Satoshi Nakamoto set the total supply limit of Bitcoin at 21 million, meaning that the number of Bitcoins will never exceed this number. New Bitcoins are introduced into the supply at a fixed rate of one block every 10 minutes, and every four years, the number of Bitcoins released in each block decreases by 50%. As of August 2021, 18.7 million Bitcoins have been mined, leaving about 2.3 million Bitcoins waiting to be mined.
This supply limit makes Bitcoin very scarce while controlling the market by reducing the possibility of inflation. However, when Bitcoin reaches its supply cap, a series of changes in economic conditions will occur.
During this phase, various participants in the Bitcoin ecosystem, such as miners and traders, will experience changes in incentives. For example, miners may rely less on block rewards and more on transaction fees to earn revenue and profits. The entire cryptocurrency network will also undergo changes, and new participants may replace retail investors in the current ecosystem.
However, due to the relative underdevelopment of the cryptocurrency ecosystem, it is difficult to determine the impact of Bitcoin reaching its supply cap. In addition, given Bitcoin’s code and mining process, some have suggested that it may never actually reach its 21 million cap.
When Bitcoin reaches its supply cap, block rewards will disappear and miners will rely more on transaction fees for revenue. This will also cause the Bitcoin network to evolve from its current state to a network that focuses more on transaction fees.
The Bitcoin ecosystem may serve as a bridge between currency transactions and trade. The cryptocurrency may take a more defined place in the financial ecosystem. As for whether Bitcoin will actually reach the 21 million cap, it is uncertain because the rounding operator used in Bitcoin's code means that Bitcoin will never reach this number exactly.
Overall, the future development of Bitcoin depends on changes in technology, market demand, and the entire cryptocurrency ecosystem. In this process, Bitcoin may continue to play an important role in the financial field, but its specific performance remains a complex issue.
