The Allure and Limitations of Bitcoin’s Supply
The allure of Bitcoin, the first and most famous cryptocurrency, has grown significantly since its inception in 2009. Many see it as a revolutionary way to handle and store value, outside of traditional banking systems and free from governmental oversight. A common topic of discussion revolves around the limited supply of Bitcoin and how this scarcity can influence its demand and value. To understand the depth of this scarcity, let’s delve into the total number of Bitcoins available and the implications for the world’s millionaires.
The Finite Supply of Bitcoin
Bitcoin’s design ensures that there will never be more than 21 million coins in existence. As of my last training data in September 2021, over 18.8 million Bitcoins have already been mined, leaving fewer than 2.2 million yet to be introduced into circulation. This release occurs roughly every ten minutes with the mining of a new block on the Bitcoin blockchain, but it’s important to note that the reward for mining is halved approximately every four years. This event, known as the “halving”, ensures that the last Bitcoin won’t be mined until around 2140.
Lost Bitcoins
An additional nuance to consider is that of the existing Bitcoins, a significant portion has been lost forever, either due to misplaced private keys, forgotten wallets, or deliberate destruction. Some estimates suggest that around 3-4 million Bitcoins are lost, though the exact number is tough to pin down. This reduction further limits the already scarce supply of available Bitcoins.
The World’s Millionaire Population
According to a report by Credit Suisse Global Wealth Report 2022, it is estimated that there were 62.5 million millionaires at the end of 2021, up 5.2 million from a year earlier that is 2020. This number has likely grown due to various economic factors, but let’s work with this conservative estimate. If we divide the total number of Bitcoins by the number of global millionaires, there are significantly less than one Bitcoin available per millionaire, even if we don’t account for the lost coins. In reality, considering the lost Bitcoins, the available amount is even lower.
Distribution of Wealth in Bitcoin
However, owning Bitcoin isn’t an evenly distributed affair. Many early adopters and investors hold vast amounts of Bitcoin, often referred to as “whales”. This uneven distribution means that even if every millionaire decided they wanted a piece of the Bitcoin pie, many would be left wanting.
Conclusion
Bitcoin’s finite supply, coupled with the lost coins and its current distribution, illustrates a striking point about its scarcity: even if every millionaire in the world wanted to own a Bitcoin, they couldn’t. This scarcity is one of the many factors contributing to Bitcoin’s appeal and value, emphasizing the uniqueness of its design in the world of finance. Whether one views Bitcoin as a speculative asset or the future of decentralized currency, its limited supply undeniably plays a significant role in its story.