Topic: Higher demand,limited supply (Read 186 times)
Having a limited supply is certainly a big reason why bitcoins are being valued to a huge amount. Since it is limited a lot of people want to get invest in while there are still coins to mine.
The supply is capped at 21 million in purpose for it to be sort of deflationary; not like most fiat whereas the value of that certain currency goes lower and lower every year/every few years due to the government printing more and more money.
Why 21 million you say? Here's a good explanation:
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
source: https://bitcoin.stackexchange.com/questions/8439/why-was-21-million-picked-as-the-number-of-bitcoins-to-be-created
Why 21 million you say? Here's a good explanation:
Quote
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
The representation mjglqw is simple yet very valid. The amount of Bitcoin is fixed and limited which makes it a precious asset to own. It is due to this finite amount that more people want to acquire Bitcoin because every piece of it is truly valuable. Supply and demand shares an indirectly proportional relationship as proven by having lesser supply if there is more demand. With lesser supply on the other hand comes greater value.
It has limited supply in order to maintain its value. The more the supply the more the value gets lower. Same as when government prints more money, the value becomes lower.
The value of something increases the rarer it is. If there were 450 million coins, then the price of the average coin would be devalued. So the limited supply actually pushes bitcoin's price up, which is a good thing.
Thats the beauty of bitcoin at the first time bitcoin released, the price is not high but now it's more than gold. it's because the high demand and limited supply of bitcoin. if now bitcoin supply add. it will make bitcoin price down very fast
Why 21 million you say? Here's a good explanation:
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
source: https://bitcoin.stackexchange.com/questions/8439/why-was-21-million-picked-as-the-number-of-bitcoins-to-be-created
Quote
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
I agree, very good explanation. Bitcoins are like gold in real life. Golds have limited supply and have a high value in market. It is also said that all bitcoins will be mined in year 2140 so it will be a long run for bitcoins. We also expect to its price will continue to pump as its supply is getting lower. There are still 6 million bitcoins to mine so far.
Limited supply and High demand is a natural thing for something of value. And obviously, due to the limited number, many people want to hoard Bitcoin, before the total supply is met. Because If the total supply of 21 million Bitcoin has been reached, the price of Bitcoin will rise dramatically. Probably faster than the current price increase.
The supply is capped at 21 million in purpose for it to be sort of deflationary; not like most fiat whereas the value of that certain currency goes lower and lower every year/every few years due to the government printing more and more money.
Why 21 million you say? Here's a good explanation:
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
source: https://bitcoin.stackexchange.com/questions/8439/why-was-21-million-picked-as-the-number-of-bitcoins-to-be-created
Why 21 million you say? Here's a good explanation:
Quote
Here's a mathematical explanation:
Calculate the number of blocks per 4 year cycle:
6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000
Sum all the block reward sizes:
50 + 25 + 12.5 + 6.25 + 3.125 + ... = 100
Multiply the two:
210,000 * 100 = 21 million.
Economically, because the currency is effectively infinitely divisible, then the precise amount doesn't matter, as long as the limit remains fixed.
There is only a 21 million fixed supply of bitcoin,and 6 million are remaining available to mine.
Why there is a limited supply of bitcoin while the demand is so high?
Why there is a limited supply of bitcoin while the demand is so high?
Jump to: