Bitcoin Surpasses 17 Million Coins

17 million bitcoins have been mined, with a block height exceeding 520000, as per analytic dashboards that monitor the growth and supply of bitcoin, April 26th, 2018.

17 million coins is a significant landmark for Bitcoin, as it nears its hard cap of 21 million coins, which is due to be reached sometime in 2140. The cap was built into the Bitcoin protocol by Satoshi Nakamoto, who first mentioned it in the famous 2008 whitepaper as means of introducing scarcity to Bitcoin. With a 21 million cap in place, the more coins that are mined, the more scarcity there will be in the market, which then furthers demand. Once the cap is reached, it will become even harder to obtain them, thus potentially making each Bitcoin more valuable. The scarcity of Bitcoin is why it’s sometimes referred to as “digital gold,” or as a store of value.

Scarcity plays an important role in stabilizing Bitcoin’s price, with the latter expected to shoot up in value as both demand and scarcity increases, although this is not the only way that Bitcoin could remain relevant and valuable in future. Back in December 2017, Nicholas Gregory, CEO of CommerceBlock, a provider of smart contract platforms, said that “its transaction fees could keep Bitcoin in business even after the the last coin is mined”.

And we’ve already seen how profitable transaction fees can be when bitcoin goes on a monster rally, as we observed in the same month of December last year. Miners earned $22.7 million in transaction fees on December 21st 2017, right after bitcoin flirted with $20,000 per coin.

Bitcoin’s high transactions fees and scarcity has heralded it as a store of value, which is in contrast to the function of other cryptocurrencies. Some coins like Ethereum are moving towards low transaction fees and greater adoption by developers and consumers, employing algorithms like Proof of Stake to achieve this goal. But bitcoin stands alone as the original cryptocurrency and yardstick for the health of the crypto economy.

Yet there’s something else to consider when it comes to bitcoin’s total supply: 4 million bitcoins, worth USD 35 billion (as of now), are missing, equating to 17% to 23% of its total supply, according to the digital forensics firm Chainalysis. So, there will be appreciably fewer bitcoins than 21 million in future.

51% Attack Fears

Bitcoin’s skeptics have proposed that it could be possible to increase bitcoin’s 21 million cap supply via a 51 percent or Sybil attack, but so far neither of those currency manipulations have proven possible in the case of Bitcoin – although other currencies have not been so lucky. The altcoin Krypton, based on Ethereum, experienced 51% attack back in August of 2017, but no other attacks of a similar nature have taken place since then.

The value of Bitcoin seems to have recovered through a recent bull run over the last few weeks in April after it fell sharply near the middle of March amidst growing regulations and a clampdown on the growing crypto ecosystem.

This article was first published on  Apr 26, 2018