Bitcoin is a popular digital currency having an enormous market value, trading volume, and market cap. The fact might amaze you that bitcoin touched the $1 trillion market cap milestone in just 11 years. The entire cryptocurrency market cap is $2 trillion, and bitcoin contributes almost half of it.
Satoshi Nakamoto, a Japanese programmer, invented bitcoin and released the foremost software in the year 2009. However, before releasing the first-ever bitcoin software, he mined a block popular as the genesis block, the first-ever block of bitcoin. The first-ever block of the blockchain contains information regarding the foremost transaction of the bitcoin complex.
After releasing bitcoin’s software, Satoshi Nakamoto transferred 100 bitcoins to the inventor for proof of work. The store value of a single bitcoin unit is enormous, which is why bitcoin trading and investment progression are very profitable. You can check websites like bitcoin profit for making a gigantic buck in your bitcoin trading journey. However, Satoshi Nakamoto is a mysterious identity, and no one is familiar with his identity at the instance.
He issued a finite supply of bitcoin units, and the store value of these units at the instance of bitcoin’s release was zero. You may wonder why Satoshi Nakamoto issued a finite supply of bitcoin. Let’s find out the reasons behind a finite supply of bitcoin units.
Understanding Bitcoin
Bitcoin is a cryptocurrency having cryptographic cash, peer to peer network, and a blockchain. Blockchain stores information regarding bitcoin transactions, peer to peer network ensures a decentralized communication between sender and receiver.
Satoshi Nakamoto created bitcoin after ample digital currency models. The white paper of bitcoin contains every possible fact regarding the bitcoin unit. The white paper has helped several people and tech-heads understand the basic concept and technologies of bitcoin.
Why was Satoshi Nakamoto issued a finite supply of bitcoin units?
You are familiar with Satoshi Nakamoto’s decision to work on a decentralized cryptocurrency after the economic abysmal 2007. Satoshi Nakamoto noticed that government authorities and federal banks could not control their nation’s inflation rate due to an infinite supply of fiat currencies.
Inflation is a drastic change in the supply chain of fiat currencies, which further hikes the nation’s value of goods and services. So, Satoshi Nakamoto decided to create a decentralized cryptocurrency with a whole peer-to-peer network and a finite supply.
However, Satoshi Nakamoto was also not familiar with whether bitcoin will acquire such store value in the future. So, to sum up, Satoshi Nakamoto issued a finite supply of bitcoin to mitigate the concept of inflation.
Is bitcoin halving also declining the rate of inflation?
Bitcoin halving is a crucial aspect of the bitcoin complex. Bitcoin halving refers to a leap year event that declines the block reward of bitcoin mining by half every four years. Since bitcoin mining is the action of maintaining bitcoin’s supply, bitcoin halving decreases the supply of bitcoin units.
According to rich sources, bitcoin halving is correspondingly declining the rate of inflation in the bitcoin complex. The fact that might amaze you is that the bitcoin complex’s inflation rate was 55%. However, after the last bitcoin halving, the inflation rate in the bitcoin complex is 1.14%. So, in a nutshell, Satoshi Nakamoto succeeds in mitigating the concept of inflation from the bitcoin complex.
How many bitcoin units are there?
Satoshi Nakamoto issued a finite supply of 21 million bitcoin units. The fact might amaze you that bitcoin miners have already mined 90% of bitcoin’s supply. According to rich sources, bitcoin miners will mine the last ever bitcoin unit in 2140.
Can Anyone Expand this finite supply?
Satoshi Nakamoto created bitcoin for the public and to make us free from the government authorities. So yes, this finite supply of bitcoin units is expandable. As per rich sources, if most bitcoin holders vote to increase or expand the finite supply of bitcoin units, it will increase automatically.
However, no savvy investor or holder will vote in favor of increasing the supply of bitcoin units as it will decline the store value of bitcoin units to an exceeding extent. Moreover, Satoshi Nakamoto is also holding one million bitcoin units and these units are illiquid which means he has been holding these units for a very long time.
The portion mentioned above demonstrates why Satoshi Nakamoto issued a finite supply of bitcoin units.