What is the significance of the 21 million limit on the total number of bitcoins in circulation?

3 answers

• Feb 19, 2022 · 3 years ago
  The 21 million limit on the total number of bitcoins in circulation is a fundamental aspect of Bitcoin's design. It ensures scarcity and helps maintain the value of each bitcoin. By limiting the supply, Bitcoin becomes a deflationary asset, which means that over time, its value is expected to increase. This scarcity also makes Bitcoin resistant to inflation, unlike traditional fiat currencies that can be printed without limit. The 21 million limit is a key feature that distinguishes Bitcoin from other cryptocurrencies and makes it a store of value.
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• Feb 19, 2022 · 3 years ago
  The 21 million limit on the total number of bitcoins is like a built-in safeguard against inflation. With a fixed supply, Bitcoin cannot be devalued through excessive printing or manipulation by central authorities. This gives users confidence in the long-term value of Bitcoin and makes it a popular choice for those seeking a hedge against traditional financial systems. The limited supply also creates a sense of urgency and FOMO (fear of missing out) among investors, driving up demand and potentially increasing the price of Bitcoin.
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• Feb 19, 2022 · 3 years ago
  The 21 million limit on the total number of bitcoins is a rule that is hard-coded into the Bitcoin protocol. It was put in place by Bitcoin's creator, Satoshi Nakamoto, to ensure that there would never be more than 21 million bitcoins in existence. This limit is expected to be reached around the year 2140. Once the limit is reached, no new bitcoins will be created through mining rewards. Miners will then rely solely on transaction fees to secure the network. This limit adds a level of predictability to the Bitcoin ecosystem and helps maintain its decentralized nature.
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