How Many Bitcoins Exist Right Now?
As of August 2023, there are approximately 89 million bitcoins in circulation. However, this number has been changing due to the halving events since the inception of Bitcoin and through its transaction history over the years. But how did we reach this figure? Let's delve into the fascinating journey of bitcoin's existence from its genesis block to today's count.
The Genesis Block: The Beginning
Bitcoin was first introduced in 2008 by an unknown person, or a group of people, using the pseudonym Satoshi Nakamoto. The protocol upon which Bitcoin is built was published in 2009 with the creation of the first block on January 3, 2009, known as the "Genesis Block". This block contained a proof-of-work algorithm that would later become the backbone of how transactions are verified and recorded across the entire network.
Initial Supply and Halving Events:
Bitcoin was designed to have a total cap of 21 million bitcoins. Initially, each new bitcoin block came with a reward of 50 newly created bitcoins, which would be divided among the miners who solved its cryptographic puzzle first. This mining reward is paid by transactions fees and the creation of new bitcoins.
Since its inception, Bitcoin has experienced two significant halving events that have reduced the number of new bitcoins awarded to miners every 210,000 blocks, or roughly every four years. The first halving occurred in 2012 when the reward was reduced from 50 BTC to 25 BTC per block. The second halving took place in 2016 and halved it again, to 12.5 BTC per block. As of now, the reward will continue to halve every four years until no new bitcoins are created.
The Mystery of Lost Coins:
A significant portion of bitcoins that were once part of the circulating supply have either been lost forever or are in wallets deemed unspendable due to technical reasons such as loss of private keys, hardware failure, or deliberate deletion. This phenomenon is often referred to as "lost coins" and contributes to the decrease in the total number of bitcoins available for transactional purposes.
Investors have also lost confidence, leading to a reduction in the average age of Bitcoin wealth due to more frequent trading. The older wallets are, the higher their chances of being lost or permanently unspendable. This factor further decreases the number of actual circulating bitcoins.
The Final Frontier: 21 Million Bitcoins Limit:
As of August 2023, over 89 million bitcoins exist, with approximately 46% of all bitcoin ever created now in circulation. The remaining 54% are either locked up in wallets that cannot be spent or have been lost forever due to the loss of private keys. This percentage is expected to increase as more coins get permanently locked out until they can no longer be mined, which will occur during the third and final halving event around mid-2024.
The Future:
Despite its current size, the total number of bitcoins in existence has been decreasing since 2013 due to the increasing rate of permanently lost coins. This trend is expected to continue as more people lose their wallets or keys, and a growing portion of Bitcoin wealth gets held for long periods with reduced turnover rates.
The fact that there will be only 21 million bitcoins in total introduces scarcity, which could potentially drive up the price due to demand-driven inflationary pressure against a capped supply. However, this also means that the market cap and circulating supply of bitcoins are more volatile than traditional assets, as they are subject to periodic changes through halving events and loss of coins.
In conclusion, as we stand on the brink of another significant change in Bitcoin's mining reward due to its third halving event, it is fascinating to consider how far a digital asset once considered an experimental idea has come. From the genesis block to the 89 million bitcoins that currently exist and the anticipated reductions in supply through halvings and loss events, Bitcoin continues to evolve at a pace that defies traditional economic norms and theories. The journey thus far is only half completed; what remains could very well redefine our understanding of cryptocurrencies for generations to come.