Why are There Only 21 Million Bitcoins?

21 Million Bitcoins
21 Million Bitcoins

Everyone is wondering that why Satoshi Nakamoto picked 21 Million as the number of bitcoins to be
created? What is the significance of that number?

There are many myths about this topic but here is a Mathematical explanation for it.

In the beginning, Satoshi Nakamoto offered 50 bitcoins for each block created and that development happened in every 10 minutes.

Since there are 1440 minutes (24×60) in every day, that means that 144 blocks were created so 144X50 = 7200 bitcoins per day, 4 years are 1461 days which include the leap one) and the total bitcoins for the 1st 4 years came out to be 1461 X 7200 = 10519200.

After that, it was decided that every 4 years henceforth would decrease the bitcoins awarded per block created to half of its original value, the total bitcoins are 10519200 *(1 + 1/2 + 1/4+1/8 + … +1/2^n) = 10519200 *2 = 21038400 (if we take approximate of 1+0.5+0.25+0.125+.. = 2 )

That is why 21038400 is the theoretical limit and we don’t want to go forever mining a millionth, a trillionth of a Satoshi. Actually (as for now) we cannot go less than 1 satoshi anyway. So the real number is just a little bit smaller than that, maybe 21038399.99999999 or 1 Satoshi away from the theoretical calculation.

See Also: How Are New Bitcoins Created? A Brief Guide to Bitcoin Mining

Economically, as long as the currency is effectively infinitely divisible, the precise amount doesn’t matter, the limit remains fixed to 4 years.

At the point when Satoshi Nakamoto made the primary bitcoin in January 2009, there were about 21 Million coins left to be mined. The extension to make these numerous coins assumed a critical part in sending the bitcoin costs taking off of late. As more coins were mined, the higher raised the bitcoins cost. On the other hand, as fewer coins were left to be mined, the higher was the bitcoin cost.

As 80% of the aggregate number of bitcoins has just been mined by January 13, there is just a single fifth of the topped supply that will be mined in the coming years. The customary financial matters express that the
cost of aware ascends by virtue of higher request and the restricted accessibility of the item. More than 16.8 million bitcoins have now been mined by the miners worldwide and there will be another 4.2 million advanced coins that will see the light of the day. This happens while the interest for the digital money is consistently taking off, prompting a theory that the bitcoin costs will set aside a flight for the opportunity to come.

 

About : Binary Informatics is a Software Development Company based in Noida, India with development offices in Bay Area US as well. We are a team of 60 and we always strive to offer a high-quality work to our Clients. We provide solutions in Website Development, Web Application Development, Product Development, Mobile apps, Product Engineering, Enterprise Application, Big Data & BI solutions, Business Digitisation & Automation, Portals, eLearning, eCommerce, Social Networking, CRM, CMS, UI/UX etc

Leave a Reply

Your email address will not be published. Required fields are marked *