Bitcoin has clocked in an important milestone over the weekend when miners confirmed to have collectively mined 16.80 million of the limited supply of 21 million coins. As such, there is only 4.20 million bitcoins, or 20%, left before the network reaches its 21 million supply cap.
The concept of the limited supply of coins was introduced by the founder of bitcoin, Satoshi Nakamoto. In the cryptocurrency's 2008 whitepaper, the supply cap was chosen in order to introduce the idea of digital scarcity. In turn, the scarcity would ensure a robust price, especially when the network moved closer towards reaching the supply cap. If the supply is limited, the demand is likely to increase accordingly, which will boost the value of the cryptocurrency. Once the supply cap has been reached, prices are likely to skyrocket, as it will become more difficult to obtain bitcoin.
At the moment, bitcoin miners receive 12.50 bitcoins for every mined block. However, the system introduced by Satoshi Nakamoto also entails that the mining reward becomes halved every 21,000 mined blocks, which roughly corresponds to a period of four years. The next reward halving is scheduled to take place around June 2020, which means that miners will receive 6.25 bitcoins for every mined block at that time.
Not all cryptocurrencies operate as per bitcoin’s mining protocol. Certain cryptocurrencies have been developed where the entire supply is constant (i.e., deflationary cryptocurrencies). In these instances, no new coins are created. Cryptocurrencies that utilize this deflationary concept include EOS, ripple, waves, IOTA, stratis, NEM, lisk, NEO, omisego, and qtum.
Despite the impending supply cap, some have argued that it is theoretically possible to increase the bitcoin supply cap of 21 million using either a 51% attack, or a Sybil attack. Nevertheless, it is not yet clear how feasible either of these techniques might prove when it comes to the Bitcoin network. The Ethereum-based cryptocurrency, krypton, previously witnessed a 51% attack in August 2016. Since then, no similar attacks were encountered in the cryptocurrency continuum.
The concept of the limited supply of coins was introduced by the founder of bitcoin, Satoshi Nakamoto. In the cryptocurrency's 2008 whitepaper, the supply cap was chosen in order to introduce the idea of digital scarcity. In turn, the scarcity would ensure a robust price, especially when the network moved closer towards reaching the supply cap. If the supply is limited, the demand is likely to increase accordingly, which will boost the value of the cryptocurrency. Once the supply cap has been reached, prices are likely to skyrocket, as it will become more difficult to obtain bitcoin.
At the moment, bitcoin miners receive 12.50 bitcoins for every mined block. However, the system introduced by Satoshi Nakamoto also entails that the mining reward becomes halved every 21,000 mined blocks, which roughly corresponds to a period of four years. The next reward halving is scheduled to take place around June 2020, which means that miners will receive 6.25 bitcoins for every mined block at that time.
Not all cryptocurrencies operate as per bitcoin’s mining protocol. Certain cryptocurrencies have been developed where the entire supply is constant (i.e., deflationary cryptocurrencies). In these instances, no new coins are created. Cryptocurrencies that utilize this deflationary concept include EOS, ripple, waves, IOTA, stratis, NEM, lisk, NEO, omisego, and qtum.
Despite the impending supply cap, some have argued that it is theoretically possible to increase the bitcoin supply cap of 21 million using either a 51% attack, or a Sybil attack. Nevertheless, it is not yet clear how feasible either of these techniques might prove when it comes to the Bitcoin network. The Ethereum-based cryptocurrency, krypton, previously witnessed a 51% attack in August 2016. Since then, no similar attacks were encountered in the cryptocurrency continuum.