Milestone: 18 millionth bitcoin mined

This morning the 18 millionth bitcoin was mined. A milestone for the very first cryptocurrency!

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3 But will there be a maximum of 21 million bitcoin in circulation?

Although 18 million is just a number, this event underlines how scarce bitcoin actually is. And how scarce bitcoin eventually becomes, because there is a limit on the maximum number of bitcoin. More than 85 percent of this is already in circulation.

How scarce is bitcoin anyway?

Bitcoin has a limited edition of 21 million pieces. The number of 21 million does not really matter, that could just as well have been 100 million or any other random number. The most important thing is that there is a limit and that coins cannot simply be printed.

That is the case with fiat currencies such as the euro and the dollar. Bitcoin expressly rejects this system by setting a limit on the number of coins in advance.

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Inflow halved every four years

In addition, the influx of new bitcoin is halved every four years. To be precise, every 210,000 transaction blocks. A new transaction block is added to the bitcoin blockchain every ten minutes.

In the first four years, 50 bitcoin were released every ten minutes. The four years thereafter 25 bitcoin per ten minutes, then 12.5 bitcoin and from next year only 6.25 bitcoin per ten minutes. If you calculate this, you will come to 21 million bitcoin in 2140. This fact ensures that the inflow of new bitcoin is predictable.

Below you can see the development of the number of bitcoin over the years. The blue line represents the number of bitcoins on the market. In 2019, more than 85 percent of all bitcoin are already available. The orange line shows the inflow of new bitcoin, which is roughly halved every four years. This also keeps inflation down.

But will there be a maximum of 21 million bitcoin in circulation?

Actually not, research shows that 3.5 million bitcoins are lost. In the early days of bitcoin, storing your crypto coins was quite a job. You saved Bitcoins with the original Bitcoin Core software. Your password has been saved in a file named wallet.dat. Did you lose that file? Then you simply could not reach your bitcoin anymore.

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There is a story that an Englishman has lost 7,500 bitcoin in this way. He has thrown away his hard drive, and is therefore unable to access the wallet file. 7,500 bitcoin is now worth more than 54 million euros.

Of those 3.5 million bitcoins, 2.5 million have been lost and 1 million is still in the wallet of the mysterious creator of bitcoin, Satoshi Nakamoto. Nothing has been done with these coins, the expectation is that these 1 million are lost.

So in total there will only be 17.5 million “accessible” bitcoin.

How scarce is 17.5 million bitcoin?

To put it in perspective, how scarce is 17.5 million bitcoin anyway? With 17.5 million bitcoin you can:

Give every Dutchman 1 bitcoin (7,100 euros), or
Give each Chinese 0.01 bitcoin (71 euros), or
The whole world population only give 0.002 bitcoin (14.20 euros)
There are 55 million millionaires worldwide, this means that they cannot even own half a bitcoin

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