Introduction
The other day I wrote a post about my first interaction with Bitcoin, it was a lengthy post that a lot of people showed love towards it. Now I think I should write more about Bitcoin and my experiences with Bitcoin.
I know there are hundreds and thousands of posts and articles and news reports, but what's unique in this post is that it's my point of view, my thinking, and my opinions about this amazing technology called blockchain and Bitcoin.
The Big Question About Bitcoin’s Supply
Today I'm going to talk about one of the most important questions that arises once someone learns about Bitcoin. One of the most important aspects of Bitcoin is that it has a very limited supply. The supply of Bitcoin is 21 million tokens and more tokens can never be created.
This often confuses newbies because they think that anything that has been created by a computer can change and have different set of values. They think it can be changed to, let's say for example, 1 billion bitcoins. Can there be 1 billion bitcoins? If not, then how is it protected, and how can someone try to change the supply of Bitcoin if they ever want to change it?
Bitcoin vs Fiat Currency Supply
Since Bitcoin is considered a currency, any currency that is launched into the market for people's use must have a supply. Bitcoin has a limited supply. If you go and look at other real-life currencies, or fiat currencies as people call them, they have unlimited supplies.
You can go and print any number of US dollars. The government of the particular country has the right and control over how much money is printed and how the inflation and deflation is managed. Bitcoin is not exactly like a currency because it has a limited set of coins that can ever be created.
A lot of people try to compare Bitcoin with gold, but I don't think that you can ever compare Bitcoin to gold 100% because there are many different things and many different aspects in Bitcoin that are completely different from gold.
Unlimited Supply of Fiat
Most created currencies in the world have unlimited supply. You can create unlimited amount of money. For example, if you live in the United States, then the Federal Reserve creates the currency. They can create, technically, as much money as they want.
Some sources online say that half of all money ever printed in the US was printed in the last 4-5 years. Why? Because inflation, prices of things change, debt increases, and a lot of other economic factors affect the price and the printing of money.
Whereas Bitcoin is fixed. It can't be created more than 21 million once ever. Gold, on the other hand, is not unlimited. It is a rare earth metal but, technically, there is an unlimited amount of supply. But the entry barrier is the cost and struggle of mining gold from the earth.
Four Points to Discuss
In the next part of this post, I want to talk about a few things.
1: Unlimited fiat supply
2: The inflation factor
3: Bitcoin’s fixed cap
4: Gold supply myth
Unlimited Fiat Supply in History
Let's start with point number one. The fiat currency that we have has an unlimited supply. There are many factors that make the government print more money. I'm not going to talk about all the factors today, but let me go back in time and give you an example of how currency was different a hundred years ago or 200 years ago than what it is now.
A few hundred years ago, people used different forms of money that was precious to them. Gold, silver, bronze, iron, and cowry shells were used as currency. Gold was used because gold is precious. Gold has a limited supply. Gold takes a lot of time, energy, and skill to mine, to purify it, and to produce a finished product.
Silver is easy to mine, but it has similar issues like gold. Bronze also has similar issues, and iron is too cheap and people might end up printing their own money. Cowry shells were once used in many parts of the world as a form of currency, but eventually they stopped because cowry shells can be found in different seas, and people could easily find them and use them as currency.
It wasn't completely rare, and it wasn't completely limited or secret. So they all had to stop. Gold was the major currency of the world across history.
The Inflation Factor
All governments across the world who use fiat currencies can print as much money as they want. They don't print a lot of money because the more the supply, the less the value. That is why they don't print a lot of money.
But even then, once in a while they print a lot of money. Like I said earlier, half of all the printing of US dollars has happened in the last few years. The government can decide when to print, how much to print.
This has led to hyperinflation in a few countries. Zimbabwe and several parts of Africa have faced hyperinflation. Iran is one of the countries that comes to my mind when talking about hyperinflation.
Some of the countries across the world have hyperinflation. If I remember correctly, Zimbabwe had currency notes that were valued at hundreds and thousands of millions of their local currency. If you compare that to the US dollar, it only cost one dollar or less.
There have been videos of people across the African subcontinent where people go out for grocery shopping with a cart full of cash. Why did that happen? Because they had hyperinflation. The cost of daily goods and everything was increasing so fast that they had to print more and more money. That's why the currency lost its value.
Bitcoin’s Fixed Cap
Coming to the next point — Bitcoin's fixed supply or Bitcoin's fixed cap. When the creator of Bitcoin was thinking about the number of coins that Bitcoin should have, Satoshi Nakamoto, the legendary anonymous creator of Bitcoin, thought and gave a random number 21 million bitcoins.
He has talked about this in emails with colleagues and the emails are public. They decided the 21 million mark so that it's not too much and it's not too little. If it is supposed to be used as a currency, an alternative to maybe the US dollar, then Bitcoin should have a limited supply.
Satoshi Nakamoto’s Vision
In many of his emails he talked about various things of the Bitcoin architecture. One of the insights he gave in one of the emails was about how the value of Bitcoin is used or mentioned inside the code and how it can be interpreted in real life.
In his email you can clearly understand that he wasn't completely unaware of what was going to happen in future. He was anticipating that someday the value of Bitcoin would skyrocket and people would rush to buy it. He had that in mind.
Source: https://mmalmi.github.io/satoshi/
He was anticipating, although he mentions that he doesn't know the future. But he knew, he had that feeling, and that's why he is the amazing creator of Bitcoin.
Bitcoin vs Gold Supply
Many of the videos and articles about Bitcoin vs Gold often miss the point. They think that Gold is similar to Bitcoin. A lot of people try to compare that and nicknames have been given to Bitcoin such as Digital Gold and Future Gold.
But is it really the same? In my opinion, it is not. For a layman, yes, both can be compared. But when you have spent as much time as I have, you shouldn't be called a layman.
As someone who has been using, talking, and reading about Bitcoin forever, I think that Bitcoin is different to Gold's supply. People say that Gold has limited supply, but that's not the case. Gold has an entry barrier.
It takes a lot of energy, manpower, effort, and there are a lot of risks when mining Gold. Gold is technically infinite. Humans have been mining Gold forever and I have never heard anyone say that Gold's supply has finished.
There is always some other mine where there is a lot of Gold supply. There is always some other river which has some Gold. There is always some Gold hidden beneath rocks, in layers of sand, layers of soil, in trees and everything.
I also once read I don't know if it's true or not that there is a planet somewhere where there is abundance of Gold. Technically, Gold's supply is unlimited. Bitcoin's supply is limited to 21 million Bitcoins.
So, you get the point, right? Or do you want me to explain it further?
A Question for You
In the end, let me ask you a question. Have you ever invested in Bitcoin? If you have invested, then please tell me why. If you haven't invested, then what are you waiting for and why haven't you taken the right decision yet?
Bitcoin, fiat currencies, gold, barter system, bonds and shares, and everything in the world have their own unique selling point. Bitcoin's selling point is not just one. There are many selling points.
One of the selling points that sold me to Bitcoin is that Bitcoin is the next generation of money. Bitcoin is layman's money.
Can Bitcoin’s Supply Be Changed?
To summarize one of the points if someone can ever change the supply of Bitcoin let me take a few paragraphs and write about this.
The Bitcoin is decentralized. It's a network that is run by hundreds of thousands of people across the world. Bitcoin's protocols, rules, and laws are governed independently.
Bitcoin is an open source tool. Each person that runs a node has a limited say in the governance of Bitcoin. There are hundreds of thousands of miners and node runners who take these small decisions about Bitcoin.
So, if a majority of these node operators, miners, decide that the supply of Bitcoin will not be limited to 21 million, then it can be changed. There is a huge possibility.
Technically, it's not quite easy. It takes a lot of effort, a lot of things. But, in a general sense, just from educational information, you can assume that the supply of Bitcoin can be changed.
It takes consensus of hundreds and thousands of node runners who decide what goes into Bitcoin and what doesn't.
Final Thoughts
In the end, let me ask you this one question. Aren't you fascinated with Bitcoin and aren't you happy that Bitcoin has a limited supply? Which means that if you buy a Bitcoin, someday, your great-great-grandchildren can buy hundreds and thousands of acres of land with just one tiny, measly Bitcoin.
P.S: All images were created using Google Gemini AI.