How Many Bitcoins Are There Now?

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Bitcoin has a maximum supply of 21 million, of which over 19 million are currently circulating. However, that doesn’t tell the whole story. As time goes on, it becomes increasingly difficult to acquire bitcoin due to the asset’s economics.

Here is a full breakdown of how bitcoin works and exactly why it has a limited supply.

Bitcoin Tokenomics: Proof of Work, Mining and Halving Cycles

Tokenomics refers to the economics of a token. Similar to how fiat currencies are issued by governments and regulated through monetary policy, tokenomics refers to the rules and functions revolving around cryptocurrency. 

Here are all of the ins and outs of bitcoin’s tokenomics, why its supply is fixed and how it works.

How Is Bitcoin Generated?

Bitcoin uses a proof-of-work consensus mechanism. Essentially, this equates to expending a lot of energy in the form of computer hardware to solve complex mathematical problems. This process is known as “mining” in the crypto world.

This function not only secures the network but also validates transactions and achieves bitcoin’s goal of wiping “double spending” from existence. Double spending is the concept of counterfeiting money and the inability to tell real currency apart from fake currency.

The miners contribute to the network behind the scenes by validating transactions to fulfill this gap. In exchange, the first miner to verify all transactions on a block in the blockchain will receive a reward — approximately 6.25 bitcoins as of May 2023. However, this will change over time as a result of bitcoin’s halving.

How Bitcoin Halving Cycles Work

The bitcoin halving cycle is when the reward miners receive for completing a block is reduced by half. It occurs about once every four years.

The purpose behind halving is to limit supply and support the deflationary nature of bitcoin. As it becomes harder to mine bitcoin, the supply decreases, which corresponds with an increase in demand.

This is why bitcoin volatility usually picks up every four years or so. Currently, each block reward for miners is 6.25 bitcoins, but this will drop to 3.125 bitcoins after the next halving event, which is expected to occur in April 2024.

What’s a Satoshi in Bitcoin?

A satoshi is the smallest denomination of bitcoin. Each bitcoin can be split into divisible units, similar to the way $1 and a one-cent coin work. A single bitcoin is made up of 100 million “satoshis,” or “sats,” as they’re sometimes called. The sat-to-bitcoin conversion is expressed as a decimal: 0.00000008.

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Right now, one satoshi is worth roughly $0.002. If one satoshi was ever worth $0.01, the price of a bitcoin would be $1 million.

Why Does Bitcoin Have Limited Supply?

So, why are there only 21 million bitcoins? Bitcoin has a limited, or capped, supply to fulfill its purpose as a monetary system.

Limited supply creates scarcity, which drives demand. Scarcity also protects bitcoin’s deflationary characteristics by preventing the release of too many coins into the economy. Just as with fiat currency, overabundance would reduce bitcoin’s purchasing power.

Bitcoin’s 21 million coin limit also makes the system more secure by incentivizing miners to verify transactions.

How Long Would It Take To Mine One Bitcoin?

On average, it takes 10 minutes to mine a bitcoin. That average is built into the system — the network automatically adjusts the difficulty of validating transactions to the number of miners.

How Many Bitcoins Have Been Mined So Far?

Current data from CoinMarketCap shows that 19.38 million bitcoins have been mined to date. However, of that amount, it’s likely that millions of bitcoins have been lost forever.

Many people have lost their private keys or seed phrases that gave them access to their crypto wallets that stored bitcoin. They are now irretrievable.

Others, such as Satoshi Nakomoto, the pseudonym for the creator of bitcoin, are believed to hold as much as 1 million bitcoin. This anonymous person has not published any communication since 2010 and many presume the famed character has passed away.

What Happens When All 21 Million Bitcoins Have Been Mined?

Even after all bitcoin has been mined, transactions will continue to be processed on the blockchain and miners will continue to verify them. However, miners likely will receive processing fees instead of newly minted bitcoin as a reward, according to the Blockchain Council.

Bitcoin’s Value as a Currency

Bitcoin was designed to serve as a fully digital payment system. While it differs from traditional, or fiat, currency in important ways — most notably, by the absence of a central governing authority — it also shares a number of characteristics with traditional currencies:

• Acceptability: Bitcoin and fiat currency both are used as a medium of exchange.
• Durability: Both types of currency can withstand pressure, stress or damage over time.
• Divisibility: Just as the dollar can be split into quarters, dimes and pennies, bitcoin can be divided to eight decimal places and could be programmed for even smaller units, according to the Bitcoin Project.
• Fungibility: Bitcoin, like fiat currency, can be exchanged for goods of equal value.
• Portability: Bitcoin and fiat currency both are easy to move and store.

Do All Cryptocurrencies Have Capped Supplies?

No, not all cryptocurrencies have a max issuance. Some cryptos choose to limit the number of new tokens that come into circulation each year instead.

For example, ethereum has no limit on its token supply. However, the Ethereum network put a cap of 25% — or 19 million ETH per year — on the ethereum that can be produced on its blockchain.

Final Take

Bitcoin has maintained its leadership position for a reason. The governance policy and procedures around its economics are what make bitcoin unique when compared to most other cryptocurrencies.

Its distinct procedures that follow traditional monetary systems while still remaining innovative separate bitcoin from other cryptocurrencies. All the same, anyone getting involved with cryptocurrency should aim to buy it as part of a balanced portfolio of investments for diversification.

Daria Uhlig contributed to the reporting for this article.

Information is accurate as of May 16, 2023.

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