The fascinating world of Bitcoin and understand why it has a capped supply of 21 million coins.

Bitcoin operates on a decentralized system using a technology called blockchain. The creators of Bitcoin, who are pseudonymously known as Satoshi Nakamoto, designed it with several key principles in mind, one of which is scarcity. Scarcity is a fundamental economic concept that refers to the limited availability of a resource.

In the case of Bitcoin, the almost 21-million-coin supply is intentionally capped to mimic the scarcity found in precious metals like gold. This cap creates a sense of scarcity and, in theory, should help preserve the value of Bitcoin over time. By having a limited supply, Bitcoin aims to avoid the pitfalls associated with traditional government currencies, which can be subject to inflation as central banks print more money or as they call it quantitative easing.

The process of creating new bitcoins is called mining. Miners use powerful computers to solve complex mathematical problems, and in return, they are rewarded with newly created bitcoins. However, the reward for mining decreases over time through a process called halving. Because a block takes about 10 minutes to solve on average, approximately every four years, the reward is halved, reducing the rate at which new bitcoins are introduced into circulation.

The Bitcoin blockchain started on the 3rd of January 2009 with the Genesis block, with every block having a reward of 50 Bitcoin. At block 210 000 the first halving occurred, and the reward was reduced to half. So, from block 210?000 to block 419?999 the reward was 25 Bitcoin and the second halving occurred and 12,5 Bitcoin became the reward from block 420?000. This key principle continues every 210,000 new blocks until there are only 0,00000001. You can only divide a Bitcoin with 100 million, there are only 8 zeros behind 1 Bitcoin the smallest unit of a Bitcoin is 0,00000001 also called 1 Satoshi.

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In total, the capped supply of Bitcoin cannot surpass 20 999 999,99755530 (almost 21 million) and there will not be any new Bitcoins or Satoshi’s approximately after the year 2139.

The limited supply of approximately 21 million Bitcoins is a deliberate design choice to create a digital form of scarcity, like precious metals. This scarcity is intended to contribute to the long-term value and stability of Bitcoin as a decentralized digital currency.