Bitcoin's limited offer is about to be a bit more limited. Unless an unforeseen event occurs, it is likely that bitcoin 17 million will be extracted within a few days, that is shown by data from Blockchain.info, a development that would mark another milestone for the first cryptocurrency in the world. That's because according to the current rules of bitcoins, only 21 million bitcoins can be created.
Taking a step back or remembering a bit, the milestone, the first million bitcoin marker to be extracted was in mid-2016, it is perhaps worth mentioning as another reminder of the main achievement of computer technology: the digital shortage created and enabled by shared software.
In summary, the bitcoin code, since it was cloned and adapted by dozens of other upstart cryptocurrencies, ensures that only a certain number of new bitcoins are entered into its economy at intervals. Miners, or those who operate the necessary hardware to track the set of bitcoin transactions, are rewarded with this scant information every time they add new entries to the official registry.
In such a way, there are many variables in the process. It is noteworthy that one can not predict with precision when bitcoin 17 million will be extracted or who will extract it, due to the many minimum variations that are created to maintain a common synchronized software. That said, there is a relative predictability. Each bitcoin block produces 12.5 new bitcoins, and since bitcoin blocks occur approximately every 10 minutes, about 1,800 new bitcoins are created each day.
As such, it might be better to see this event as a "psychological barrier," Tetras Capital's founding partner, Alex Sunnarborg, told CoinDesk, one that is interpreted differently by diverse communities.
Sunnarborg, for example, sought to emphasize that another way of interpreting the result is that 80 percent of all the bitcoins that will be created have been extracted. In other words, only about a fifth of the final supply remains for miners and future buyers.
Others see the milestone as one that is ripe for the appreciation of technology and its achievements.
He told CoinDesk: about the next milestone "I think it's amazing," said Tim Draper, the venture capitalist who bought millions of bitcoins seized by the US government. UU At an auction in 2014. He added the following: "I bet the founders would not have imagined in their wildest dreams, how important Bitcoin would become."
Put another way with words. Others sought to suggest that the milestone is one that should be considered as an opportunity for education about the characteristics of bitcoin, and those of cryptocurrencies in general terms.
For example, unless all humans operating the computers running the bitcoin software decide to make a change (a scenario that is perhaps unlikely today), there is really no way to introduce more new bitcoins. This achievement, a technical reality, has played a key role in the association of bitcoin with money, the economy and other scarce and natural assets.
In this way, the goldbugs and readers of the Austrian economy who piled up or accepted bitcoin from the beginning quickly realized the value of the feature, perhaps giving rise to the term "cryptocurrency" itself.
Trace Meyer, one of the most vocal or active members of this group, summarized the philosophy in a recent tweet, in which he argued that governments could try to prevent users from retaining bitcoin in the future.
He also wrote the following: "The increase in the supply of money is a means to confiscate through inflation, which is a form of taxes without representation or due to a legal process." Clear with indebtedness laws, which is ultimately a tax, which translates into very perverse inflation for the working people.
Even the new way in which bitcoins are born, called "mining", is a nod to the analogy of gold.
Instead of being issued by a Central Bank, bitcoin is created by a network through the maintenance work of the blockchain. When a miner finds a valid hash for recent transactions, resolving the riddle of the bitcoin protocol, he is rewarded with a "transaction based on currencies", credited to his account in bitcoins.
That is, a bit of cryptocurrency is created and deducted from the final supply.
Therefore, there is the Bitcoin supply curve. The way in which the participants have been rewarded, of course, has changed over time.
When the founder of bitcoin, Satoshi Nakamoto, extracted the first bitcoin block on January 3, 2009, he created the first 50 bitcoins. This reward stayed the same for another 209,999 blocks, when the first "halvening" or reduction of rewards took place.
It was not a surprise. Every 210,000 blocks, according to a coded schedule, the network reduces the block's reward by 50 percent. After the last capture, in July 2016, the reward is 12.5 bitcoin.
That means that while there are only 4 million bitcoins left in the mine, the network will not reach its final supply in anything like the nine years it takes to get here. As Halvenings halven stagnate, the monetary inflation rate (supply growth) slows down.
Assuming that the bitcoin protocol remains the same (a new block is extracted every 10 minutes on average and the half program and the supply limit are not modified), the last new bitcoin will not be extracted until May 2140.
What will happen in the next 120 years? With this in mind, the table suggests another common point of conversation when recognizing the milestone: that the bitcoin is programmed to run for a long time.
Jameson Lopp, chief infrastructure engineer who is the purveyor of household wallets, hastened to remind CoinDesk that bitcoins are divisible, and that, as such, the smallest parts of each bitcoin can have a seemingly infinite value.
He said the following: "While 17 million BTCs may seem like a lot, it is incredibly scarce, there will not even be enough for each current millionaire to have an entire bitcoin. Fortunately, every bitcoin is divisible by 100 million satoshis, so there will always be enough to walk! "
As you will remember, there are also other peculiarities in the software. On the one hand, bitcoin will never really reach 21 million units, since unless there is a protocol change, the total supply will not reach at least one satoshi. This is because on May 17, 2011, the miner "Midnightmagic", for reasons that are still not understood, claimed a reward per block of 49.99999999, instead of 50. That was the value paid, quite a rarity.
In addition, to be clear, Bitcoin does not stop working when 21 million bitcoins are produced. At that time, the idea is that the miners would be compensated only through the rates, which they already charge. Although some scientists have tried to project if such a market would work in practice.
With so many unanswered questions, in any case, the event serves as a new reminder of how far Bitcoin has come, and how far it should go.
In the words of long-time developer Adam Back: "Another million down four more to go".
In summary the ecosystem of blockchain-bitcoin has a long way to go and many contributions to give to society, is built from the innovation of the human being, new ways of seeing the economy and the finance industry, still waiting for changes of paradigms to improve everyone's quality of life. It waits for new announcements.
Reference: coindesk.com
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