80% of Total Bitcoins Already ‘Mined’

80% of Total Bitcoins Already ‘Mined’

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According to the reports, more than 16.8 million bitcoins are in circulation which means 80 percent of total bitcoins are officially mined.

In brief:
According to the reports, more than 16.8 million bitcoins are in circulation which means 80 percent of total bitcoins are officially mined.

It seems the love for Bitcoin is never ending as despite going through a bad phase, 80% of this digital coin has already been mined. According to the reports, more than 16.8 million bitcoins are in circulation with 80 percent officially being already mined. BTC contains the 21 mln cap built into its protocol by its creator Satoshi Nakamoto and this means only 4.2 million bitcoins, or 20 percent, are left to be mined until this 21 million supply cap is reached somewhere around in the year 2140.

The individual miners were behind bitcoin mining in the early days, however, now multi-billion dollar firms are gearing up to enter the global mining sector. Initially, there wasn’t enough computing power contributing to the Bitcoin network and the difficulty level of mining was also less. As a result, individual miners with small-scale mining setups and low electricity costs were able to mine many bitcoins.

The supply of government-backed traditional currencies and assets can easily be manipulated by central authorities. For instance, the supply of US dollar, the reserve currency of the global economy, is controlled by the Federal Reserve Bank through a method called quantitative easing, which simply implies printing more cash.

On the other hand, bitcoin has a fixed supply and the rules are determined by its decentralized protocol. Bank of Finland researchers described bitcoin as “a monopoly run by a protocol, not by a managing organization.” Bitcoin derives its value from a basic economic concept of supply and demand. Remarkably, it is the security, computing power, fixed monetary supply, and rising demand from the global economy which makes bitcoin valuable. Once the supply of bitcoin reaches 21 million, no more bitcoins can be mined or brought into circulation, despite its rising demand. However, the financial analysts and critics of cryptocurrencies time and again make a point that the value of bitcoin is not backed by anything.

On the basis of the amount of computing power contributed to the network, the difficulty level in bitcoin mining is automatically calculated. It is because of this system that the absence of large mining facilities is prevented from affecting the global Bitcoin network. This means, in case China shuts down bitcoin mining activities, it would have little impact on the bitcoin network. This is because it will result in reducing the difficulty level and thus making it easier for existing miners to mine bitcoin. Since bitcoin mining sector has emerged into a major industry, consequently the computing power of bitcoin cannot all of a sudden decline by large margins.

If major tech conglomerates enter the mining sector, it would distribute the power of miners and mining equipment manufacturers within the global bitcoin mining market, which at present is conquered by a few companies, like Bitmain. By allocating billions of dollars in producing ASIC miners and setting up large-scale mining centers, some large technology conglomerates in Japan are expected to enter the bitcoin mining sector soon.

Bitcoin may emerge as a major currency, store of value, and a medium of exchange in future, if its network, market, and mining industry continue to mature.

 

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