Cryptocurrency

The Bitcoin Limit of 21 million BTC raise? How safe is BTC is scarcity?

A few days ago, we reported that of the 18. millionth Bitcoin has been mined. This Event may seem to outsiders irrelevant, but in the Crypto Community, it has celebrated a variety of reasons. For one, it is a sign of progress, the Bitcoin since its emergence in 2009, has made. On the other, it is reminiscent of the White Paper and Protocol specified Bitcoin Limit of 21 million BTC. Exactly this maximum number, it is what Bitcoin is so special and why a lot of Crypto Fans, BTC is superior to Fiat currencies view. But the fact that it is now just under 3 million Coins can be mined, also raises the question as to how much in stone is over the Limit of 21 million Bitcoins sculpted actually is.

The Bitcoin Limit of 21 million BTC as a Problem for the Miner?

The Mining plays a crucial role in the Bitcoin network. The Miner shall ensure that the transactions are built into the Blockchain. As a reward, you get Bitcoins. Currently, the 12.5 BTC per found Block, and in addition, some transaction fees, which are, however, together, rarely more than 1 BTC.Every 4 years, takes place the so-called “Halving” reward to the Miner is cut in half. The next one is in may 2020, the Miner will receive only 6.25 BTC per Block. On the one hand, it is exactly this mechanism is what makes Bitcoin so special, and for many of the reason why the Bitcoin price every couple of years putting on a huge rally.However, on the other hand, the Halving also ensures that the business model of miners unprofitable. And that is exactly where some Bitcoin skeptics see a long-term Problem, if the Bitcoin Limit of 21 million BTC will be reached in the distant future, and the miners are paid only by the transaction fees. This will approx. be in the year 2140 of the case. Angela Walch from the University College London says:

All of your assumptions about incentives, risks, and values are lost. Please take off the blinders and stop assuming that everything is still functioning well, if everything is transferred in a pure transaction fees system […].

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Can be raised by the Bitcoin Limit?

The scarcity of Bitcoin due to the limitation to 21 million, and every 4 years, to be held Halvings are so good for investors and good for the Miner. Because without Mining, however, in the Bitcoin network, nothing works, the question is, the Angela Walch, in your testimony, has cracks: What happens if the Miner will always get less rewards? Add to this that Economists criticize the deflationary nature of Bitcoin and claim this to be the reason why the Coin could not enforce as a money or Asset. These points then lead to the occasional claims by critics that the Bitcoin Limit should be increased from 21 million BTC sometime. Walch says, for example:

We need to acknowledge that the 21 million limit is ambitious. If the people decide for certain reasons to change this [offer-]the upper limit, and enough people make this decision, will change the System to her.

Technically, it is like Walch mentioned possible, the upper limit of 21 million BTC, cancel and correct to the top. However, this would throw the actual reason for the Existence of Bitcoin, completely over the bunch and so for displeasure many Bitcoinern lead.Such a measure is unlikely, because the Bitcoin Community and the developers is not known just for their sake, to change the Protocol and network basic something. Rather, it was in the past, the goal is to get the original idea of Satoshi Nakamoto.

Bitcoin advocates Antonopoulos sees no Problem

Contrary to the opinion of Bitcoin critics and the statements of Angela Walch, the well-known Bitcoin expert Andreas Antonopoulos sees to discuss the declining Miner rewards to their elimination as a Problem and considers that it is not so also is necessary on an increase in the upper limit of 21 million BTC.According to Antonopoulos, the Transition to a purely by transaction fees-controlled reward system, a 120-year-long process and not an event, which takes place from today to Tomorrow. In the course of this process is to regulate the Mining as a dynamic process itself:

[Mining rewards] adjust dynamically based on the network. …. It is a very complex economic environment. It is not as easy as people think. […] Nothing magical happens when the block subsidy drops to Zero.

Furthermore, it adds Antonopoulos, that Mining is a catch since the beginning of 2009, “almost profitable” and will remain:

There are a half dozen variables that determine the profitability of the Mining, including the cost of electricity, access to the bandwidth transaction, the block subsidy and the transaction fees, the Bitcoin price, the exchange rate of the national currency, the type of equipment and the efficiency of conversion of electricity to Mining.

Conclusion for the Bitcoin Limit and the remaining 3 million BTC

All in all, it is very likely that the remaining 3 million still to mine actually, only 3 million remain and a limit on the number of BTC is not even raised in the distant future. With this assurance, the joy rises to the next Halving Event all the more and you may be curious whether the Bitcoin price moving once again, following a steep rally.75 % of private CFD accounts lose money. No EU investor protection.What do you think of statements such as the Walchs, and discussions about whether it would be to raise makes sense the upper limit for BTC? Come in to our Telegram Chat and talk with the experts and the Community. Subscribe to our News channel to not miss any News. [Image Source: Shutterstock]

About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.