Bitcoin is scarce because it has a maximum supply of 21 million Bitcoin.
Unlike dollars, no one can print more Bitcoin.
Capped Supply
The 21 million cap was set by Bitcoin's creator, Satoshi Nakamoto.
This limit was chosen to introduce scarcity, similar to precious metals like gold.
Scarcity is a key feature that can help to maintain and potentially increase the value of an asset over time.
How it Works
New Bitcoin are created through a process called mining.
Miners use something called "proof of work" which means computers have to put in lots of effort to make Bitcoin and confirm transactions.
This is like digital hard work. And unlike regular money, there's a cap to the amount of Bitcoin that can ever exist.
This means it doesn't lose value like dollars can because no one can cause inflation in the Bitcoin system.
Halving Events
The reward miners receive for their digital hard work is halved approximately every four years, an event known as the "halving".
This gradual reduction in the new supply of Bitcoin ensures that the total supply will never go above 21 million.
More than 93% of all 21 million Bitcoin have already been mined.
The last Bitcoin is expected to be mined around the year 2140.
Sending a Bitcoin transaction requires paying a small fee to miners, so even after all 21 million Bitcoin are mined the system will still continue to function.
The Role of the Blockchain
The Bitcoin blockchain, a decentralized ledger, records all transactions.
It's maintained by a network of computers (called nodes) all around the world.
Anyone can download free software to run their own node.
Bitcoin nodes make the 21 million supply cap transparent and verifiable.
No one can make more than 21 million Bitcoin because these nodes enforce the rules.
Bitcoin is scarce.
Bitcoin is better money.
