Understanding Bitcoin's Fixed Supply and Its Implications

Bitcoin's unique design features a fixed supply of 21 million coins, which sets it apart from traditional currencies and commodities like gold. This scarcity is achieved through a combination of factors, including block rewards, halving events, and mining difficulty adjustments.

The current circulating supply of Bitcoin stands at approximately 19.9 million coins, with around 1.1 million remaining to be mined. The process of mining introduces fresh supply at a steady pace, ensuring that the total supply remains capped at 21 million. As new bitcoins are introduced, miners rely on block rewards to secure the network and validate transactions.

Bitcoin's halving mechanism reduces the rate of new supply by cutting the block reward in half every four years. This process strengthens Bitcoin's scarcity model and contributes to its value over time. Additionally, mining difficulty adjustments ensure that the system remains stable even as the number of miners changes.