Total Amount of Bitcoins
Toon's expertise is Bitcoin. Joins the Telegraph's Crypto Update regularly.
Whilst writing this article, over 18 million bitcoins are in circulation. In total, an amount of 21 million bitcoins will be mined. That’s quite different from the euro or the dollar, which have an unlimited supply.
Bitcoin is limited, and it is designed like that for a reason. It prevents the system from creating endlessly more bitcoin, in the way that paper money can be endlessly printed. Because there is a limited amount of bitcoins, we all know what to expect. But more importantly, it creates scarcity.
Influx of bitcoin is halved every four years
Not only the total amount is planned, but also the influx of newly created bitcoins. Every ten minutes (on average) a new transaction block is mined, and a fixed amount of bitcoin is added to the total circulating supply. This fixed amount is the so-called block reward for the miners that process transactions in a block.
The block reward is halved roughly every four years. In the first four years, 50 bitcoins were added every ten minutes. The next four years, that amount was 25, currently the block reward consists of 6.25 bitcoins.
In crypto lingo, this whole process is called the Bitcoin block halving.
3.5 million bitcoins lost forever
In reality, there will never actually be 21 million bitcoins available on the market.
Around 3.5 million bitcoins are ‘lost’. Not lost in a way they cannot be found anymore though. We know exactly where they are when we check the bitcoin blockchain, since it shows all bitcoin transactions that have ever been made. No, they’re lost because the access to the bitcoins was lost. This means the coins aren’t really part of the circulation anymore, making bitcoin even more scarce than it already was!
Satoshi Nakamoto is the anonymous creator of Bitcoin. It’s estimated that over one million bitcoins are stored on addresses that can be traced back to this person (or persons). These bitcoins will probably never be moved again, since they have been on the same address for years now. That’s how the first 1 out of 3.5 million are ‘lost’.
Back in the days, storing your bitcoin wasn’t as easy as it is now. You stored your coins using Bitcoin Core software and saved your password in a kind of text file on your computer. If your computer quit working or you lost the file, you were unable to access your bitcoin.
Rumor has it that an Englishman lost 7,500 bitcoins this way. He threw out his hard drive, and therefore could no longer access the backup file. 7,500 bitcoin multiplied with the current price… Oof, that would’ve been no less than 54 million euros. You could buy 100 Lamborghini's with that and a ton of hard drives!
Storing bitcoin became easier over the years. Online bitcoin wallets were, and still are, a lot easier to use than a text file. But still, if you lose your password you will also lose the access to your coins.
A lot of people lost their cryptocurrencies like this. A research from Chainalysis indicates that it concerns more than 2.5 million bitcoin… Let that sink in for a minute.
Lucky for you (and us), the chance to lose your bitcoin nowadays is significantly smaller. Using BLOX, you’ve got your bitcoin and other coins within hand’s reach. BLOX is the all-in-one app for your smartphone.
So.. is bitcoin scarce?
To summarize, more than 3.5 million bitcoin are out of circulation forever. So only about 17.5 million bitcoin will come into circulation.
How scarce does that make bitcoin? With 17.5 million bitcoin you could:
Give everyone in the Netherlands 1 bitcoin, or
Give everyone in China 0.01 bitcoin, or
Give everyone in the world only 0.002 bitcoin.
This illustrates how little bitcoin there really are in the world. How much of them do you have in BLOX?