The concept of scarcity is a key factor in establishing Bitcoin as a reliable store of value, protecting it from the effects of inflation. With a capped supply of 21 million units, the controlled availability of Bitcoin remains a defining characteristic. Presently, approximately 19 million Bitcoin have already been mined, indicating a limited and finite supply.
High inflation can push people to invest in digital assets like Bitcoin, seen as a safeguard against currency devaluation. Bitcoin’s decentralized nature shields it from government manipulation, and its limited supply, with only 21 million coins, contributes to its resilience to inflation.
The process of mining, where new blocks are added every ten minutes, introduces 6.25 Bitcoin into the network. This issuance rate is scheduled to decrease by half every four years until the entirety of the 21 million Bitcoin is mined, in what is known as the “halving” process.
This predictable reduction in the new supply of Bitcoin over time gives it a unique characteristic, setting it apart from gold, as no additional Bitcoin can ever be discovered.
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