Bitcoin hit a milestone today that gets the world ever closer to the moment when the final new bitcoin will enter the world — the supply of coins broke 19 million.
Why it matters: Bitcoin was created to be money with a fixed supply that no one can change. It launched amidst The Great Recession, when governments were issuing lots of new money to help ease the economic pain.
- Future avid bitcoiners believed that this would only create more problems later.
- Bitcoin is hard-coded so that it has both a predictable emission schedule and a hard cap of 21 million bitcoin.
Catch up quick: The first bitcoin was mined back in 2009, at the height of the great recession and financial crysis.
- A message can be added to each chunk of transactions validated by the bitcoin network. In that first block, which was undoubtedly mined by Bitcoin’s creator, Satoshi Nakamoto, the message read: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
- This is understood both as proof that the block came out no earlier than the day that headline was published (The Times is a British daily newspaper) and also as a comment on the global financial system.
- Every 10 minutes or so all participants in the bitcoin network compare notes on which transactions took place in that time and lock them into bitcoin’s official ledger. Only one participant gets to certify that block. For doing so, they earn some fresh new bitcoin, called the block reward.
- Currently, the block reward is 6.25 bitcoins for each block, which is worth more than a quarter-million dollars at current prices.
Yes, but: It’s debatable whether or not the real supply is actually 19 million. Lots of bitcoin have been lost for various reasons — more then 20% are probably lost forever, the trouble is, there is no way to know exactly how much.
Details: Bitcoin’s price today is $40 708. The news of 19 million mined is unlikely to have particular impact on the price.
The next network-level event likely to impact price is the next time the block reward drops in half, which will happen in a little over two years.
What’s next? The 18 millionth bitcoin was mined in 2019, but the 21 millionth won’t be mined until roughly 2140, provided the network hashrate sticks the same.
That’s because every four years the mining reward drops in half.