$BTC A quick question. If bitcoin is capped at 21 million tokens, what happens when it gets scarce in the context that it is the globally accepted currency of exchange?

Answer:

If Bitcoin becomes globally accepted as the primary currency and the 21 million cap is reached (which is projected to happen around the year 2140), scarcity will play a major role in how the system operates. Here's what happens:

1. Divisibility handles scarcity:

Bitcoin is divisible up to 8 decimal places, meaning each bitcoin can be split into 100 million satoshis. So even if all 21 million are mined, there's enough granularity (2.1 quadrillion satoshis) to support massive global use.

2. Value increases with scarcity:

As demand grows but supply stays fixed, each bitcoin becomes more valuable. One satoshi might be worth a lot if Bitcoin becomes the dominant currency.

3. Deflationary pressure:

A fixed supply encourages saving because your money gains value over time—unlike inflationary fiat currencies. But too much deflation could discourage spending, which can slow economic activity.

4. Increased use of layer-2 solutions:

Scalability and microtransactions would be handled by protocols like the Lightning Network, allowing near-instant, low-cost payments using satoshis, while still settling in Bitcoin.