Bitcoin has been receiving a significant share of attention since last year and this does not seem to be going away anytime soon. The previous weekend marked a great milestone for the decentralized digital currency since now it is reported that 80 percent of the cryptocurrency has been mined and is in circulation. There are only 4.2 million bitcoins left to mine which translates to the remaining 20 percent. The protocol that was put in place by bitcoin’s inventor(s) is one of the first that was based on digital scarcity which therefore means that soon enough this particular digital asset will become even harder to obtain than it already is.
So far, the capped supply and other pillars of the bitcoin framework have held on quite sturdily thanks to the miners who secure the network and have successfully managed to uphold the rules from changing with hash power. One such rule is bitcoin’s supply cap which was introduced by Satoshi Nakamoto and stands at 21 million bitcoins. However, there have been skeptics that believe that there could be a way of increasing the supply of bitcoin using manipulative tactics such as Sybil attack and 51 percent – but this is all just theoretical since in its decade-long existence no one has been able to successfully alter or break the rule on the 21 million supply cap.
What is Next?
Since there are only 21 million bitcoins, the digital asset’s limited supply will definitely make the asset harder to acquire as more people become aware of it. In nearly all cases, when an asset is limited with associated resources being harder to come by, the supply causes demand for the market. From what we can already clearly see, the supply of bitcoin shows a significant gap between the number of bitcoins in circulation and the number of people who want to get their hands on them.
Other than the obvious difficulty in accessibility that is already taking route, it is quite obvious that miners themselves are going to be forced to constantly deal with having to constantly increase their processing power. Depending on the hash rate speed, the next miner reward halving will be upon us in two years or less. The miner reward halving is part of the bitcoin protocol and it essentially means that in two years or less, instead of getting 12.5 BTC for every block that miners mine, they will get 6.25 BTC. It is a network consensus agreement that requires that halving is done every four years but everyone is bound to feel the pinch as it will be very difficult to obtain bitcoin even with the large data processors available in various warehouses all over the world.