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2,5 million Bitcoins left to mine, what does that mean?

Photo of: Nathan VDH
by Nathan VDH

Are you interested in Bitcoin news? This weekend, you have certainly seen significant news (read this article if you haven’t): there are only 2.5 million Bitcoin left to mine. What does this all mean?

To put this information in context, it is significant to quickly review the Bitcoin system. The production of fiat currencies is controlled by central banks. These banks reserve the right to gamble on the production of money to maintain financial equilibrium. Thus, in times of crisis, there is often an increase in the production of money. This phenomenon is commonly referred to as “spinning the billboard”. However, the flooding of markets with liquidity is often responsible for the inflation (or even hyperinflation) observed in many countries.

For Bitcoin, things are radically different. Bitcoin’s production is limited in time and number of tokens. Specifically, it is expected that only 21 million tokens will be in circulation by 2140, after which Bitcoin production will stop. In order to achieve this goal, the production of Bitcoin is carefully regulated, in particular through Halving (see below).

The limitation of the number of BTC tokens is one of the main attractions of Bitcoin for investors. Indeed, the demand for Bitcoin is constantly increasing thanks to the establishment of a true ecosystem in more and more countries. At the same time, however, the supply is decreasing over time. As Bitcoin is a decentralized system, it is very sensitive to the law of supply and demand. This is why, for many analysts, we must expect an increase in the price of Bitcoin over time.

Approximately 18.5 million Bitcoins in circulation

Last week, ChartBTC announced in a tweet that only 2.5 million BTCs remained to be mined, or less than 12%. To date, approximately 18.5 million chips have been mined. If we look at Bitcoin’s production since its departure (in 2009), we see that the slope has been decreasing over the years. Production was very strong in the early years. Since then, it has continued to slow down until the final landing in 2140.

The halving defines the slope of the BTC production curve. Since the creation of Bitcoin, four halving operations have already taken place. Halving is a phenomenon that redefines the reward for Bitcoin miners. Indeed, for every block mined, the miners receive Bitcoin directly, making it a very juicy market.

While the reward was initially 50 BTC, it is now 6.25 BTC (since May 2020). Halving basically makes it possible to control the emission of new BTCs on the network. A halving takes place every 210,000 blocks, i.e. approximately every four years so far. The current slope of BTC production will therefore not change until the next halving scheduled for 2024.