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What Is Bitcoin Supply?

Bitcoin Supply Manipulation Wont Stabilize The Bitcoin Price, But It Will Create Stable Bitcoin Inflation

Bitcoin Supply Manipulation Wont Stabilize The Bitcoin Price, But It Will Create Stable Bitcoin Inflation

Last updated on January 2nd, 2018 at 12:00 am Manipulating the Bitcoin Supply to Stabilize the Bitcoin Price On December 6, 2014, CoinDesk published an article titled, Can Bitcoins Price Ever Be Stable? In this article, the author covers the issue of Bitcoin price volatility, which, according to experts, is apparently one of Bitcoins biggest obstacles to mainstream adoption. The author presented two possible courses of action the Bitcoin community could take in an effort to stabilize the Bitcoin price: marketing Bitcoin to advance demand and expand the user-base, or manipulate the Bitcoin supply. The bulk of the CoinDesk article was focused on supply-side solutions, covering suggestions from Vitalik Buterin of Ethereum, Robert Samsa crypto currency economics consultantand a Tokyo-based economics research organization. The present article seeks to deconstruct the suggestions for Bitcoin supply manipulation and show the inadequacies that such changes to the Bitcoin protocol would produce. To preface the arguments presented below, I would like to make it clear that I am not disparaging CoinDesk nor the author of the aforementioned article. My criticisms are directed only towards the idea of Bitcoin supply manipulation as a price stabilization mechanismthe CoinDesk article is merely my source for the arguments advanced by the people listed above. People Do Care About the Bitcoin Supply Because of Marginal Utility Vitalik Buterin, the Founder of the Ethereum project, believes that using the Bitcoin supply to stabilize the Bitcoin price is possible and desirable because the amount of currency in circulation is a non-issue to people that use the currency: My view is that no one cares about supply (how many people even know how many US dollars there are in circulation?). Peopl Continue reading >>

80% Of All Bitcoins Will Have Been Mined In A Year From Now

80% Of All Bitcoins Will Have Been Mined In A Year From Now

80% of all Bitcoins Will Have Been Mined In a year From now 80% of all Bitcoins Will Have Been Mined In a year From now JP Buntinx February 1, 2017 Crypto , News The world of Bitcoin is in for quite a reality shock in about a year from now. As most people are well aware of, the amount of bitcoins being mined every day is much compared to a few years ago. What is even more intriguing is how the vast majority of BTC has been mined already. In January of 2018, 80% of all 21 million BTC will be mined and brought into circulation. A significant milestone that should not be overlooked by any means. It is quite interesting to think about how far bitcoin has come since its inception. With a hard limit of 21 million BTC to be generated by 2140, a lot of people assume there are still a lot of coins to be mined for the next few years. While that is true up to a certain extent, we are getting closer to 80% of the finite supply being brought into circulation already. Said milestone will take place roughly 365 days from now. It remains a bit unclear as to what this will mean for the price per individual BTC, though. Asa mining becomes more difficult and less profitable unless continuous new investments take place, the price per existing bitcoin should go up in value. Moreover, with only 4.2 million coins to be generated after January 2018 = over the course of nearly 122 years the demand for bitcoin should increase as well. However, neither of these factors are a given, as the cryptocurrency market does not operate like more traditional models. At the same time, the 80% milestone could force some miners to shut down their operations. We have seen some major mining difficulty spikes over the past few weeks, and that trend will continue for quite some time. A higher mining difficulty r Continue reading >>

Bitcoin - Wikipedia

Bitcoin - Wikipedia

Unspent outputs of transactions denominated in any multiple of satoshis [3] :ch. 5 12.5 bitcoins per block (approximately every ten minutes) until mid 2020, [7] and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued. ^ The symbol was encoded in Unicode version 10.0 at position U+20BF ₿ BITCOIN SIGN in the Currency Symbols block in June 2017. [2] Bitcoin is a worldwide cryptocurrency and digital payment system [8] :3 called the first decentralized digital currency , as the system works without a central repository or single administrator. [8] :1 [9] It was invented by an unknown person or group of people under the name Satoshi Nakamoto [10] and released as open-source software in 2009. [11] The system is peer-to-peer , and transactions take place between users directly, without an intermediary. [8] :4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain . Bitcoins are created as a reward for a process known as mining . They can be exchanged for other currencies, [12] products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. [13] Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin. [14] The word bitcoin first occurred and was defined in the white paper [15] that was published on 31 October 2008. [16] It is a compound of the words bit and coin . [17] The white paper frequently uses the shorter coin. [15] There is no uniform convention for bitcoin capitalization. Some sources use Bitcoin, capitalized, to Continue reading >>

Four Fifths Of The Total Supply Of Bitcoin Have Been Mined

Four Fifths Of The Total Supply Of Bitcoin Have Been Mined

The worlds most popular cryptocurrency, bitcoin , has just passed a very significant milestone in its history. 80% of all the bitcoins which will ever be mined, have now been mined. The cryptocurrency recently saw its 16,800,000th coin mined which marked the 80% mark of all 21,000,000 that will ever be created. Most estimates say that the 21 millionth bitcoin will be mined around the year 2140, at this point it's unclear what would happen to the transaction costs at that time because miners only income would be from transaction fees, which they process, unlike now where they also earn from mined blocks. While there will only ever be 21 million bitcoin, the amount in circulation will be significantly less by 2140. Its possible to lose access to bitcoins by sending them into a wallet that nobody has the private keys to, or if you lose your own wallet. Once the private keys are gone, theres no way for anyone to recover the bitcoin essentially throwing them out of circulation. Bitcoin saw a massive increase in price during 2017, it started year off around $1,000 and steadily rose by $1,000 per month before going wild in December, increasing $10,000 on Novembers price of around $7,900. Continue reading >>

Economics - Why Was 21 Million Picked As The Number Of Bitcoins To Be Created? - Bitcoin Stack Exchange

Economics - Why Was 21 Million Picked As The Number Of Bitcoins To Be Created? - Bitcoin Stack Exchange

Why was 21 million picked as the number of bitcoins to be created? Why did Satoshi pick 21 million as the number of bitcoins to be created? What is the significance of that number? I thought this question had already been asked, but I can't find it. o0'. Mar 17 '13 at 15:59 I added the finance tag since this question is asking about not just the math behind how 21 million blocks was created, but the reasoning behind all that math from an economic perspective (assuming there was one) LamonteCristo Mar 18 '13 at 5:31 I asked myself the same question, but I don't see any clear answer posted on this. fduff May 10 '16 at 16:04 Calculate the number of blocks per 4 year cycle: 6 blocks per hour* 24 hours per day* 365 days per year* 4 years per cycle= 210,240~= 210,000 50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100 Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed. Good explanation, but you're just postponing the answer. Why 4 years per cycle? Why was 4 years per cycle picked as the number for years per cycle? Andrei Mar 17 '13 at 17:41 All this info makes sense, but doesn't really answer the question! B Seven Mar 17 '13 at 18:29 If you check my original answer, you'll see I ended with "but I don't know the economics behind it". I see that has since been edited - not by me. Chris Moore Mar 17 '13 at 21:24 No, slightly less than 21 million, because of the rounding error on the last halvings. Andrei Mar 17 '13 at 21:42 I think we best conclude that nobody knows why Satoshi chose for 21 million or 4 years per cycle. But I would not recommend accepting this answer as correct. In fact it only answers "What's the maximum amount of bitcoins that can exist?". Steven Roose Mar 19 '13 at 20:20 I Continue reading >>

Reward Schedule - How Many Bitcoins Will There Eventually Be? - Bitcoin Stack Exchange

Reward Schedule - How Many Bitcoins Will There Eventually Be? - Bitcoin Stack Exchange

How many bitcoins will there eventually be? Since bitcoins are being regularly rewarded to miners , will the number of bitcoins continue to grow indefinitely, or will there be a maximum total number of bitcoins in existence? And if there is some kind of limit, what is it and how is it enforced? Every block introduces 50 new coins in the system. This quantity (50) halves every 210,000 blocks. So, getting the limit of coins it is possible to generate is quite easy : it's the sum of a geometric series. Also, note that this is an upper bound ; the actual quantity will probably be a bit lower due to rounding issues (BTC has a finite number of decimals, 8). Artefact, yes but that is not the theoretical limit... Basically its (10^8)... 100,000,000 intmain Nov 19 '12 at 22:34 A pre-defined schedule limits the total number of bitcoins so that they gradually approach a total of 21 million (ignoring those that have been lost through deleted or misplaced wallet files). The limit of 21 million bitcoins is "hard-wired" in to the protocol, and there will never be more bitcoins than this: Note that there are some assumptions built into the timing and unless the protocol is changed, they will actually be mined a bit earlier than this chart suggests. David Schwartz Aug 31 '11 at 0:00 Or later--if the value drops precipitously and difficulty takes a while to get low enough again. But the graph is a good rough approximation. eMansipater Aug 31 '11 at 0:02 I think that's very unlikely. Even if there are a few precipitous drops, I think that will be outweighed by the overall trend of increasing hashing power (and they'll be followed be precipitous drops in difficulty). But, yes, that is possible. David Schwartz Aug 31 '11 at 0:04 I think saying "hard wired" is a bit misleading. The producti Continue reading >>

Getting Close: 80% Of Bitcoin Supply Now Mined, Road To The End

Getting Close: 80% Of Bitcoin Supply Now Mined, Road To The End

Getting close: 80% of Bitcoin Supply Now Mined, Road to the End Published January 16, 2018 by Zachary Gian It is now official, 80% of bitcoins supply of 21,000,000 coins has been mined and is in circulation. According to CoinMarketCap, there are now 16,804,275 BTC available. This leaves approximately 4.2 million coins that are yet to be discovered by miners. Miners use extremely powerful computers to solve algorithms as teams, or pools, to mine bitcoin. When these algorithms and complicated problems are solved, new units of the cryptocurrency are created and are put in circulation on the blockchain and the mining pool divides small shares, or rewards, between its members. In the original whitepaper, the creator of bitcoin Satoshi Nakamoto, defined, using a very complicated and precise algorithm, that the supply will be finite and will be equal to just under 21 million coins. That means that there will be no additional bitcoin mined after the final figure. The projected exact supply is 20,999,999 BTC, no more, no less. Miners are currently receiving 12,5 BTC per block mined. However, in two years, there will be what is called halving of reward and this number will drop to around 6,25 BTC per block. This reward will keep decreasing and will be divided by two every four years. Moreover, the mining difficulty is also set to increase gradually. This means that it will require more computer power, and therefore more miners coming together to mine bitcoin as time goes by. So one can wonder, when will the total supply of bitcoin be mined? Well, according to expert calculations, this day should come in the year 2140. Therefore, there is still a long way to go before each and every bitcoin is mined and in circulation. With only less than 21,000,000 tokens, it will be interesting Continue reading >>

Bitcoin Miners Have Already Mined 80 Percent Of The Total Supply Cap

Bitcoin Miners Have Already Mined 80 Percent Of The Total Supply Cap

Bitcoin Miners Have Already Mined 80 Percent of the Total Supply Cap Barely a couple of weeks after bitcoin entered the ninth year of its existence, it passed yet another significant milestone on January 13, 2018, when the number of all coins mined reached 16.8 million. Of the total 21 million bitcoins expected to be extracted in total, 80 percent have thus far been mined. The remaining 4.2 million bitcoin will continue to be mined over time until they are all in circulation. According to the white paper written in 2008 by the creator of bitcoin, Satoshi Nakamoto, the limited supply is a feature designed to deliberately induce scarcity in the cryptocurrency. With time, as the amount of currency in circulation continues decreasing due to various factors, its value will rise proportionately. In this way, bitcoin has relied on the fundamental economic principle of supply and demand for the past nine years since its inception. While miners are currently paid 12.5 BTC as a reward for mining a single block, the bitcoin protocol dictates that the figure is halved every 210,000 blocks. Assuming that the average time between the mining of each block is 10 minutes, it is estimated that the next halving will occur two years from now, or more specifically, sometime in June 2020. Similarly, halvings will continue to occur pretty much indefinitely, with the last bitcoin not expected to be mined before 2140. The next halvening event, however, will only reduce the reward to 6.25 BTC per block. For several years now, the primary motivation for miners to continue mining bitcoin was the BTC reward given out after a block had been mined. In recent times though, with bitcoin suffering from scalability issues and an overall decline in dominance at the hands of other altcoins, miners have ea Continue reading >>

Bitcoin 'miners' Face Fight For Survival As New Supply Halves

Bitcoin 'miners' Face Fight For Survival As New Supply Halves

Bitcoin 'miners' face fight for survival as new supply halves Marco Streng is a miner, though he does not carry a pick around his base in south-western Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng's which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers. The work Streng's computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and - because they earn new bitcoins for the work they do - steadily increase the currency in circulation, currently worth around $10 billion. The process has come to be known as "mining" because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground. But on Saturday, the reward for miners was slashed in half. Written into bitcoin's code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation. From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate, there will be just 12.5. That means only the mining companies with the leanest operations will survive the ensuing profit hit. "The most important thing is to be the most efficient miner," said Streng, the 26-year-old co-fo Continue reading >>

Bitcoin May Be Significantly Undervalued, As 3.79 Million Of Supply Is Not Spendable

Bitcoin May Be Significantly Undervalued, As 3.79 Million Of Supply Is Not Spendable

Bitcoin May be Significantly Undervalued, as 3.79 Million of Supply is Not Spendable 3.79 million bitcoin is estimated to be lost permanently on the public blockchain. Given that nearly 20% of its supply is unspendable, bitcoin is currently undervalued. At the time of reporting, the market valuation of bitcoin is at around $196 billion. The price of bitcoin is calculated by dividing the market cap with its circulating supply of 16.72 million. But, according to a study conducted by bitcoin blockchain-focused digital forensics firm Chainalysis, approximately 3.79 million, or $43.5 billion worth of bitcoin are permanently lost on the public blockchain of bitcoin. Thus, while the official circulating supply of bitcoin is 16.72 million, the actual supply of bitcoin is closer to 13 million. Given that the real supply of bitcoin considering the bitcoin that are not spendable or accessible on the bitcoin blockchain is 13 million, the price of bitcoin should be in the range of $15,000. As of current, bitcoin is being traded in the $11,500 region across many exchanges. On whether the market has priced the unspendable coins to provide the market valuation of bitcoin, Chainalysis senior economist Kim Gauer stated : That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity. Yet the market has adapted to the actual demand and supply available just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates. So the answer is yes and no. Unlike fiat currencies, bitcoin is a dece Continue reading >>

80 Percent Of The Total Bitcoin Supply Have Now Been Mined

80 Percent Of The Total Bitcoin Supply Have Now Been Mined

80 Percent of the Total Bitcoin Supply Have Now Been Mined This weekend marks a milestone for bitcoin as 80 percent of the currency has now been mined into circulation, this means theres only 20 percent left to mine. Satoshi Nakamotos protocol was one of the first to introduce digital scarcity and soon enough the digital asset will become even harder to obtain. Also read: How to Dollar-Cost Average Buy and Hodl Cryptocurrency Like A Boss There Are Only 4.2 Million Bitcoins Left to Mine So far on January13, 2018, 16,800,000 BTC have been mined and theres only 20 percent left for miners to acquire. When Satoshi Nakamoto introduced the bitcoin protocol to the public by launching the codebase in 2009, the cryptocurrency came with a capped supply. The supply will never be increased and Nakamoto set the number to 21 million bitcoins ever to be found. So far the creators plan and miners securing the network have successfully secured this rule from changing with hashpower. Theoretically,however, skeptics believe there could be a way to increase the supply through manipulative tactics such as a 51 percent or Sybil attack . As the digital assets life approaches a decade no one has been able to break the rules of 21 million supply cap. This has given individuals reason to believe that Satoshi solved one of the hardest computational equations, the Byzantine Generals problem , a security flaw that had plagued computer scientists for decades. Essentially the problem exists with distributed networks as the issue brings certain faults or security flaws making it easy to attack. This, in turn, makes it hard for protocols to prove something because there is an unsolvability proof within the network. With Satoshis Proof-of-Work in the original bitcoin protocol, the economic measure makes Continue reading >>

How Is The Bitcoin Money Supply Controlled And Managed?

How Is The Bitcoin Money Supply Controlled And Managed?

How is the Bitcoin money supply controlled and managed? Bitcoins supply of BTC is 100% controlled by the Bitcoin software, which is now distributed globally. Per the Bitcoin protocol, new tokens are distributed to the miner that creates the next block on the blockchain. This is designed to be random, though miners that contribute more compute power have a better chance of mining the next block. For the first ~4 years of Bitcoins history, 50 BTC was distributed to each block, then it halved to 25. After four more years, it was halved again to 12.5 (this is where we currently stand. This halving process is going to continue until the year 2140, when the total supply of Bitcoin will be completely distributed. You can see the total supply graphed here: Because of the decentralized nature of Bitcoin, it would be very challenging to change these fundamentals. Any person is allowed to go and change the software, but unless the rest of the network agrees, no change is made. This is the way that the Bitcoin money supply is secured. Excellent question! This is fundamental to Bitcoin, and in my opinion, one of its assets over some other tokens (some of which have advantages of their own). There will undoubtedly be more detailed answers from people far cleverer than me, but when I first learned about cryptocurrencies, all I could find were hyper-detailed technical analyses and overhyped predictions with little actual evidence to support them. Once I understood how simple this solution really is, it clicked for me, and I bought my first coins right away. Part 1) How is Bitcoin supply CONTROLLED? Answer: By having a finite cap, and making it increasingly hard to create new coins. Bitcoins code was written such that a) only 21,000,000 BTC can ever be created, and b) the algorithms re Continue reading >>

What Will Happen When All Bitcoins Are Mined?

What Will Happen When All Bitcoins Are Mined?

What Will Happen When All Bitcoins Are Mined? Last updated on December 12th, 2017 at 10:45 pm There are only 21 million Bitcoins available for mining. Once all of those Bitcoins have been mined, no more new Bitcoins will ever be created. This stands in stark contrast to national currencies, which are constantly expanding. Governments like to encourage inflation, so they generally increase the money supply. This leads to the devaluing of currencies, however, and in practice, it can reduce the wealth held by individuals and families. For Bitcoin, there is no parallel devaluation. If anything, Bitcoins should become more valuable over time as the number of Bitcoins entering the system decreases. Not only is the total supply of Bitcoins capped at 21 million, but the flow of new Bitcoins into the market has also been tapering off. Roughly every four years, the number of Bitcoins awarded for mining a block is cut in half. When Bitcoin miners mine a new block of transactions they are rewarded freshly minted Bitcoins. Originally, 50 Bitcoins were earned for mining a block. Then it dropped 25 Bitcoins, and then to 12.5 Bitcoins . In 2020, itll drop to 6.25 Bitcoins. Thus, while a government may constantly increase its money supply, Bitcoin has built-in features that encourage the exact opposite. The decreasing flow of new Bitcoins and the 21 million cap will help ward off inflationary pressures. Also, there are many lost Bitcoins that were stored on old hard drives that were thrown away and can no longer be recovered. This makes the total supply of Bitcoins actually lower than 21 million. If youre already familiar with the whole bitcoin mining process and how the blockchain works, feel free to skip down to the next section. If not, well quickly bring you up to speed. Bitcoin mi Continue reading >>

80% Of All Bitcoins Already Mined, Only 4.2 Million Coins Left Until Supply Cap

80% Of All Bitcoins Already Mined, Only 4.2 Million Coins Left Until Supply Cap

80% Of All Bitcoins Already Mined, Only 4.2 Million Coins Left Until Supply Cap 80% of the total supply of Bitcoin has now been mined, driving up the difficulty and cost of mining. Jan. 13 marked an important milestone for Bitcoin when 16.8 million bitcoins (BTC), or 80 percent of the entire Bitcoin supply, were mined . This means only 4.2 million bitcoins, or 20 percent, are left to mine until Bitcoins 21 million supply cap is reached. BTC contains the 21 mln cap built into its protocol by Satoshi Nakamoto, first mentioned in their 2008 White Paper , as a way to introduce digital scarcity to cryptocurrency. With such a cap in place, the more bitcoins are mined, the more scarcity is produced on the market. Scarcity arguably creates demand, which in turns makes the coins more valuable. Once 21 million bitcoins have been mined, it will become even harder to obtain them, also potentially making each coin more valuable. Miners currently receive a 12.5 BTC reward for every block that they mine, but Nakamotos protocol also requires that the mining reward is halved every 210,000 blocks , or approximately four years. The next miner halving will take place within two years, approximately in early June 2020 depending on hashrate, bringing the rewards down to 6.25 BTC per mined block. Not every digital currency is mineable like BTC. Some cryptocurrencies are created with the entire supply released all at once, in which case the total supply is either held or in circulation and there is no way to mine or mint new coins. Continue reading >>

New Money - Bitcoin

New Money - Bitcoin

THIS week's Free exchange column looks at some of the monetary economics of Bitcoin. One of the funny (and telling) things about Bitcoin is that its basic technical details are sufficiently complicated that every piece on the subject must begin with some sort of explainer. For that, let me direct you to a companion piece to the Free exchange, which looks at Bitcoin as a technological platform. Bitcoin is really quite ingenious and elegant, but it has all sorts of basic flaws that make it an unlikely candidate for world domination. The Free exchange focuses on one in particular: limited supply. The currencys money supply will eventually be capped at 21m units. To Bitcoins libertarian disciples, that is a neat way to preclude the inflationary central-bank meddling to which most currencies are prone. Yet modern central banks favour low but positive inflation for good reason. In the real world wages are sticky: firms find it difficult to cut their employees pay. A modicum of inflation greases the system by, in effect, cutting the wages of workers whose pay cheques fail to keep pace with inflation. If the money supply grows too slowly, then prices fall and workers with sticky wages become more costly. Unemployment tends to rise as a result. If employed workers hoard cash in expectation of further price reductions, the downturn gathers momentum. Bitcoins money supply is still growing; its miners are just over halfway to producing the total possible number. New coins will be minted until around 2030. Miners may then introduce transaction fees as compensation for their critical verification work. More worryingly, deflation is already a reality. Soaring demand for the currency is partly responsible for boosting its price (therefore reducing the price of everything else in Bitco Continue reading >>

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