Soon, the 17 millionth bitcoin will be produced. What does it mean?

Data Blockchain.info showthat the 17 millionth bitcoin is about to be mined, which will be another milestone for the world's first cryptocurrency. The event is significant because according to the current rules, only 21 million bitcoins can be created.

This event marks the first crossing of the millionth milestone since mid-2016, which is noteworthy as another reminder of the advancement in computer technology. In short, the bitcoin code, as cloned and adapted by dozens of other cryptocurrencies, ensures that only a certain amount of new bitcoins are introduced into the ecosystem's economy at specific intervals. Miners serving the bitcoin network are rewarded every time they add new entries to the blockchain.

It should be noted that it is impossible to accurately predict the appearance of the 17 millionth bitcoin, but, nevertheless, there is relative predictability. Each bitcoin block generates 12,5 new bitcoins, and as blocks are added approximately every 10 minutes, about 1800 new bitcoins are created per day.

As such, it is perhaps best to view the event as a “psychological barrier,” said Alex Sunnarborg, partner at Tetras Capital, about an event that is being interpreted differently by different communities.

For example, Sunnarborg sought to emphasize that another way to interpret a similar result is that 80% of all bitcoins that will ever be created are already in circulation. In other words, only about a fifth of the possible supply remains for miners and prospective buyers.

There are other opinions as well. Some see the event as a moment to evaluate technology and its advances.

“I think it’s amazing,” Tim Draper, a venture capitalist who bought a million dollars worth of bitcoin, said at an auction in 2014. He added:

I guess the founders didn’t think how important Bitcoin would become even in their wildest dreams.

Some members of the crypto community have been keen to suggest that this event is something that should be seen as an opportunity to learn about both the specifics of bitcoin and cryptocurrencies in general.

For example, if all the people who run computers that use the bitcoin software don't make the decision to make changes, there is no way ever to create more new bitcoins than 21 million. This achievement, a technical reality, has played a key role in linking bitcoins with money, economy, and other assets.

Features

Instead of being issued by a central bank, bitcoin is created by the network by doing the work of keeping and maintaining the blockchain. When miner finds a valid hash for new transactions by solving the bitcoin protocol puzzle, he is rewarded and bitcoins are credited to his account.

When bitcoin founder Satoshi Nakamoto created the first block on the bitcoin blockchain on January 3, 2009, he created received 50 bitcoins. This reward remained the same for the next 209 blocks, and after that the first “halving” or reduction of rewards occurred.

This did not come as a surprise. Each 210 000 blocks, in accordance with a strictly programmed schedule, the network reduces the block reward by 50%. After the most recent split, in July 2016, the reward is bitcoin 12,5.

This means that, although only a million bitcoins 4 remains, the network will not reach the last bitcoin for a very long time. As the inflation rate decreases by a factor of two each time, the growth rate of the money supply slows down.

The moderator of BashCo, on a subredite of r / bitcoin, built the trajectory of the total bitcoin supply (blue curve) against its speed of monetary inflation (orange line).

Assuming that the Bitcoin protocol remains the same (the new block is launched every 10 minutes on average, and production is halved and the number limit is not changed), the last new Bitcoin will be extracted no earlier than May 2140 of the year.

The following 120 years

With that in mind, the chart hints at another common talking point of the event discussion – bitcoin has been programmed to become over a very long time.

James Lopp, lead wallets provider at Casa, recalled that "bitcoins are divisible, and therefore the smallest parts of every bitcoin can have seemingly infinite value."

Lopp said about the event:

While 17 million BTC may seem like a lot, it's incredibly small - every millionaire in existence won't get a single bitcoin. Luckily, each bitcoin is divided into 100 million satoshi!

But there are other software quirks.

Firstly, there will never be 21 million bitcoins, since, given the protocol, at least one satoshi will not be enough. This is because on May 17, 2011, the miner "midnightmagic" - for reasons that remain unclear - demanded a reward of 49,99999999 instead of exactly 50 bitcoins.

Also, to be clear, Bitcoin will not stop working when 21 million bitcoins are mined. The idea is that miners, when this happens, will be rewarded solely from the transaction fees they are already receiving.

With so many unanswered questions, if anything, the event serves as yet another reminder of how long Bitcoin has come and how far it has to go.

Rate this article
Blockchain media