The scarcity of Bitcoin is guaranteed by its code, which limits the total number of coins that can ever exist from "summary" of The Bitcoin Standard by Saifedean Ammous
Bitcoin's scarcity is a fundamental aspect of its design. This scarcity is not subject to human decision or manipulation but is ensured by the code that governs the cryptocurrency. The total number of bitcoins that can ever exist is limited by the rules embedded in the software. This limitation sets Bitcoin apart from traditional fiat currencies, which can be printed in unlimited quantities by central banks. By capping the total supply of bitcoins at 21 million, the code establishes a predictable issuance schedule. This fixed supply contrasts with the inflationary tendencies of fiat currencies, which lose value over time due to continuous money printing. The scarcity of Bitcoin is not based on trust in a central authority but is mathematically determined and publicly verifiable. The scarcity of Bitcoin is comparable to precious metals like gold, which have been valued for their limited supply throughout history. Just as gold cannot be created out of thin air, new bitcoins cannot be generated beyond the predetermined limit. This scarcity gives Bitcoin its store of value properties, making it a hedge against inflation and currency devaluation. The scarcity of Bitcoin is a key factor in its appeal as "digital gold." Like gold, Bitcoin is resistant to inflation and debasement, making it a reliable store of wealth over the long term. As more people recognize the benefits of a deflationary currency, the demand for Bitcoin is likely to increase, driving up its value. Bitcoin's scarcity is not a temporary feature but a permanent aspect of its design. The limited supply of bitcoins ensures that the cryptocurrency will retain its value over time, making it a compelling alternative to traditional fiat currencies. In a world where central banks can print money at will, Bitcoin offers a scarce and decentralized monetary system that is resistant to manipulation or debasement.Similar Posts
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