This weekend marks a milestone in the history of bitcoin, as now 80% of the most popular cryptocurrency is mined and already in circulation. The protocol of Satoshi Nakamoto became one of the first to experience a digital shortage, and soon enough the digital asset will become even more difficult to obtain.
There are only 4.2 million bitcoins left
80 percent of the total supply of bitcoin was repaid. Until January 13, 2018, 16’800’000 coins were found, and only 20% remained in a search by miners. When Satoshi Nakamoto introduced the protocol of bitcoin to the public, having launched the code in 2009, the cryptocurrency appeared with a limited offer.
The proposal will never be increased because Nakamoto set a limit of 21 million bitcoins, which can ever be found. As long as the creator’s plan and the miners processing the network have successfully secured this rule by changing with hash power. However, skeptics believe that theoretically there may be a way to increase the offer with manipulative tactics, such as an attack of 51%. As the life of the digital asset approaches the decade, no one has been able to violate the rules of the network and the offer limit of 21 million coins.
* Chart Bitcoins mined coins
Solving the problem of the general
Satoshi solved one of the most difficult computational equations – the problem of the Byzantine general – a lack of security, which for decades has not been the chalk of solutions in the circle of scientists. In fact, the problem is related to distributed networks, because the problem leads to certain errors or security flaws, which makes it easy to attack the network. This, in turn, makes it difficult to create a protocol that creates proof of solvability in the network.
With the solution of this problem – the creation of the PoW algorithm in the original Bitcoin protocol – the network became safe due to the fact that the attacks became too expensive and time-consuming. For the first time in the world of digital computing, Satoshi introduced an object that could not be copied or double-spent. At the same time, he limited the offer, which also introduced a digital shortage, as well as other technologies.
Since there are only 21 million bitcoins, the limited availability of cryptocurrency, it becomes rare and expensive. In most cases, when an asset is limited to a growing supply causes demand in the market. The supply of bitcoin has a significant gap between the number of coins and those wishing to receive them. The vast majority of network users believe that digital shortage will make bitcoin more valuable over time.
In addition to the difficulties of mining coins, the miners will have to constantly increase their computing power. Over the next two years, the reward for the newfound block in the network will decrease. This means that the miners currently receiving 12.5 BTC for each new block will pass a reward at 6.25 BTC in less than 2 years.
An agreement on consensus in the network, with a twofold reduction in reward every four years, will make bitcoins even more valuable. Each major mining center, with the most advanced equipment, will have to increase capacity to continue the cryptocurrency. Of course, the price for bitcoin is also likely to increase.
100 billion Ripple coins
Another thing that should be taken into account when observing an extensive blockchain environment is that the creation of Satoshi, in contrast to 1’300 other crypto-currencies, has only 21 million coins.
Other digital currencies have billions of coins in circulation and billions of people use other less-proven consensus mechanisms, such as Proof-of-Stake. Thus, as a matter of fact, the inventor of bitcoin created something unique and different from the digital goods that we all use today. Unlike music on your player or digital movies, bitcoins can not be copied.
This weekend was marked by the fact that 16.8 million coins of bitcoin had already been mined and a large number of them had been lost. In the opinion of crypto investors, the fineness of coins of bitcoin makes the digital asset the most valuable thing that the world has ever seen.