Bitcoin is undoubtedly the cryptocurrency that revolutionized the world of digital money in the global financial system, giving way to a new way of seeing business and the different commercial exchanges and means of payment. Hence, other cryptocurrencies based on blockchain technology or smart contracts, such as Ethereum, have been created and almost all have a new way of understanding the world of finance and money in general.
How are Bitcoins created?
The creation of this Cryptocurrency is through a process that is known as mining. The new Bitcoins are generated through a competitive and decentralized process called mining, which is based on the fact that individuals or miners receive awards from the network for their services. These Bitcoin miners perform the transaction process, and secure the network using specialized hardware and receive Bitcoins in exchange for the service provided.
The Bitcoin protocol was designed so that the new Bitcoins are created at a previously set rate, which makes the mining business competitive and appealing. This means that the greater the number of miners present in the network at a given time, this increases the degree of difficulty in obtaining benefits, so that the miners seek the greatest efficiency, in order to reduce operating costs.
No authority or developer has the control to manipulate the system and increase profits. The control and security of Bitcoin is such that every Bitcoin node that exists in the world will automatically reject everything that does not conform to the norm in the system to follow. The number of Bitcoins that are created each year is automatically reduced by half over time, until the issuance of Bitcoin stops definitively, when the amount of 21 million Bitcoins has been achieved. Once this point has been reached, with probability, Bitcoin miners will remain exclusively for the increasing amount of transactions and for the rate generated by the movement.
What is the value of Bitcoin?
The price of this Cryptocurrency, as in fiat money, is determined by supply and demand. This means that when the demand for Bitcoin increases, its price rises, and when demand falls, its price inevitably falls. This is why there is a limited number of Bitcoins in circulation, and those that are created are made at a predictable and decreasing rate, which means that demand must continue at this level of inflation to keep its price stable.
How many Bitcoin exist in total?
Although there is a maximum limit of 21 million Bitcoins that will be created, this will not be a limitation for transactions, since those that already exist can be subdivided into up to 8 decimal places, that is, 0.000.000.01 BTC or in smaller units if it is required in the future, even reaching a 1mBTC or 0.001BTC millibitcoin. There are currently 17,800,000 Bitcoins mined on the market, which represents 85% of the planned amount, which is 21 million, so that about 3,200,000 Bitcoins would remain to be mined.
It is estimated that by 2032 99% of the scheduled Bitcoins will have been mined, and for what is presumed, the production speed will be increasingly lower, so it is thought that it is possible that by the year 2140 it will already be has mined all 21 million Bitcoins planned at the time the limit of Bitcoins to be mined was established.
Can you create more Bitcoins?
Once the expected amount of Bitcoins has been reached, that is, the 21 million created, no new Bitcoins can be created, since its production is limited. At this point, the miners who previously earned their profits through the mining block reward will stop obtaining it and will have to look for other means of profit. When this happens and there are no more mining rewards, an option for miners would be to obtain commissions. This means that when a Bitcoin user makes a transaction, a small fee or fee is generated, which would go to the miner (in this way they would be rewarded instead of the “per block” reward that was previously generated).
What do you think about this topic? Did you know that there was a limit on Bitcoin mining?
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