Bitcoin: Scarcity is Increasing, Block by Block ๐๐๐
#PowellRemarks This is a fundamental concept in the world of Bitcoin ๐๐, which is the diminishing supply of new Bitcoin over time, block by block ๐๐. This principle relies on the basic mechanism of Bitcoin mining and block rewards.
โ Block Reward: When a new block of Bitcoin transactions is "mined" and added to the blockchain, the miner who successfully completed this process receives a reward. This reward is in the form of newly created Bitcoin.
โ Halving: Approximately every four years (or after mining 210,000 blocks), the block reward is cut in half. This means that the amount of new Bitcoin entering circulation significantly decreases. For example, the reward started at 50 Bitcoin per block, then decreased to 25, then 12.5, and so on.
โ Increasing Scarcity: With each halving, the rate of new Bitcoin issuance slows down. This creates increasing scarcity in supply, especially since there is a maximum limit to the number of Bitcoins that can ever be created, which is 21 million coins.
๐ซ This programmed scarcity is one of the main reasons why Bitcoin is considered "digital gold" ๐คฉ๐คฉ or an asset with increasing value over time ๐ค๐ค, as demand increases while new supply decreases ๐๐.