Daily Archives: 17. December 2018

Bitcoin loophole – How many Bitcoin are there?

The highest number of Bitcoin is limited to just under 21 million Bitcoin (exactly: 20,999,999.9769 BTC). The maximum amount of money is defined in the Bitcoin code. Changing it requires a broad consensus of the network. This makes Bitcoin a finite resource. The last Bitcoin is expected to be mined in 2140.

The special feature of the Bitcoin is that it is both digital and rare. Digital files can be copied as often as you like – Bitcoin is different. Satoshi Nakamoto defined the amount of Bitcoin before the Genesis block, the first Bitcoin block. This limit is one of the most important properties of the crypto currency.

Why is Bitcoin loophole limited to 21 million?

Satoshi Nakamoto based his distribution of Bitcoin loophole on the precious metal gold according to Bitcoin loophole. Initially, when all gold was still in the earth, it was found relatively frequently. But the more gold was mined, the less remained in the ground. Since gold is a finite resource on earth, you will find less and less gold in the ground over time – this is very similar with Bitcoin.

Satoshi Nakamoto has never said why the release of Bitcoin began at 50 Bitcoin per block and halved every 210,000 blocks. In principle, these constants are also no longer relevant for the functioning of Bitcoin. The only important thing is that the release of new monetary units is written into the computer code so that all participants know these parameters and this rule cannot be broken.

A comparison between Euro and Bitcoin

The biggest difference between Euro and Bitcoin is probably the decision-making authority. The European Central Bank (ECB) can increase and decrease the money supply of the euro and has the last word. There is no comparable authority in the Bitcoin ecosystem. Instead, the network finds consensus through individual decisions. Participants have full sovereignty and can decide to change or leave the network.

The second difference is that the amount of all Bitcoin mined can be determined at any time. With the euro, on the other hand, the amount of money can only be estimated. In addition, a distinction is made in fiat currencies between different amounts of money.