Cryptocurrency Q&A
How does bitcoin supply work?
How does bitcoin supply work?
Maria
Sun Jul 07 2024
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7 answers
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Could you please elaborate on how the supply of Bitcoin functions within the cryptocurrency system? I'm particularly interested in understanding the mechanisms that govern its issuance and how it differs from traditional fiat currencies. Does the Bitcoin network have a predefined cap on the total number of coins that can be mined? If so, how does this affect the long-term value and scarcity of Bitcoin? Also, could you explain the mining process briefly and how it contributes to the overall supply of Bitcoin? Thank you for your insights.
7 answers
Federica
Tue Jul 09 2024
The total supply of Bitcoin is determined through the issuance of block rewards, a mechanism intrinsic to the Bitcoin protocol.
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SumoHonor
Tue Jul 09 2024
These block rewards are halved every 210,000 blocks, ensuring a gradual reduction in the rate of new Bitcoin entering the market.
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Eleonora
Tue Jul 09 2024
This process, known as halving, helps maintain a controlled and sustainable rate of inflation for the cryptocurrency.
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Giuseppe
Mon Jul 08 2024
The current inflation rate of Bitcoin is calculated on an annualized basis, taking into account the periodic halving events.
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Bianca
Mon Jul 08 2024
The data regarding the total Bitcoin supply and its inflation rate is sourced from reliable nodes such as BitcoinVisuals, which utilizes the bitcoind software.
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