The Myth of Finite Bitcoin: Understanding Its True Nature

Many people don't realize that Bitcoin can never be fully mined. The total supply is capped at 21 million coins, a number hardcoded into the program and unchangeable. However, what many are unaware of is that these 21 million bitcoins will never all be mined. The mining reward halves roughly every four years, and eventually, even with enormous effort, miners can only obtain tiny fractions of a bitcoin, or even less.

Bitcoin's creation mechanism is designed as an ongoing mathematical contest. Computers worldwide compete to solve complex mathematical problems; the first to find the solution earns newly minted bitcoins as a reward. This process is called "mining."

Initially, mining a block rewarded 50 bitcoins. But Satoshi Nakamoto set a rule: approximately every four years, this reward halves. It decreased from 50 to 25, then to 12.5, and now it has reached single digits. This process is like an hourglass, with bitcoins flowing out more and more slowly.

As rewards diminish, mining costs skyrocket. Early on, an ordinary computer could mine bitcoins, but now specialized hardware—mining rigs filled with custom chips—is required, consuming enormous amounts of electricity—comparable to the annual power consumption of a small country.

When the cost of mining far exceeds the tiny rewards, who would still mine those last bits of bitcoins? In the final stages, possibly after decades or centuries, even with great effort, miners can only obtain tiny fractions of a bitcoin, often beyond the eighth decimal place.

Therefore, the 21 million cap is more of a theoretical limit—an unreachable boundary in practice. In reality, the last portion of bitcoins is almost impossible to fully extract.

Since these bitcoins have no physical form and are maintained solely by code, where does their value come from? Essentially, it’s from "consensus"—the more people believe in it, the more valuable it becomes. This is similar to our ancestors using shells as money. Shells themselves aren’t edible or wearable, but at the time and place, they were rare and widely accepted as a medium of exchange.

Similarly, Bitcoin, though intangible, has value as long as people are willing to buy it with real money. However, this value based on consensus can be highly volatile. One day, a bitcoin might be worth tens of thousands of dollars; the next, it could plummet significantly. Those with weak hearts might find it too stressful to handle.

Interestingly, despite its capped total supply, Bitcoin can be divided infinitely. One bitcoin can be split into 100 million units called "satoshis." This means that even if the price of a bitcoin rises high, you can still buy tiny fractions—like a hundred-millionth of a bitcoin—without issue. This divisibility seems to free Bitcoin from the limitations of its total supply, making it appear almost inexhaustible in circulation.

This has allowed early holders of large amounts of Bitcoin to see their wealth grow as the price skyrocketed, while later adopters must pay higher prices to acquire smaller shares.

Of course, Bitcoin also faces significant risks. It relies heavily on internet connectivity; if the global network were to go down, all transactions would halt. Moreover, so far, only a few countries have officially recognized Bitcoin as a legitimate currency.