Let’s Go Straight To The Answer
This is a very common question. Once you see that everyone around you seems to be interested in bitcoin it becomes clear that bitcoin is way more popular than you ever thought it was.
Let’s go straight to the answer – we don’t have an exact figure due to there being no central authority of Bitcoin, but according to the latest estimates there is almost 16.7 million bitcoin in circulation. Now, you can multiply this by the price of one bitcoin to understand why bitcoin is a big deal. It represents hundreds of billions of dollars of capital.
The Bitcoin Upper Limit
However, there is another interesting number which you should be aware of and that number is 21 million. See, when bitcoin was designed it was designed to have an upper limit. This upper limit is 21 million and you cannot mine more bitcoins than that. Basically, there cannot be more than 21 million bitcoin in circulation at the same time. Now, we know what you are thinking, why is there a limit to the amount of bitcoin that can be generated?
That is because bitcoin is generated based on a complicated algorithm. The answer that is generated is checked for some criteria, and it if passes it is accepted as a newly mined bitcoin. The total number of possible answers that fit all the required criteria is 21 million. No two bitcoins are alike – they all have unique identifiers. This means that once 21 million bitcoins are mined there will be no more bitcoin mining possible
What Happens Once The Limit Is Reached?
There will be many changes to the world of bitcoin once this limit is reached. The biggest losers will be bitcoin miners. Their whole business depends on them being able to mine bitcoin. Once the 21 million number is reached, mining bitcoins will not be possible anymore. It is possible that the miners will instead focus on transaction fee next, but it is unlikely that the transaction fee will be high enough to make their business profitable.
The price of bitcoins will also skyrocket as we come close to the limit. People will realize that this may be their last chance to buy bitcoin and thus they will be willing to pay a very high price for it. This is also why the price of bitcoin has been getting so high recently. The closer we get to 21 million the harder it gets to mine bitcoin. There was a time when you could mine a bitcoin in a few hours, now it takes weeks for specialized hardware to generate a bitcoin. This is by design – the creators of bitcoin wanted a slowdown mechanism built into the bitcoin generation process to make sure the market wasn’t flooded with bitcoin.
We are still a long time away from reaching 21 million, however, and there is always the chance that people will decide to change the way bitcoin works to generate more, but there is none on the horizon right now.