LMX-Why BitCoin is capped at 21 Million
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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