LMX-Why BitCoin is capped at 21 Million

in #bitcoin7 years ago

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As you all know BitCoin is capped at 21 Million. But why? Let Me eXplain.

The first 50 BitCoins are created in 2009 and these BitCoins cant be spend. Why?Only Satoshi Nakamoto knows. New BitCoins were produced by a process called mining. So when a miner finds a block in a blockchain he will be rewarded with BitCoins. Currently the block reward stands at 12.5 BitCoin.

Every 4 year the mining rewards halves. Initially the reward stand at 50 BitCoin and it halved twice to become 12.5.

Approximately every 10 minutes a block is being found. The system readjust difficulty to make sure that every 10 minutes a block is found

Now let’s calculate in a 4 year cycle how many BitCoins can be mined

Every 10 minutes a block =6 blocks/hour

24 hours/day × 365 days × 4 year= 35040 hours

Total blocks = 35040×6=210240 blocks

Now calculate rewards

50 for first cycle

25 for 2nd cycle

12.5 for 3rd cycle and so on

= 50+25+12.5+6.25+3.125+1.5625+…

=100 BitCoins

Number of BitCoins = Blocks × Rewards

= 210420× 100= 21 Million Approximately

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