Bitcoin and Blockchain technology is helping to mitigate these issues by providing a globally decentralized ledger that improves overall transparency and accountability. Visit the btcrevolution.io to know the best trading strategies to become a better bitcoin trader. Finally, let’s explore the importance of finite supply Bitcoin as a unique cryptocurrency with its supply chain that has enabled a global revolution through revolutionary digital currency-based transactions. This digital currency can be used for almost anything— from buying a cup of coffee to investing in financial services like mutual funds.
Finite Supply Makes Bitcoin Scarcer:
Bitcoin is a finite commodity created with mathematical formulas through a process called “mining,” with the same number of coins that will ever exist theoretically being 21 million. The supply growth rate is capped and will not be surpassed—this ensures an increase in value. However, it’s important to note that these values are greatly affected by the demand growth rate, which can be volatile. Blockchain technology allows Bitcoin to operate as a unit of account, an alternative form of money, and a store of value or asset-backed currency.
Bitcoin is open-source software not owned by any company but distributed worldwide through peer-to-peer networks for anyone to use on their computer or smartphone. Scarcity is one of the fundamental reasons why bitcoin had an inherent finite supply of 21 million BTCs. Higher scarcity means higher demand goes up with every investment asset.
Scarcity is correspondingly the reason why gold is a popular investment asset. In short, to make bitcoin scarcer, Satoshi Nakamoto only locked a finite supply in the bitcoin ecosystem. Subsequently, miners mine every satoshi of 21 millionth bitcoin, so there will be no new units in circulation, and people owning bitcoin will accquire capital gains in millions of dollars.
 The finite supply of bitcoin resolves inflation:
The currency is immutable, with no possibility of inflation. The fixed supply of 21 million bitcoin means that there will never be more bitcoin than what has already been produced. The lack of any ability to print additional bitcoin would make it far scarcer than fiat currency, backed by the government through the central bank.
You might know that inflation occurs when there is an excessive supply of bank notes resulting in an increment in the price of goods and services, further resulting in the devaluation of fiat currency. Inflation is a fundamental reason for most financial abysmal; bitcoin tends to counter the financial abysmal with its finite supply.
The finite nature of bitcoins:
It’s far more challenging to acquire new bitcoins than traditional currency because it’s tough to mine them, and they are becoming increasingly harder to acquire due to the limited supply. However, the scarcity of the digital asset makes it valuable and attractive as an alternative store of value and a kind of digital gold (except gold can be used in industry).
How does finite supply appreciate the value of bitcoin?
Bitcoin’s finite supply makes it even more stable than gold since it is mathematically bound to its predetermined inflation rate. It is more stable than fiat currency which central banks can manipulate without being tied to the actual value of goods and services. Bitcoin’s finite supply makes it against inflationary pressure like fiat currency. It has made bitcoin very popular, and its value appreciation along with Bitcoin.
The 21 million bitcoin limit is a significant factor that makes the digital currency appreciable. The present value of the currency has shot up since December 2013 due to its increasing demand and limited supply. A growing demand always increases the value of assets, and the price goes ahead to grow exponentially. Since only 21 million bitcoins will be produced by 2140, there will be no more bitcoins created in the whole history of bitcoin. This remarkable effect will result in a considerable gain for everyone who holds a bitcoin at every stage.
What is the future of bitcoin with its limited supply?
Many believe that the finite supply of 21 million bitcoin is a great advantage that encourages more people to buy the currency and hold it as an investment asset rather than spend it. Finite supply is a significant factor that keeps bitcoin a credible alternative to fiat currency.
Some institutions have already started to provide products and services based on bitcoins. The most popular of such are exchanges used to exchange real currencies like dollars, euros, and yen for bitcoin. Besides banks and financial institutions, many companies like Microsoft, Dell etc., have started working to provide bitcoins service in exchange for other legal currencies such as dollars and euros.