Bitcoin has now officially surpassed 90 per cent of its available supply, with fewer than 2.1 million coins left.
Almost 13 years to the day the first Bitcoin was mined – on January 3 2009 – only 10 per cent of the total supply of 21 million coins remain undiscovered.
It is estimated that the final Bitcoin will be in circulation some time by 2140. However, it is its continued move towards increased scarcity that leads many analysts to believe the flagship cryptocurrency has potential to be enormously valuable.
Digital asset broker Marcus Sotiriou – analyst at GlobalBlock – even describes the correlation to Bitcoin’s scarcity and potential for a price explosion as a ‘supply shock’.
“The amount of Bitcoin entering the circulating supply is 6.25 Bitcoin every 10 minutes, which is equal to 900 Bitcoin per day,” he explains.
“This figure halves every four years, until 2140 where no more will be issued. With just 2.1 million Bitcoin left to be mined, Bitcoin is definitively one of the scarcest assets that has ever existed.
“Bitcoin’s finite supply is the reason that many analysts believe Bitcoin is a hedge against inflation and comparable to gold. In the future, we may see a ‘supply shock’, where less Bitcoin is available on exchanges due to a diminishing supply, hence causing price to surge.”
Despite 90 per cent of the supply now mined and in circulation, it could take many decades to be exhausted owing to the ‘halving events’ which occur every four years.
The halving process is written into the fabric of the original cryptocurrency, and is designed to make mining data blocks increasingly challenging.
Currently, miners are able to garner around 6.25 Bitcoin for each block they mine. This will be cut to little more than three Bitcoin in 2024, then approximately 1.5 in 2028.
It is this equation that means the remaining 10 per cent of unmined Bitcoin will not run out for almost 120 years.
The first block to be mined – known as ‘the genesis block’ – delivered 50 Bitcoin. At the time, it had no commercial value. Fifty Bitcoin at its current price, though, would today have a combined worth of almost $2.5 million.
Bitcoin mining operations have been hit with controversy this year, largely fuelled by the environmental concerns of Elon Musk who threw a spotlight on the amount of energy used to mine Bitcoin after he reversed his decision to allow Bitcoin to be used as a payment method for Tesla vehicles.