Understanding the circulating supply of Bitcoin is crucial for grasping its economics. Currently, around 19.5 million Bitcoins are in circulation, approaching the capped supply of 21 million.
Table of contents
The 21 Million Cap
Bitcoin’s design includes a hard cap of 21 million coins. This scarcity is a fundamental aspect of its value proposition. The maximum supply will be reached around 2140, after which no new Bitcoins will be mined.
Impact of the Cap
The capped supply is designed to create digital scarcity. Unlike fiat currencies, which can be inflated, Bitcoin’s limited supply aims to protect against devaluation. This feature is a key driver of its appeal as a store of value.
Bitcoin Mining and Circulation
New Bitcoins enter circulation through a process called mining. Miners solve complex cryptographic puzzles to validate transactions and add new blocks to the blockchain. As a reward, they receive newly minted Bitcoins.
Halving Mechanism
Bitcoin’s built-in halving mechanism slows down the creation of new coins. Approximately every four years, the block reward given to miners is halved. This reduces the rate at which new Bitcoins enter circulation, further reinforcing scarcity.
Usable Bitcoin Supply
While the total mined Bitcoin stands at around 19.8 million BTC, the usable amount is closer to that number. Some Bitcoins are lost or inaccessible due to lost private keys or other factors.
Afterpay and Bitcoin
Afterpay offers a flexible way to pay for purchases. While Afterpay itself is not directly related to Bitcoin, it represents an alternative payment method in the broader financial ecosystem. Afterpay allows purchases from 100 to 20,000 depending on the merchant.
The limited supply of 21 million Bitcoins is a cornerstone of its design. As more coins enter circulation and the halving mechanism continues to reduce the mining reward, Bitcoin’s scarcity is projected to increase over time.
сегодня
This controlled issuance is a key difference between Bitcoin and traditional financial systems, where central banks can influence the money supply.
Lost or Inaccessible Bitcoins
It’s important to note that not all mined Bitcoins are actively circulating. A significant number are considered lost or inaccessible due to various reasons:
- Lost Private Keys: If a user loses their private key, they cannot access their Bitcoin wallet, effectively rendering those coins unusable.
- Forgotten Passwords: Similar to lost keys, forgotten passwords to encrypted wallets can lock away Bitcoins.
- Dead or Damaged Hardware: If a hard drive or other storage device containing a Bitcoin wallet fails and the wallet wasn’t backed up, the coins are lost;
- Deliberate Burning: In some rare cases, individuals may intentionally “burn” Bitcoins by sending them to an unspendable address.
Impact of Lost Coins
The loss of these coins effectively reduces the circulating supply, potentially increasing the scarcity of the remaining accessible Bitcoins. While it’s impossible to know the exact number of lost Bitcoins, estimates suggest it could be a significant percentage of the total mined.
Monitoring the Circulating Supply
Various websites and APIs track the estimated circulating supply of Bitcoin. These resources provide valuable insights into the current state of the Bitcoin network and its economics. Monitoring these metrics can help understand market dynamics and potential price movements.
Future of Bitcoin Circulation
As we approach the 2140 target and the final Bitcoin is mined, the circulating supply will plateau. This fixed supply, combined with increasing adoption, could further solidify Bitcoin’s position as a store of value and a hedge against inflation. The ongoing debate about its role in the global financial system will likely continue for years to come.
The interplay between the fixed supply, the mining process, and the number of lost coins creates a unique economic environment for Bitcoin, influencing its value and adoption.
