Bitcoin has reached an important milestone: passing the 19 millionth Bitcoin mining mark, the moment when the last new bitcoin will enter the world is getting closer and closer. As soon as the currency was created, Satoshi Nakamoto decided to limit the quantity of bitcoins to 21 million.
Bitcoin was created to be money with a fixed supply that no one can change. The first bitcoins were mined in 2009, during the Great Recession.
The Great Recession was a period of sharp general decline (recession) observed in national economies globally between 2007 and 2009. The extent and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that this was the most serious economic and financial crisis since the Great Depression. One of the results has been a serious disruption of normal international relations.
The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, as well as a series of trigger events that began with the bursting of the US housing bubble in 2005-2012. When house prices fell and landlords began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007-2008, leading to the collapse or bailout of many of them. them in September 2008.
One of the most important characteristics of Bitcoin is the limitation of the number of Bitcoins in circulation. The creation of new Bitcoins is predictable and transparent to everyone. This differs from traditional banking, where central banks can continue to print more money, almost without limitation.
One of the important terms in the world of Bitcoin, which relates to the supply limit, is what is called the block halving.
The total supply of BTC is limited and predefined in the Bitcoin protocol at 21 million, with the reward for mining (how Bitcoins are created) decreasing over time. This graph shows how many Bitcoins have already been mined or put into circulation.
A message can be added to each piece of transactions validated by the bitcoin network. In that first block, which was undoubtedly mined by Bitcoin’s creator, Satoshi Nakamoto, the message read: The Times 03/Jan/2009 Chancellor on the brink of a second bank bailout. This is understood both as evidence that the block was released on the earliest day the headline was published (The Times is a British daily newspaper) and also as a commentary on the global financial system.
Coins will be released at a scheduled rate, through rewards in the form of blocks. A block reward is an amount of Bitcoins that miners receive as a reward for their work. Miners maintain and secure the Bitcoin network, primarily by adding new blocks full of transactions to the blockchain. This is crucial and important work, which is why it is rewarded.
At the moment, the block reward is 6.25 Bitcoins for each block, which is worth more than a quarter of a million euros at current prices (262,582 euros). These are newly created Bitcoins that are added to the current supply. The block reward is halved approximately every four years. This period is then called Bitcoin block halving. This halving occurs every 210,000 blocks. The operation of a block takes on average ten minutes, so we can estimate that there is a block of Bitcoins halved approximately every four years. This will continue until 21 million Bitcoins have been mined.
Once 21 million bitcoins have been mined, it will no longer be possible to mine new currencies. The Bitcoin code, as described in the cryptocurrency white paper, does not allow new tokens to be added once this threshold is exceeded. According to experts, it will be necessary to wait until 2140 for the ultimate Bitcoin to be extracted by a mining farm.
After the last block of Bitcoins has been halved, miners will no longer receive a block reward. At this point, they will only earn Bitcoins through transaction costs. This means that transaction costs will play a bigger role in the future.
Once a pre-determined number of coins have been put into circulation, the incentive can be funded entirely by transaction fees and no longer require inflation,” Satoshi Nakamoto explains in the white paper. In an email exchanged with other key players in the Bitcoin network, he then clarified that the total circulating quantity will be 20,999,999.9769 coins.
One can wonder if the real supply, that is to say the number of bitcoins currently in circulation on the market, is in fact 19 million. Many bitcoins have been lost for various reasons, the problem is that there is no way to know exactly how much. According to a study by Chainalysis, a company specializing in blockchain analysis, more than 20% of the 19 million existing bitcoins are also blocked on lost wallets. Many investors have indeed lost access to their supply of cryptocurrencies. Other holders have kept their currencies carefully in wallets for several years.
We can cite the case of Stephen Thomas, a developer of German origin living in San Francisco, who had two more chances last year to find a password that was valid at the beginning of 2021. These two attempts would have allowed him to unlock a hard drive , called IronKey, containing the private keys of a digital wallet containing 7,002 bitcoins (about 294 million euros).
As a reminder, IronKey is the brand name of a family of portable encrypted USB storage devices belonging to Kingston Digital, the flash memory subsidiary of Kingston Technology Company Inc. Thomas lost the paper where he had not the password to its IronKey hard drive, which gives users ten chances before it locks up and encrypts its contents forever. He had already exhausted 8 of them, which means that after two more wrong attempts, he will lose his bitcoins.
In January 2021, Wallet Recovery Services, a company that helps find lost digital keys, said it received 70 requests a day from people who wanted help recovering their belongings, three times more than the previous month. Bitcoin owners stripped of their wallets speak of endless days and nights of frustration. Some of them are said to have owned Bitcoin tokens since its inception ten years ago, when no one had confidence in the value of these digital coins. “Over the years, I’d say I’ve spent hundreds of hours trying to track down these wallets,” said Brad Yasar, an entrepreneur in Los Angeles who owns a few desktop PCs containing thousands of bitcoins he created. or mined, at the beginning of technology. While those bitcoins are now worth hundreds of millions of dollars, he lost his passwords many years ago and put the hard drives containing them in vacuum bags, out of sight.
“I don’t want to be reminded every day that what I have now is a fraction of what I could have had and lost,” he said. Because of the infrastructure on which Bitcoin was built, these Bitcoin holders will remain “failed millionaires” unless they ever find their private keys.
Source : blockchain
And you ?
What do you think of cryptocurrencies in general? Bitcoin in particular?
Have you invested in one or more cryptocurrencies? Which ones?
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About 3.8 million bitcoins including those of Satoshi Nakamoto, the inventor of bitcoin, are lost forever, reports Chainanalysis