CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
December 16, 2021
In total, only 21 million bitcoins can be mined. This week, 90% of this limit has already been reached. There are now about 18.9 million bitcoins in circulation.
When Satoshi Nakamoto invented the cryptocurrency bitcoin, he immediately set a maximum number. Unlike the central banks that print money en masse, a total of only 21 million bitcoins can come into circulation. At the time of writing, about 18,901,712 bitcoins have already been mined, leaving only 2,098,287 bitcoins to be added.
The bitcoin blockchain works with proof-of-work and on average a new block, in which transactions are packaged, is created every ten minutes. The miner is rewarded with 6.25 new bitcoins, which means that about 900 new bitcoins are added every day. Every 210,000 blocks, roughly every 4 years, this block reward is halved. Around May 6, 2024, the block reward will be halved to 3.125 bitcoin.
Because the growth in the number of bitcoins slows down after a halving event, the cryptocurrency will become scarcer. Historically, a halving also causes the price to rise sharply.
The first block, the so-called Genesis Block, was mined on Saturday, January 3, 2009. At the time, the block reward was still 50 BTC. On January 3, 2009, the first 50 bitcoins saw the light of day and almost 13 years later, about 90% of the total amount of bitcoin has already been mined.
Due to the successive halvings, growth is now slowing sharply, so it will take a long time before the last bitcoin is mined. Miners will be rewarded with new bitcoin until 2140. After that, they will have to derive their income from transaction costs. Because small transactions will probably move completely to a second-tier solution such as the Lightning network in the future, mainly large transactions will take place on-chain, which means higher transaction costs for the miner.
There are currently about 18.9 million bitcoins mined, but the actual number that is still in circulation is somewhat lower. This is because a lot of people have lost the private keys from their wallets. There are plenty of stories of people who started mining for fun in the early years. At 50 BTC per block, they could quickly collect a lot of bitcoin, but they couldn't do much with it. Bitcoins were only traded from July 2010, when the price was $0.0008 per bitcoin. So whoever had mined 100 BTC did not even receive 10 eurocents for it. Miners who gave up often threw away their wallets, and so these bitcoins have been taken out of circulation forever.
The New Yorker recently featured a story of James Howells, who in 2009 mined about 7,500 BTC on his gaming laptop. At that time, these bitcoins were worth about 6 euros, but currently they are worth 350 million euros. The mining demanded a lot from the processor, which made his laptop very hot. He therefore stopped mining and six months later he spilled lemonade on the laptop, rendering it useless. He was able to save some of what was on the hard drive and copy it to an Apple computer, but because there was no bitcoin version for Apple at the time, he left his wallet undisturbed. In recent years, the man has made every effort in the world to find his hard drive, which is buried somewhere in a landfill.
According to the analytics company Chainalysis, about 20% of all bitcoin is currently lost because people can no longer access their wallets. In many cases, this concerns people who no longer know their private key or self-chosen password.
The lost bitcoins are viewed as a gift to all other bitcoin owners. Because they provide extra scarcity, the price of bitcoin is pushed higher, which hodlers benefit from.
Read more about buying bitcoin here.