Bitcoin network has just surpassed the mark of 19 million mined units, according to data from Bitbo. This mark was surpassed on Friday (1), when there were exactly 19,000,043.75 BTC in circulation on the market.
That is, there are now less than 2 million BTC left to be mined over the next 118 years. Given that the maximum supply is 21 million, this means that there is less than 10% of new BTC to be put into circulation.
In less than 15 years of its creation, BTC has proven to be a tool with 100% accurate cycles. Its issuance remains fixed to this day and should remain so until it reaches the limit of 21 million BTC. As Satoshi Nakamoto, creator of the cryptocurrency, said: “the rules are written in stone”.
BTC: from idea to conception
The milestone demonstrates how the creator of BTC was able to bring together decades of research in different areas of computer science to achieve scarcity in the digital realm. In fact, absolute scarcity and its predictability are the biggest features that differentiate BTC from other cryptocurrencies.
In addition, BTC brought a new way to guarantee the scarcity of something in the digital environment. Before its creation, the only way to prevent double-spending – someone spending the same money twice – was through a central authority. This authority, normally a bank, was responsible for checking the balances and confirming their veracity.
What Nakamoto did was eliminate the need for that central authority through decentralization. Each BTC user can use their computer to run a node and check the network’s transactions on a distributed ledger. In this way, all peers on the network acted as users and inspectors at the same time.
To run the nodes, users run software that enforces strict spending conditions that would prevent a digital representation of value from being spent twice. Or even make it possible, but at a very high price. In other words, BTC encourages honest behavior.
Issuing new BTC
Currently, BTC is issued at a rate of ten minutes on average. In that interval, 6.25 new BTC enters the network – the miners reward amount. In total, around 900 new BTC are mined per day.
This block reward, as it is called, does not remain the same value. As the BTC code dictates, there is a halving every 210,000 blocks, or approximately four years. When Nakamoto mined the first block, for example, his reward was 50 BTC.
The process of cutting the issuance of new BTC is called halving and acts in a decreasing way. If 19 million BTC was mined in about 13 years, the remaining two million will take at least 100 years to be issued. Of course, if the BTC protocol remains as it is today.
However, and curiously enough, the 21 million BTC limit was not originally set in the white paper. That is, Nakamoto did not create a ceiling for the cryptocurrency supply. But as the reward of the blocks is decreasing and the network is decentralized, this limit is preserved by the users themselves.
“BTC implementations control the issuance of new coins. The software verifies that each new block does not create more than the allowable block allowance,” said Jameson Loop, cypherpunk and co-founder of Casa.
That is, in practice, the scarcity of BTC is defined by its decentralization and by the users themselves, without anyone’s control. And until then, BTC will stick with its rules written in stone absolutely intact.