Why is the total supply of Bitcoin capped at 21 million?

5 answers

• Mar 19, 2022 · 3 years ago
  The total supply of Bitcoin is capped at 21 million as a deliberate design choice. This cap ensures scarcity and helps maintain the value of Bitcoin over time. By limiting the supply, Bitcoin avoids the inflationary risks associated with traditional fiat currencies. Additionally, the cap creates a sense of urgency and encourages adoption and usage of Bitcoin.
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• Mar 19, 2022 · 3 years ago
  Bitcoin's total supply is capped at 21 million to prevent excessive inflation. Unlike fiat currencies that can be printed at will, Bitcoin has a fixed supply. This scarcity makes Bitcoin more valuable and less prone to devaluation. The cap also aligns with the principles of decentralization and economic freedom, as it prevents any single entity from controlling the supply and manipulating its value.
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• Mar 19, 2022 · 3 years ago
  The total supply of Bitcoin is capped at 21 million to ensure a deflationary economic model. This scarcity feature is one of the reasons why Bitcoin is often referred to as 'digital gold.' As the demand for Bitcoin increases, its limited supply can drive up its value. This cap also creates a sense of exclusivity and encourages early adoption, as people recognize the potential for future value appreciation.
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• Mar 19, 2022 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, explains that the total supply of Bitcoin is capped at 21 million to maintain scarcity and protect against inflation. This cap is built into the Bitcoin protocol and cannot be changed without consensus from the network participants. By limiting the supply, Bitcoin becomes a store of value and a hedge against traditional financial systems. The cap also ensures that mining rewards decrease over time, making Bitcoin more difficult to obtain as it approaches its maximum supply.
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• Mar 19, 2022 · 3 years ago
  The decision to cap the total supply of Bitcoin at 21 million was made by its creator, Satoshi Nakamoto. This limit was implemented to mimic the scarcity of precious metals like gold and to prevent the devaluation of the cryptocurrency. By having a fixed supply, Bitcoin can maintain its value and serve as a hedge against inflation. The cap also adds a level of predictability to the Bitcoin ecosystem, as participants know exactly how many coins will ever be in circulation.
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