Why is the total supply of Bitcoin limited to 21 million?

3 answers

• Nov 26, 2021 · 3 years ago
  The total supply of Bitcoin is limited to 21 million as a way to create scarcity and maintain value. By having a limited supply, Bitcoin becomes more like a digital version of gold, where scarcity drives up its value. This scarcity also prevents inflation, as there will never be more than 21 million Bitcoins in existence. It's a deliberate design choice to ensure the long-term stability and value of Bitcoin.
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• Nov 26, 2021 · 3 years ago
  The decision to limit the total supply of Bitcoin to 21 million was made by its creator, Satoshi Nakamoto. This number was chosen to mimic the scarcity of precious metals like gold. By setting a finite supply, Bitcoin can avoid the pitfalls of traditional fiat currencies that can be endlessly printed, leading to inflation. The limited supply also encourages adoption and use, as people know that their Bitcoin holdings won't be diluted over time.
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• Nov 26, 2021 · 3 years ago
  The total supply of Bitcoin is limited to 21 million because of the way the Bitcoin protocol is designed. The protocol includes a halving event that occurs approximately every four years, which reduces the rate at which new Bitcoins are created. This halving event continues until the total supply reaches 21 million. The purpose of this mechanism is to gradually reduce the rate of new Bitcoin issuance and ensure that the supply is limited over time. It's a fundamental aspect of Bitcoin's monetary policy.
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