Bitcoin is the talk of the century. You can’t go a week without some kind of newspaper covering the latest Bitcoin news. Between the idea of a decentralized currency and the revolutionary nature of blockchain technology, it’s no wonder many people think that Bitcoin can change the world.
Much gets made of the ever-fluctuating price of Bitcoin. But exactly how many Bitcoins are there?
Understanding the fluctuations in the supply of Bitcoins is key to understanding whether you should be investing. This article will walk you through everything you need to know.
How Bitcoin Works
“How many Bitcoins are there?” is a more complicated question than it seems. To even understand what the answer means, you have to have a solid understanding of Bitcoin, its history, and the purpose of cryptocurrency. You also have to understand the factors that go into the fluctuating number of Bitcoins.
Bitcoin is a completely digital currency founded in 2009 by an anonymous person — or group of people — known as “Satoshi Nakamoto.” They invented it to create a sort of “decentralized currency” that operates without the constraints of the government.
However, this would simply be Monopoly money if it weren’t for the complex counter-fraud measures that Bitcoin takes. What makes it so significant is that it has an internal way of detecting fraud. This gives it value and makes it viable for real-world transactions.
This securing mechanism is just as important as Bitcoin itself. It’s known as the blockchain.
The blockchain is a series of technologies that work to secure transactions.
The concept of blockchain centers around breaking every single part of a business transaction as its own “block” in a “chain.” If a single link of a chain gets broken, the whole chain is useless.
Because there’s no federal government printing money and making sure it’s legal, every time a Bitcoin gets minted, purchased, sold, or used in a transaction, it has to get verified. Each specific interaction is built with a complex cryptogram. The transaction cannot be completed until the cryptogram is solved.
Essentially, imagine every interaction in a manufacturing process has its own serial number — rather than each product having a serial number.
If you’re producing, say, tomato sauce, the farming of the tomatoes, the shipping of the tomatoes to a factory, the creation of the space, the bottling of the sauce, the transferring of the sauce to stores — each of these parts has its own serial number that’s regulated internally — no one needs to assign it.
This offers unprecedented levels of security. If there’s a bad batch of tomato sauce, not every jar needs to get pulled. You could immediately trace back the serial numbers to where the problem happened and eliminate the batch that had the issue.
So who completes these transactions? Who are the people securing the blockchain?
Keeping with the decentralized nature of the crypto industry, it’s anyone who can solve the cryptogram first. The person to complete the transaction gets paid in Bitcoin, which can go for a lot of money these days.
The industry calls this process “mining Bitcoin” because of how much work it requires to mint one coin.
How to Mine Bitcoin
These complex cryptograms aren’t something that someone can just sit down and work out. They need high-powered computers to calculate.
Bitcoin certainly isn’t minted in the quick way that paper money is. In fact, most cryptocurrencies get mined by only a few of the top companies out there.
Bitcoin mining is key for many advocates in the world of Bitcoin because they can get into the crypto world without having to pay for it.
The only problem with this strategy is that Bitcoin mining is a zero-sum game. Only the person who solves the cryptogram gets the money.
It’s also completely a game of chance. Those with the most computing power have the highest likelihood of winning.
Though Bitcoin is a digital currency, mining is a very physical process. The computers that solve the cryptograms are massive and often break down in various ways.
This requires people who are knowledgeable about these machines to get out there and fix them manually. You have to ensure not just that your machines are functioning, but that they’re functioning at their full capacity. You can’t miss a single win that could come to you because of a power loss.
Bitcoin mining was largely dominated by China until the government cracked down on cryptocurrency. However, it’s speculated that many Bitcoins are still mined in China illegally. Unfortunately, the deregulated, anonymous, and hard-to-trace nature of the Bitcoin world makes illegal activity common.
Bitcoin mining takes up an extreme amount of energy, and many Bitcoin mining farms use more power than any other company in their country.
How This Affects the Number of Bitcoins
As you can see, the creation of cryptocurrency is significantly more complicated than the creation of federally regulated currency. Because of this, there are significantly less “Bitcoins” than there are dollars in the world. Often, when you buy Bitcoin, you’re buying a percentage of a Bitcoin — it’s effectively more like investing.
Different subdivisions of Bitcoin have different names. A satoshi is the smallest unit of Bitcoin — 100 million satoshis is equal to one Bitcoin.
A microbitcoin is 100 satoshi, and a millibitcoin is 100,000 Bitcoin. There’s still debate over what the best way to note transactions will be. If the price of Bitcoin stays as high as it is, it would be very inconvenient to write out normal-day transactions, with almost every purchase being way below even the baseline of “one.”
How Many Bitcoins Are There?
Currently, there are 19 million Bitcoins out there in circulation. There are over 900 Bitcoins mined every day. That is four times as many Bitcoins as there were back in 2010, just after the beginning of Bitcoin.
Currently, one Bitcoin is worth close to $30,000. This should give you an idea of the complexity of the value of Bitcoin. However, this will develop over time if things go well — which we’ll explain later.
In the End
There’s a hard cap on the number of Bitcoins that can be created. That cap is 21 million.
There’s a cap on the number of Bitcoins that can be created because Bitcoins eventually have to go into use. The Bitcoin market is currently exciting, but it’s only in its beginning phase.
Many investors in Bitcoin forget the purpose of it in the current market. As stated earlier, Bitcoin right now is a bit more of an investment than a currency. People speculate on the price of Bitcoin, get paid creating wallets and ledgers to supply Bitcoin, make money talking about the future of Bitcoin, and get paid to mine Bitcoin — but the actually uses as a currency are limited.
Eventually, the incentive for making Bitcoins has to be taken away so that people start actually using them for things. The “dollar value” of Bitcoin has to go away, and it has to start to develop value in itself.
By looking at the current number of Bitcoins — 19 million — and comparing it to the total number of Bitcoins — 21 million — you might think that the end is fast approaching. This isn’t exactly the truth.
Though there have been 19 million Bitcoins minted, there are not currently 19 million Bitcoins in circulation. Many have lost the private key to their account, or passed away without ever sharing their wallet details, leaving the Bitcoin locked away forever.
Currently, there aren’t quick and trusted ways to pass Bitcoin from one person to another, so a shocking number of Bitcoins are lost.
Some other people might have just bought crypto as an investment, and never have an intention of using it. These Bitcoins are effectively lost, as they’ll likely only ever receive a transaction when the buyer opts to sell. But then again, they could keep it for a rainy day and end up dying before it’s ever sold.
It’s estimated that close to 4 million Bitcoins out there are lost.
These days, Bitcoin is generally mined in “blocks” rather than individual coins. This is a more effective way of measuring things.
After 210,000 blocks are mined, the reward for creating Bitcoin is cut in half. This generally happens every four years. This can happen through the blockchain, which dictates how many Bitcoins can be created.
This causes significant downturns in the number of coins that are mined every year. We also predict that will mean more independent people mine Bitcoins, as large companies are less likely to want to make such an investment.
The halving of Bitcoins also raises demand as supply is slowly diminished. It’s sort of a countdown clock until the world where Bitcoin is freely traded becomes a reality.
This is a good way to make sure Bitcoin interactions stay stable and secure because again, there isn’t one force that can come in and devalue or pump up the value of the currency.
The last halving took place in the year 2020. The next Bitcoin halving is expected to take place in 2023 or 2024.
Strangely enough, the price of Bitcoin soars after a halving. This is likely because as the supply of Bitcoins becomes more and more scarce, demand increases.
Bitcoin’s Future Price
So what’s the future of Bitcoin? How is the price supposed to develop?
Bitcoin’s price is famously very volatile. Not very long ago, it was around $70,000, and now it sits around the $30,000 range. A quick change in the news can cause it to drop or soar.
However, we have seen a steady increase in the price of Bitcoin over the years. When you take the long view, you can see why some people are so optimistic about Bitcoin.
Following the current line of data, it’s generally believed that Bitcoin could be worth over $100,000 by 2030. Check out this article on Bitcoin’s future worth.
There are a few trends that could influence the future price of Bitcoin. Depending on how the following pans out, the price can go up or down.
As we mentioned earlier, Bitcoin is unfortunately a prime target for cybercrime. The difficult-to-trace and anonymous nature of it makes it perfect for ransom money. It’s not uncommon to see cybercriminals asking to be paid in Bitcoin.
As the number of high-profile cases rises, governments might want to crack down on Bitcoin. We might see the creation of a centrally regulated cryptocurrency, distributed by the Federal Reserve.
While this would make crypto seem a lot more appealing to a lot of people, this would undermine a lot of Bitcoin’s original spirit. Since Bitcoin was created to get away from centralization and big government, many in this community would see this as a betrayal.
More Big Business Will Adopt
There’s evidence that some big companies — like Apple, Google, Meta, and Microsoft — might adopt cryptocurrency. This would also seem like a legitimizing force to many people.
Companies like these have access to vast amounts of money and people. If they start throwing resources at developing Bitcoin, the future might change quickly.
Bitcoin is a multifaceted phenomenon. As you can see, asking a simple question like “How many Bitcoins are there” leads to a complex study of what the purpose of Bitcoin is, the complex fluctuations of price, and the future of Bitcoin.
However, if you understand all of these things, you are more likely to make the right investment.