Why can't there be more than 21 million bitcoins?
toztDec 26, 2021 · 3 years ago3 answers
Why is the maximum supply of bitcoins limited to 21 million? What is the reason behind this restriction?
3 answers
- Dec 26, 2021 · 3 years agoThe maximum supply of bitcoins is limited to 21 million to ensure scarcity and prevent inflation. This restriction is built into the Bitcoin protocol and is a fundamental aspect of its design. By limiting the supply, Bitcoin maintains its value and prevents the devaluation that can occur with unlimited printing of traditional fiat currencies. This scarcity also creates a sense of digital gold, making Bitcoin a store of value.
- Dec 26, 2021 · 3 years agoThe 21 million supply limit of bitcoins is a deliberate decision made by the creator of Bitcoin, Satoshi Nakamoto. It was implemented to mimic the scarcity of precious metals like gold. Just like gold, which has a limited supply in the world, Bitcoin's limited supply makes it valuable and ensures that it cannot be easily manipulated or inflated.
- Dec 26, 2021 · 3 years agoThe reason why there can't be more than 21 million bitcoins is due to the consensus rules of the Bitcoin network. These rules are enforced by the network's participants, known as miners. The supply limit is hardcoded into the Bitcoin software, and any attempt to change it would require a majority consensus from the network. This ensures that the supply remains capped at 21 million and prevents any individual or group from arbitrarily increasing the supply.
Related Tags
Hot Questions
- 87
How can I minimize my tax liability when dealing with cryptocurrencies?
- 86
How can I protect my digital assets from hackers?
- 80
How can I buy Bitcoin with a credit card?
- 76
What are the advantages of using cryptocurrency for online transactions?
- 75
What is the future of blockchain technology?
- 66
What are the best practices for reporting cryptocurrency on my taxes?
- 57
How does cryptocurrency affect my tax return?
- 49
What are the tax implications of using cryptocurrency?