Bitcoin Halvings
The maximum number of Bitcoins that can be created is 21 million, and this number is set in stone by the Bitcoin protocol. This means that no more Bitcoins can be created once this number is reached. This is different from traditional fiat currencies, which can be printed in infinite quantities by central banks, leading to inflation and depreciation of the currency.
The halving of the block reward is a key part of the Bitcoin protocol, and is designed to control the rate at which new Bitcoins are created. This process ensures that Bitcoin remains scarce, and that the rate at which new coins are created is cut in half every 210,000 blocks, or roughly every four years. This helps to control inflation and ensures that the value of Bitcoin does not decrease over time.
The current block reward is 6.25 Bitcoins, and this will continue to decrease as the halvings continue. As the block reward continues to decrease, the rate at which new Bitcoins are created will also decrease, further increasing the scarcity of the digital currency. This scarcity, combined with increasing demand for Bitcoin, is likely to drive the price of the digital currency higher in the future.
In summary, the limited supply of Bitcoin is a crucial aspect of the digital currency, as it gives it value and scarcity. The halving of the block reward is a key part of the Bitcoin protocol, designed to control the rate at which new Bitcoins are created, and further increasing the scarcity of the digital currency. This scarcity, combined with increasing demand for Bitcoin, is likely to drive the price of the digital currency higher in the future.
On average Bitcoin has doubled in value year on year since it’s launch in 2009.