Triangular numbers count objects arranged in an equilateral triangle and therefore make calculation easier and more efficient. On top of that, the mathematical explanation for “21 million” was linked by a user on StackExchange to Bitcoin’s deflationary “block halving,” which occurs every four years, and was calculated as follows:
Calculation of the number of blocks per four-year cycles:
6 blocks per hour
* 24 hours a day
* 365 days a year
* 4 years each cycle
= 210,240
= 210,000
Sum of all block reward amounts 50 + 25 + 12.5 + 6.25 + 3.125 + 1.5625 = 100
Multiplying the two together 210,000 * 100 = 21 million.
In economic terms, the net amount does not matter as long as the limit remains constant, since the currency is infinitely divisible.”
Although the number 21 million was an “informed guess” for Nakamoto, it was not an easy estimate to make. “It was a difficult choice because once the network is up and running it will be fixed and we won't be able to make changes,” Nakamoto said in an email exchange with Mike Hearn, one of Bitcoin's early developers.
Nakamoto's goal was to choose something similar to fiat currencies, but without a crystal ball this was almost impossible to do. So Nakamoto started looking for a solution closer to the middle ground.
What is Bitcoin block halving?
While “splitting in half” may seem like some kind of cruel medieval punishment, it is not. Halving refers to Bitcoin's deflation protocol and basically it happens as follows:
Bitcoin miners compete to “mine” blocks Every block mined contains a Bitcoin reward The reward for each block (started at 50 BTC per block) is halved every 210,000 blocks, or approximately every four years.
This allows bitcoins to circulate continuously, but increasingly slowly, until the “block reward” drops below 1 satoshi (the lowest subunit of a bitcoin). You can find the details of the three previous and upcoming block halvings in the table below:
The digital tombstone of the last block reward to be mined will read '6,929,999' and will occur around the year 2140 when the block reward drops below 1 satoshi (the lowest BTC subunit).
Why is the 'Bitcoin block halving' important? Rareness? The law of supply and demand? Whether you burn or lose coins (it is estimated that around 20% of all bitcoins, or 4 million, are lost forever) there will never be even one satoshi more than Bitcoin's supply cap of 20,999,999.9796 BTC. In contrast, fiat currencies can be issued in potentially infinite quantities, resulting in a greatly reduced purchasing power of these currencies over time.
The block halving protocol ensures that inflation never occurs and the purchasing power of the currency never decreases. With fewer bitcoins entering circulation over time and increasing demand, it doesn't sound like a bad system.
21 Million Bitcoins
8.5 Billion people
You do the math.
In his e-mail correspondence with Hearn, Nakamoto said that he imagined a world where 0.001 BTC would be equivalent to 1 euro, and said, “For example, if 0.001 BTC equals 1 euro, it would also be easier to change the place of the commas, so if you have 1 bitcoin, 1000, and if you have 0.001 bitcoin, this would be equivalent to 1 euro.” We would like to point out that you can show it as 1.
Let's see what we will see.
