Only 21 million Bitcoin can ever be crated. This is known because the code that is Bitcoin defines this. If Bitcoin’s code was changed, it would be a software fork of Bitcoin and not the Bitcoin we know today.
Only 21 Million Bitcoins Can Be Created fact
There are only 21 million Bitcoins that can be created. That total was defined in the original code and can’t be changed. In other words, Bitcoin has a fixed supply.
It works like this, the Bitcoin protocol is code run on computers across the world. That code releases new Bitcoins roughly every ten minutes to “miners” (computers adding transactions to a digital ledger by solving codes). The process of mining maintains and secures the ledger (AKA blockchain). Miners are rewarded with newly created Bitcoin for adding blocks of transactions to the blockchain.
So, a new block on the blockchain is mined roughly every 10 minutes, then roughly every 4 years the newly issued supply awarded to miners is cut in half. The algorithm running Bitcoin will, through this hardcoded process, award exactly 21 million Bitcoin over time.
Now with that said, since access to Bitcoin can be lost, for example, if someone losses their private keys (private keys are basically a password), the actual possible circulating supply is in practice constantly being reduced over time.
So not only is Bitcoin fixed and therefore ultimately non-inflationary (unlike most centralized currencies), Bitcoin will over time will become somewhat deflationary due to Bitcoin being lost.
TIP: Find out how many Bitcoins are in existence today.
This video discusses bitcoin, but most of what they talk about here is common between all cryptocurrencies. We suggest watching this video before moving on as it gives what we consider to be one of the best explanations of bitcoin available on the internet.FACT: Mining rewards being cut in half every four years is known as the Bitcoin halving. See a halving countdown.
Can Bitcoin’s code be changed to change the supply? Technically Bitcoin’s code could be changed by enough people agreeing on creating a new version of Bitcoin and enough people agreeing to stop running the old version. This doesn’t change the fact that Bitcoin as we know it has a fixed supply, it is more a statement that the code can be copied and turned into something new that people can agree or disagree to adopt. An example of this is Bitcoin Cash, a hard fork of Bitcoin that exists alongside the current Bitcoin. Learn more about software forks in cryptocurrency.
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Author: Thomas DeMichele
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Dean Blanscett Doesn't beleive this myth.
My understanding of the technology called blockchain is adding encryption to distributed file systems. Yes a ledger is used by Bitcoin just like any bank uses a ledger. Yes Bitcoin uses blockchain to store the ledger. Blockchain was great until it was not great. The resources needed for the encryption became unsustainable due to advancements in decryption. Bitcoin gave blockchain new life by crowd sourcing the resources needed for the encryption. When a corporation is formed some of the shares are held in reserve and might be used in lieu of payment. That is what is happening with Bitcoin. An incredible amount of encryption is required to maintain a coin’s identity and ownership. So every time a coin is released from reserve into circulation the need for encryption increases demanding more minors. I believe the original plan has the needed miners would fluctuate according to the volume of circulation. Increased circulation would increase value (supply demand issue all currency deals with relating to volume of circulation) which would induce more mining. If circulation weaned the value would go down and miners would thin. Kind of brilliant in self regulation design. Also why the length of time mining Bitcoin is more profitable then the electricity used is not usually very long. 21M arbitrary amount on the ledger side and not the blockchain side. And I thought they already did make an adjustment there????