Bitcoin’s supply is limited to 21 million BTC. This makes it the only absolutely finite asset that exists.
Why it was 21 million BTC, of all things, can only be speculated. One possible explanation is meme number 42 (from Douglas Adams’ “The Hitchhiker’s Guide to the Galaxy,” of course), half of which is 21. But it could also have been pure arbitrariness that led the anonymous Bitcoin father Satoshi Nakamoto to restrict his digital level, peer-to-peer cash system to 21 million units.
Although they have sparked speculation, ultimately the motives are irrelevant. The only important thing is that there is this upper limit of 21 million BTC. Because with BitcoinFor the first time, humanity has an asset at hand, the offer of which is at last.
It can be said so clearly: the invention of digital scarcity is nothing less than a millennium innovation. There are goods that are also in short supply. Examples of this are, of course, limited raw materials such as gold or oil. However, when you broaden your perspective beyond the confines of planet earth, suddenly the yellow precious metal is no longer rare. So there can only be an absolute scarcity in digital space. However, creating an absolute digital scarcity is not an easy endeavor. On the other hand.
Bitcoin is only limited to 21 million coins as network participants agree on it. The original Satoshi code provides the limit. However, the code can be changed. Ultimately, therefore, it is not the code that is decisive for Bitcoin, but the social consensus on which the system is based. After all, 21 million Bitcoin are just the rules of the game Bitcoiner have agreed. It would not be a problem to make a coin, for example through a hard fork, whose supply is limited to 20 million or less. However, this does not automatically make this coin tighter in the truest sense of the word as there are no players.
The chess game analogy is therefore popular with Bitcoiners. You can change the rules of the game of chess, but what is missing is the players. Chess is a game that has matured socially over centuries; Their cultural significance is unique. Nobody would think of introducing a new set of rules.
The analogy is also good because it shows how long it actually takes to build social consensus. Chess, for example, has been established in Europe since the early 13th century – its tradition is likely much older in Asia and Persia.
In comparison, Bitcoin is still in its infancy. Digital gold is only eleven years old – and has come astonishingly far for that time.
As mentioned earlier, the cap limit is only worth as much as the social class that enforces it. And that aspect is crucial.
Bitcoiners can use a full node to actively decide which protocol rules to follow. Hence the saying ” Do not trust, check! “. There are 21 million BTC precisely because Bitcoiners decided to install exactly the software that the limit offers. This aspect of decentralized control is particularly important when it comes to money. After all, history has shown that there is a monopoly on the creation of money always led to the use of benefits and inflation. Control of the cash tap is too tempting a tool to leave it untouched.
It is precisely this social protective layer that Bitcoiners create around their favorite money that is repeatedly referred to as “toxic maximalism” on social media. The operation of full knots and the defense of BTC Content is exactly what gives digital gold its value. Michael Saylor sees it similarly:
I don’t want to hear that you want to get upset about the transaction fees and introduce smart contracts and change everything. […] I want to hear that you are defending the network to the death against someone who wants to break it or compromise it in any way.
Saylor was quoted in an interview with Pomp.
And that is exactly it: Bitcoin is limited to 21 million coins as there are a critical number of Bitcoiners who want just that and express their will through full nodes. It’s that aspect of decentralization that perhaps makes Bitcoin man’s best store of value history.
P.S. You can support me for Free Via ALL of these links and earn Crypto / Money yourself! https://allmylinks.com/zealdorn
Disclaimer: These lines are not a substitute for investment advice. Investing in the crypto market is at your own risk. Invest only as much as you are willing to lose. I receive commissions for purchases made through links in this post.